ADDIS ABABA- The International Monetary Fund (IMF) forecasted Ethiopian economy in 2024 to grow at 6.2 percent. The forecast is a pretty strong indicator as the economy has been resilient for the past three years, according to an Economist.
In an interview with CNBC Africa,the Global Fairfax Africa Fund Chairman Zemedeneh Nigatu said that the Ethiopian economy will grow with better rate as government resolved several domestic challenges seen in the past years.
“IMF has forecasted Africa’s economy including the Ethiopian. It shows that Ethiopia is the second fastest growing country in Africa next to Côte d’Ivoire. So, this is a pretty strong indicator as the economy has been resilient over the last three years,” he said.
Like any other country in the world, Ethiopia was hit hard by COVID-19 and then subsequently has internal challenges. The Russia-Ukraine war has also its own effect too. But, the Ethiopian economy is still the world’s resilient and fast growing while surviving all these challenges. To grow by 6.2 percent in 2024 is a good indicator that shows agricultural and industrial sectors will drive the growth, he noted.
He, however, indicated that the inflation tastes the economy in the past 15-17 years. “Actually it was about 15 percent for the last 15 years so that certainly been the target of the central bank to bring it down to a manageable level.”
Speaking about the debt sustainability, he also described that Ethiopia is still capable of having further debt agreements.
The percentage Ethiopia’s debt[compared to its GDP] is actually lower than many other African countries . But, Ethiopia’s ability to generate sufficient hard currency is not there yet; that is what is creating the debt sustainability issue, according to Zemedeneh.
It needs to look at [the ongoing reform] holistically when the reforms come in; the hard currency comes in, and then economy will continue to generate sufficient foreign exchange, he said.
“I think the pressure on the Birr will reduce and hopefully will reach its own problem. And, this is one thing that the economic reform is to liberalize,” he added.
BY YESUF ENDRIS
THE ETHIOPIAN HERALD FRIDAY 12 JANUARY 2024
