Currently, the government and the people of Ethiopia are under unwanted war against both inside and foreign forces. The nation is fighting different fronts including the war with the terrorist group and international pressure from some countries in the west and some international organizations. The economic battle is among the other fronts the nation is fighting against.
As the Ethiopian forces are advancing in the battlefield, the people of Ethiopia including the diaspora from different parts of the world do their best to defend and protect the nation from any western intervention into internal affairs of the country.
Those forces who want to interfere in the country’s internal issues have gone too far to make and terrorize the people and the government of Ethiopia to surrender to their evil agenda. To cope up with the pressure, the government has been taking different measures coupled with the diaspora’s all rounded support via remittance and aid.
Professor Alemayehu Geda, an economist by profession and instructor at AAU in his study findings indicated that during the periods when the EPRDF was in power, from 31 to 37 billion Dollar nearly that was gained through aid and loan had been flown out of the country due to illicit trade and illegal money laundering. As to him, such devilish act occurred in peace time. Hence, it is easy to imagine how much money would be flying out of the country during the war time.
A couple of days ago, the Government Communication Service (GCS) has held a timely press conference regarding the current issues. Selamawit Kassa, FDRE Communication Service State Minster, has briefed the media about the ongoing measures and actions taken by the government in relation to the macro economy.
The state minister said that at this time the economic front is the second battle that the country is fighting at. The government has gone too far to make the economy stable and healthy. It has planned to collect 407.9 billion Birr from the macro economy sector in 2021/22 budget year. As a result, the government collected 73 billion Birr which is 17.9 percent of the planned revenue during the first quarter of the budget year. From the approved capital of 506.7 billion Birr by the central treasury, the government spent 111.3 billion Birr which is 22 percent in the last three months.
Regarding the external resource flow performance, 369.2 million Dollars has been spent on different multilateral organizations and government development projects in the first quarter of the fiscal year, Selamawit added.
In order to control the artificial inflation, the state minister mentioned that the government took a major step and lifted taxes on customs and levied on basic foodstuffs. This measure has brought a good result and it has shown improvement on the price of food items. In 2020/21 fiscal year, the price inflation rate was 20.2 percent. In the current fiscal year, however, the government is taking different actions to make the inflation lower than the previous fiscal year, the state minister noted.
When talking about the war in the northern part of the country recently, the State Minister of Finance Eyob Tekalign (PhD) did not deny that the ongoing war has its own adverse impact on the nation’s economy. However, he refuted that though the war put pressure on the economy, the pillars of the economy are not eroded rather there is better plan accomplishment. “In addition to the human toll, it is obvious that it brought negative impact on the economy but the impact should be studied in detail,” he remarked.
The GCS State Minister, Selamawit, highlighted that in this time of emergency, objectives and directions of the macro economy will be budget shifting and arranging the major projects of the government and programs which have significant economic impacts in sequence and put them in action. This will be accompanied with intensive follow up regarding their progress. The government expects that this action will bring positive results.
Furthermore, Selamawit added that it is advisable that the budget, resources, and assets of the government should be used wisely and appropriately. “We should reduce resource wastage and use them to the planned objectives. This will be monitored carefully,” she stressed.
Supporting the above idea, African Chambers of Commerce Manager, Kibour Genna has forwarded some ideas regarding the economy. He said that in order to cope up the economic pressure in such times of emergencies like the war, it is advisable that the government should halt importing luxury items including fancy vehicles. This includes expensive liquors, food stuffs, cosmetics, and cars. Besides, the government needs to stop vacation traveling because the government has to save the foreign currency.
He noted that in order to fight back the economic pressures from inside and outside, the best way will be finishing the war in a short period of time. If this is not attainable due to some reasons, then it is better to stop importing fancy items and vehicles to the country until the war is clinched.
While reflecting his view in this regard, Professor Alemayehu Geda said that the current burning issue of the nation in the economic front is the exacerbating inflation which is originated from structural problem.
According to the state minister, so as to make the economy holds the current situation of the country, the government has prepared itself in various ways. Funds expected to be gained from loans and aids are either not accessed or halted. This brings an economic burden on the central treasury finance capacity. To find out an escape route, the government has managed to have continuous meetings and discussions with friendly countries and briefed them the current situation of the country.
On the other side, Kibour Genna pinpointed that the government needs to work on substituting imported items and products with local products. The government should keep on achieving better on irrigation and increase wheat and fruit productivity. The agriculture products should meet and address the local demands.
Moreover, the State Minister Selamawit said that the debt burden of the country is very high. This affects the macro economy. To counter the burden, the government has negotiated with financier countries and organizations on debt shifting possibilities; it produces positive results.
She concluded that several actions have been taken to make the economy healthy and stable. Those actions brought good results. “Using the resources wisely and effectively, we will be the guards of the macro economy of the country,” she underlined.
BY DANIEL ALEMAYEHU
THE ETHIOPIAN HERALD DECEMBER 1/2021
