BY TEWODROS KASSA
Responding to questions from members of the House of People’s Representatives (HPRs), Prime Minister Abiy Ahmed (PhD) said that the country’s economy has shown promising growth during the past Ethiopian budget year despite the COVID-19 and global inflation challenges.
As to the Premier, the country’s export trade volume has increased by 18 percent during the mentioned Ethiopian budget year. Though the country registered such appreciable outcome, the journey was not a bed of roses for the fact that its economy was tested by various difficulties such as the outbreak of the COVID-19 pandemic, conflict in different parts of the country, invasion of desert locusts and floods among others.
Conflicts in various parts of the country have displaced many people in the past and many projects have been affected for various reasons. However, despite these and other challenges, Ethiopia is on the right track to development. Following the income from summer farming and export of fruits, coffee and minerals, the economic growth has increased by 9 percent since the past Ethiopian budget year.
The economy has registered 6.1 percent growth by the past Ethiopian budget year despite the above challenges. In the preceding Ethiopian budget year, the difference between export and import was 14.6 percent which reduced to 9.3 percent by the nearly closed budget year. Efforts have been made to eliminate commercial loans. Currently, the country’s debt burden has dropped from 37 percent to 26 percent.
“Generally, the export sector has increased by 18 percent in the reported budget year, earning 3.5 billion USD while foreign investment has increased by 20 percent. The main reasons for the prevailed inflation are the gap between supply and demand as well as the unnecessary interference of illegal brokers in the market chain”, he stressed.
The Prime Minister stated that half a billion Birr had been injected into cooperative unions’ business to reduce the cost of living among the lower and middle income earners. The government has been allocated large sums of money to supply food items.
Strengthening consumer supply, improving the supply chain, and encouraging the private sector to import goods through Franco Valuta (a foreign exchange source that allows them to import goods without a bank license from a legitimate source) are also the priorities of the government during the budget year. The government itself is trying to import products such as wheat and oil to stabilize the market. This measure has immensely contributed to alleviate inflation and solve some of the problems the economy is facing.
Currently, the per capita income of citizens has reached about 1,000 USD. The budget allocation for the states has also increased by 15 percent. The budget allocated for sustainable development of the states has in creased from 6 billion to 12 billion.
Accordingly, the government has given prior attention to follow new approach to control inflation and cost of living during the coming Ethiopian budget year. The inflation has continued being major challenge in the country’s economy.
The Prime Minister underscored that bakeries will be built in major regional cities in addition to Addis Ababa and efforts will be made to control the cost of living by increasing wheat productivity. Implementing modern crop cultivation system, utilizing latest harvesting technology, and agricultural inputs provision contributed a lot towards increasing the production of summer wheat. The on-going green legacy campaign and the tree planting efforts should be enhanced to augment agricultural productivity.
More importantly, the government will focus on macroeconomic reforms in the coming Ethiopian budget year to address inflation and the cost of living. Besides, the government is working to address the shortage of cement in a sustainable manner within a year. The shortage of cement has put a strain on the construction industry.
Following this, the government has devised a plan to address the shortage of cement supply. The huge amount of cement consumption by mega projects such as the Grand Ethiopian Renaissance Dam (GERD) is one of the main reasons for the shortage. Currently; the government is encouraging large companies to work for a lasting solution through producing sufficient cement. Preparations are underway to address the shortage of cement within a year.
Regarding the financial Sector, according to the prime minister, bank accounts have grown from 38.8 million to 66.2 million resulting in massive fundraising. Savings have increased by 30 percent of which 74 percent was accessed by the private sector. Bank branches increased from 5,100 to 7,100 with 6 million mobile banking users. Planning to generate 260 billion Birr revenues during the budget year, the government has achieved 98 percent generating more than 142 billion Birr. Increasing foreign market capacity and revenue collection needs to be continued. Well-monitored projects such as industrial parks, industry, and agro-industry have achieved better performance. It is important to realize that the mega project’s completion and the potential to be completed in lesser time.
Ethiopia had allocated 6 billion Birr for sustainable developments in the previous year. Making double its budget allocation during the nearly closed budget year, the government has allocated 12 billion Birr for sustainable developments.
The Prime Minister further said that strengthening COVID-19 responses, resettling thousands of Internally Displaced Persons (IDPs), finishing mega projects, and rehabilitating migrant returnees have been the major priorities of the government.
The government has given due attention to the agricultural sector and extending summer and winter farming activities are undertaken throughout the country. Preparations are underway to provide efficient loan and offer land tenure certificates through movable assets system to the farmers nationwide. Nurturing urban farming is important to facilitate huge agricultural investment, latest technology, and utilize the land resource properly. Efforts are being undertaken to reduce rain-fed agriculture and promote irrigation and tech-based agriculture system in the country.
Another important issue is the water bank. The government has given priority to save water equally as fuel and money. To this end, much effort is being exerted currently to save water whether it is found in the form of flood, rain or ground water. As all these issues improved, it is expected to significantly improve the agriculture sector.
Regarding the tourism sector, the government has identified the sector as the great potential to achieve the country’s prosperity. The country has great potentials in terms of tourism and there are more assignments to be done in the sector. Maintaining the country’s permanent heritages, expanding new tourist destinations, and effective marketing and promotion to attract the international tourists are the major activities to realize the sector’s global competitiveness.
Ethiopia is home to miraculous and ancient heritages registered under the United Nations Science Education and Cultural Organization (UNESCO) prestigious world heritages. For example, the heritage of Lalibela, Axum, and the Gondar palace alone are enough to attract a large number of tourists.
What is more, the government prioritized green legacy during the budget year. In addition to mitigating climate change, one of the reasons of planting seedlings is to enable migrated wild animals return home. Following the expansion of forest through planting trees, the wild animals are expected return immediately. For instance a lot of ducks have been returned to the Friendship Square in Addis Ababa following the construction of water pool and greenery efforts.
Finally, Prime Minister Abiy assured that the Grand Ethiopian Renaissance Dam (GERD) is being built in a way to benefit all the riparian countries apart from solving Ethiopia’s electricity crisis.
“Despite barrage of fake news about GERD, the dam is going to reduce Sudan and Egypt’s water security threats as our green campaign will make both countries to secure more water than before.”
According to the premier, the dam is crucial to the tripartite countries and the region as a whole not only in terms of generating power but also solving water shortages via planting billions of seedlings every year.
He, therefore, called on the international community to support Ethiopia’s win-win approach to break the deadlock on the GERD talks.
Accordingly, Ethiopia has been negotiating with Sudan and Egypt in good faith to resolve the issue once for all so that the downstream countries have to demonstrate the same commitment to come up with win-win solution instead of involving in fruitless and time- consuming arguments
The Ethiopian Herald July 11/2021
