The Ethiopian government has initiated a new homegrown economic reform with a major aspiration of rectifying the economy and unlocking country’s development potentials thereby making the country an African icon of prosperity by 2030.
The initiative, among other things, outlined macroeconomic, structural and sectorial reforms that are crucial to pave the way for job creation, poverty reduction, and inclusive growth. On top of that, the participation of the private sector in the sector is said crucial.
Taking the role the private sector plays in the economy, the government has been taking series measures to shift country’s economic landscape, which includes reforms in investment laws and business climate, eventually contributing to remove regulatory obstacles that hamper investment, lessen the burden of hard currency.
According to Ministry of Finance, the country has faced critical macro-economic imbalance which is being exhibited through debt burden, critical shortage of foreign currency and rising inflation.
Million Kibret, Economist and Managing Partner of BDO Ethiopia said that in 2018/19 fiscal year Ethiopia’s economy grew by an average of nine percent which is the biggest. The private sector plays crucial role in sustaining and catalyzing growth in all sectors. Thus creating favorable business friendly environment and providing the required support is of paramount importance to achieve the desired outcome.
Nowadays hearing about shortage of foreign currency in Ethiopia is common. The government is struggling to curtail the problem. However, it is challenging to solve it through the efforts of government alone. The full commitment and intervention of the private sector is equally important. On the other hand there is huge joblessness in the country, inflation, and others. The government needs to cooperate with private sectors to push economy forward, he added.
As to Million, creating conducive business climate for the private sector and providing necessary support is essential.
Compared to country’s abundant potential in every sector, the economic growth registered so far is not enough. A lot remains ahead to exploit the huge potential of the country in every sector. However, the hindrances that challenges private sectors development, and the overall economic development of the country in general should be well considered and addressed, he opined.
Issues such as provision of land, illegal trade, low export performance which leads to shortage of hard currency and inflation should be well entertained and addressed.
Seife Ayalew, PhD candidate at School of Conflict Resolution with George Mason University, on his part said that the active involvement of the private sector in the economy is central as it plays a paramount role in speeding up the government’s move especially in economic aspect.
What is more, as government alone could not realize the expansion of infrastructure, effective service delivery, and the like services, the private sector can alleviate the burden. To this effect, the government should provide the desired support.
Equally, sustaining peace and security is the other way and an essential element to boost investment and realize sustainable development. Investors, be it domestic or foreign, aspire for a stabilized political situation to invest. With regard to this, Ethiopia has been taken as the symbol of peace and stability in the highly volatile East African region. The conflicts witnessed in some parts of the country over the past times though did not bring about serious consequences; it has created inconveniences. Since such kinds of problems hinder the economic aspect of the country, the government needs to work committedly to solve the problems at grass-roots level, he opined.
Getachew Regasaa Secretary General with Addis Ababa Chamber Of Commerce and Sectorial Association (AACCSA), said that Ethiopia is registering remarkable economic achievement. However, the recent political unrest that took place in some parts of the country had challenged the private sector. The government has to work hard along with the community to give lasting solutions not to risk the hard-won economic gains registered to this point. At the same time, challenges such as shortage of foreign currency, inflation, trade imbalance and others should get solutions, he added.
“Private sector plays irreplaceable role in achieving the Sustainable Development Goals (SDGs) and creating conducive business climate for private sector and addressing those problems is essential to flourish the economy,” he remarked.
The Ethiopian Herald February 19/2020
BY HAILE DEMEKE
