– Majority of banking resources directed to private sector
ADDIS ABABA – Ethiopia’s historic macroeconomic reforms are designed to increase private sector involvement and ensure efficiency within a stable macroeconomic framework, according to the Governor of the National Bank of Ethiopia (NBE), Mamo Miheretu.
Addressing investors’ concerns on Thursday, Governor Mamo stated that the government has implemented key measures in the macroeconomic reform sector, which are already yielding positive results. The primary goal of the reforms is to strengthen private sector participation by creating a stable macroeconomic environment. These reforms aim to promote exports, encourage investment, foster import substitution, and support the manufacturing sector.
The Governor emphasized that these efforts will enhance the competitiveness and efficiency of the private sector, leading to job creation and improved performance. Additionally, the reforms will address foreign exchange distortions, balance trade, and reduce inflation, creating a healthier economic environment for businesses.
Governor Mamo highlighted the current reforms as a “golden opportunity” for the private sector to create sustainable jobs, expand investments, and contribute significantly to the national economy. He urged the private sector to harness these opportunities and utilize the available resources to boost their businesses.
In the long term, the reforms are expected to improve the competitiveness of the private sector, particularly in the manufacturing industry, driving structural transformation. One significant reform allows investors to repatriate 100% of their income, dividends, and other export earnings, providing greater financial flexibility.
He also pointed out that five years ago, 90% of bank deposits were allocated to public development enterprises. However, this has shifted, and the majority of banking resources are now directed to private sector creditors, with credit approval processes adhering to legal banking standards. The reforms focus on addressing the needs of the manufacturing sector to boost production, productivity, and import substitution.
Governor Mamo concluded by encouraging the private sector to play its part in utilizing the opportunities presented by the ongoing macroeconomic reforms, which are crucial to driving Ethiopia’s economic transformation.
BY TSEGAYE TILAHUN
THE ETHIOPIAN HERALD SATURDAY 7 SEPTEMBER 2024
