BY TSEAGYE TILAHUN
ADDIS ABABA—An economist stated that Ethiopia’s external debt payment reshuffling by donors and taking other economic measures would give a breakthrough for reducing its current economic impacts.
Addis Ababa University Economics Lecturer Birhanu Dinu (PhD) told The Ethiopian Herald that conflict, instability and inflation along with external debt will cause high economic burden. Taking necessary measures would lead to economic recovery. For instance, extending external debt, maximizing production, sustaining peace and stability, applying economic reform, controlling inflation, taking monetary and budget policy measures have a paramount importance in addressing the existing economic challenges.
Applying fiscal policy, reassessing monetary policy and sustaining peace would help control inflation. The key solution for the recovery of the economy is sustaining peace via avoiding conflict as it causes several problems, and strengthening peaceful negotiation and law enforcement activities are key remedies, he said.
As to the expert, debt payment reshuffling measures would give breakthrough for reducing the existing economic burdens in Ethiopia. However, empowering the economic capacity of the country is a key measure to repay the debt.
“ Donor countries support heavily indebted countries through canceling their debt, why because countries will face bankruptcy and this in turn causes problems for the global economy.” The breakthrough time will give a chance to recovery and reduce timely economic impact. This will give a chance to take economic reform, monetary and budget policy measures.
“Extending credit facility for heavily indebted countries needs a meeting of supply and demand. Controlling or reassessing unproductive monetary policy is also an additional factor. When foreign and local investors perform their tasks peacefully, inflation would be under control within a short period of time. This will enable us to repay debt, control inflation, and improve the lifestyle of citizens,” he added.
He furthest pointed out that those financial institutions particularly Ethiopian banks should focus on allocating their credit to productive sectors as its unproductive usage has multiplied effects on the economy especially, it soars inflation, and they should also follow proper utilization of their credit.
The Ethiopian Herald July 27/2022
