Ethiopia had recorded fast development for the past fifteen years, the development had created wealth as well improve nation infrastructure. At this moment nation also underway in conducting various reforms to ensure creative development that could address the growing demand of citizens.
Yes, Ethiopia is going through a wide range of multifaceted reform, in the last two years with new democratic and economic pathway. Prime Minister Dr. Abiy Ahmed and his new administration have been exerting level best effort to fix the macroeconomic imbalance that the Nation is going through with foreign exchange reserve shortage.
On his recent press conference Dr. Abiy has briefed journalists about how the national foreign exchange earnings increased this year with a significant difference from the past one. Though the incremental change on the Nation’s forex earnings has a significant value to the country’s macro economy, the most important step taken by Abiy’s administration is that using the earnings to enhance the contribution of the private sector.
According to the Premier, the private sector is given priority and the aim is to fix the macroeconomic imbalance, which is why the former trend of allocating foreign exchange earnings for governmental establishments is put aside and the money is going for the greater role of the private sector.
In this case, it is obvious that the investment sector will be the gear of the economy that the Nation is counting on for its sustainable development. Investment both foreign direct and local is the sector that the government has currently given priority and the FDI inflow is increasing from time to time.
Meanwhile, encouraging both local and foreign investors is crucial. The more local investors are encouraged and reinforced the more the private sector take a leading role in the economy and manufacturing productivity that could lead nation industry flourish to competiveness as well import substitution.
One way that Ethiopia can avoid the pressure of external debt from its economy is by boosting investment that gives equal chance for both local and foreign investors in the sector. That way, employment capacity of the private sector will increase.
The government has also established committee that oversees business activities in the country with the view to ease investment difficulties in relation with customs and infrastructural access.
The Nation has been ranked at the bottom list of Global Ease of doing Business index which, resulted on companies having difficulties to enter the private sector in Ethiopia. Meanwhile, the committee is expected to prevent such challenges and the issue has gained the Premier’s attention for he chairs the committee.
Currently, the government has announced the expansion of more industrial parks in strategic areas throughout the country such as places that are close to ports and regional trade corridors.
This is also one indicator that the government is deeply into promoting the sector. As the nation’s economy is agricultural led and there is a plan to transform it to industrial led, the investment sector could play crucial role if more agro processing companies are involved.
When uplifting and transforming the agricultural sector is enhance, the manufacturing sector will have sufficient input. With the government promising to redress the challenges, Ethiopia remains preferable foreign direct investment destination and the recent measures taken by the government are commendable for fruitful results are being observed over the recent few months.
The incumbent efforts underway of drawing investors commedable becuase it is making nation one of the investment destination. It should be noted that more effort must be exerted to address the backlogs so pertinent stakes across the board should come together to ensure productive and sustainable investment.
The Ethiopian Herald, August 14/2019
