ADDIS ABABA– The government should consider a short-lived ban on ‘non-essential’ imports as a mechanism to save the much needed foreign exchange, says an Economist in an exclusive interview with The Ethiopian Herald.
Fairfax Africa Fund Global Chairman Zemedeneh Nigatu said that the government needs to temporarily shut import of non-essential items until forex supply stabilizes.
He added that this in turn will encourage domestic production and cut lavish spending.
For instance, imports ranging from [super-luxury vehicles] which sell locally for 400,000 USD (Birr 12 million) to edibles like packaged fruit juice, should be banned, he stressed.
The government can put in place multiple policies to encourage domestic production. And one of the measures it could consider is to cut unnecessary expenditure. “Why do you allow importation of juice, when it could be produced locally and even exported?”
Some countries took these measures and they were able to raise their foreign currency reserve and encourage domestic production.
In such a way, the country could save more foreign currency and see domestic production going up, according to him.
The government is implementing home-grown economic program and this is very important step to restructure the economy and ease burdens, he said, adding that a possible ban on the importation of ‘luxuries and less relevant goods’ is important.
But he said the government needs to make sure that the capacity of local factories is built first.
The Ethiopian Herald January 10/2020
BY DESTA GEBREHIWOT
