Easing trade barriers particularly financial constraints as well as scaling up public investment would help revive the economy which has been increasingly under the shadow of political and security priorities , advise experts as the country poised to host African Trade and Finance conference.
Ushering in a new era of political reform with many challenges awaiting remedies, the country has to revive its economy through reforming trade practices, according to the experts. Devising roadmap to revitalize the trade and export sectors is appropriate strategy for maintaining macro-financial stability and stimulating the economy.
The economy has been growing over the years but it remains constrained by foreign exchange scarcity, poor quality product and other hurdles, says former President of Ethiopian Chamber of Commerce and Sectoral Association, Kibur Gena. Investing in the manufacturing sector could help revive trade and export which would ultimately activate the economy. Diversification and competitiveness of the export commodities in terms of quality is very much aligned with the manufacturing sector.
But with the manufacturing sector somehow lagging behind the much needed growth and finance being key constraints, interventions are needed to stimulate the economy. Since the private sector is not strong, it would be up vita to boost public investment in this regard. Tariff related problems have also been casting shadow on the country’s export perfor mance. Hence, speeding up accession to the World Trade Organization and realizing Intra Africa Trade and Free Trade Zone are viable solutions.
Ethiopia, in terms of economy, geopolitical importance and others, is the largest economy in the east Africa worth the accession, as to him. It would be beneficial for Ethiopia to join the trade international organ sooner than later as the country aims to become export-led value-added economy, Kibur makes clear. “It has to be part of the world trading economy form the value added economy.
“The membership process should further be fast tracking to expand its exports and ensure trade competitiveness.” In addition to boosting primary agricultural products , more attention should be given to fully and better processed and value added manufactured items, which can increase level of foreign currency reserves and facilitate import substitution.
Equal attention should also be accorded to quality aspects through better production methods, innovative packaging and strong supply chain management, Kibur indicates Kassahun Mola Addis Ababa chamber of commerce and Sectoral Association Communication and promotion Head for his part states that Ethiopia has no trade policy which coupled with other challenges is partly impacting the economy.
The African Trade and Finance conference in this regard would be a platform to discuss on steps to modernize the Ethiopia’s trade and export sector and financial source which play paramount role in the sectors. Trade volume between African countries is less than 10 percent and essential remedies to redress the hurdle . finance is the main constraint in the sector. Thus, the conference would help deliver remedies to Ethopia’s trade and export sectors.
The conference would bring together major players of the sectors including regional blocs , financial institutions and think tanks and others . Economic integration and fostering Africa free trade zone would also be high in the agenda. Logistic and finance are also major challenges in the trade sector.
Despite slight improvements, the economic growth is still accompanied by many macroeconomic challenges. Inflation affecting mainly fixed income peoples, foreign exchange shortages and high external debts and trade deficit are the key areas demanding immediate intervention , says Dr. Eyob Tesfaye a Macroeconomist, in an interview with The government has to take measures to explore reliable forex sources and build financial institutions. Promoting import substitutions require serious task.
The country is still sending large chunks of dollars to import goods . The focus should then be directed at reducing import and increasing domestic production. With regard to WTO entry, Eyob states that joining WTO is not only about expanding and adding new markets, it is also about securing and maintaining existing position in the global trade. There may come a time where the country will have to lose more for not becoming WTO membership. The gains outweigh the risks, thus the country needs to see ways and means to face the latter, he comments
Herald January 18/2019
BY DESTA GEBREHIWOT
