ADDIS ABABA — In a significant shift towards a market-driven economy, Ethiopia has embarked on comprehensive macroeconomic reforms aimed at addressing longstanding structural challenges and fostering sustainable growth. Initiated in early 2019, these reforms target stabilization through strict fiscal policies, debt management, and trade balance improvement, positioning the country for a robust, private sector-led economic future.
According to Ethiopian News Agency, the reform agenda includes crucial measures such as transitioning from high-interest commercial loans to concessional loans with better terms, enhancing public enterprise borrowing scrutiny, and leveraging sectorial growth in agriculture, industry, and ICT to boost production and national income. Efforts in import substitution, notably in wheat, have saved the country approximately 2 billion USD in imports over the past ten months, reflecting a proactive approach to self-sufficiency.
Further elements of the reform focus on tax administration enhancement, with tax revenues reaching new highs, and inflation control strategies that have helped reduce the rate from over 30% to 19.9%. The government’s job creation initiatives have also seen significant gains, with 3.8 million new jobs reported in the past fiscal year across various sectors.
Building on the initial successes, the comprehensive macroeconomic reform policy launched recently aims to establish a modern and sustainable economic environment. This includes transitioning to a market-based exchange rate, modernizing monetary policies, and fostering innovation and competitiveness. The expected outcomes are ambitious, with projections of sustained high economic growth, reduced inflation, and significant improvements in foreign direct investment and foreign exchange reserves.
The government’s strategic alignment with its long-term development plans suggests a transformative period ahead for Ethiopia’s economy, with broad implications for its integration into the global market and the improvement of living standards for its citizens.