Macroeconomic Reform Helped Ethiopia Increase Inflow of Foreign Currency, Says Economic Policy Advisor to PM

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Addis Addis July 17/2019 The macroeconomic reform carried out by Ethiopia has helped to increase the flow of foreign currency into the country, Economic Policy Advisor to the Prime Minister said.

Economic Policy Advisor to the Prime Minister, Mamo Mihretu told ENA that measures taken by the government under the leadership of Prime Minister Abiy Ahmed have significantly increased the flow of foreign currency into the country.

Foreign currency inflow in the past nine months alone was close to 19 billion US dollars, according to the advisor.

The funds from various financial organizations, including the World Bank, will help Ethiopia adjust its macroeconomic imbalance, Mamo pointed out.

“We have done significant work in terms of mobilizing external finance and resources from our development partners and from other countries,” the advisor stated, adding that “the World Bank, for instance, financed the government to win 1.7 billion USD through budgetary support.”

According to him, the foreign currency inflow has shown a dramatic increase when compared to that of the pervious year.

Mamo noted that the Ethiopian government has been taking many measures to adjust the macroeconomic imbalance. “The measures have enabled us to effectively engage a sustainable economic growth.”

Acknowledging that the Ethiopian economy has been growing in double digit for the past 15 years, he explained that the growth was due to public investment on infrastructural projects incidentally stifled by shortage of foreign currency and accumulated debt.

The significant external financing led to debt distress and external debt vulnerability. “If you look at the current rating of Ethiopia’s debt status, which is rated as high, implies that the country will be not able to access external commercial loans,” Mamo elaborate.

The advisor noted that the government is, therfore, focusing on completing existing public projects rather than starting new ones, a strategy which will enable the government to save more foreign currency.

Ethiopia is also embarking on an investment reform program initiated by the premier in order to expand the participation of the private sector. It is expected to generate significant amount of hard currency for the country, Mamo revealed.

He added that “the  purpose of the initiative is to address policy and regulatory administrative barriers that inhibit the growth in the performance of the private sector; and all those measures are bringing positive results.”