ADDIS ABABA –The political and diplomacy efforts would merely enable Ethiopia to access debt and aid, thus, attention should be given to address internal political-economy issues causing the inflation, an expert in the issue said.
Approached by The Ethiopian Herald, a political-economy analyst Shewaferaw Shitahun stated that ensuring a free movement of goods and services as well as enduring peace and stability would hugely contribute to tackling the rampant inflation. “Internal problems require internal solutions and the elites should play their role in bringing non-economic solutions.”
Since there is no sufficient production in the country, there is no guarantee the current inflation would transform into hyperinflation. The inflation is linked to population size (demand and supply chain). Supply and demand should be optimized to have a balanced market, Shewaferaw elaborated.
Ensuring peace and stability and expanding the private sector’s economic role with policy support and encouraging and expanding saving and investment are the necessary steps taken to satisfy the growing demand. Increasing product and productivity, establishing more shared companies and applying the main macroeconomic solutions would have a paramount importance.
Policy and proclamation as well as timely business information are of great significance to make business decisions; he said, mentioning the widespread business information gap in the country. “In this regard, the National Bank of Ethiopia’s (NBE) recent decision is a commendable step to facilitate the economic situation”.
Putting a place and favorable environment is a prerequisite to employ monetary and fiscal policy amendments to curb inflation. Checking the soaring increase in the price of goods and services further needs increasing production and productivity and sustaining peace and stability, the expert emphasized.
It is to be recalled that the NBE has taken bold steps to control inflation that has immensely challenged the livelihoods of citizens especially those in the low-income bracket.
BY TSEGAYE TILAHUN
The Ethiopian Herald September 27/2023
