Wednesday, February 8, 2023
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May Abiy find the Wisdom of Zuma

The writer argues Ato Mamo Mihretu’s appointment as governor of the National Bank of Ethiopia “is nothing short of irresponsible.”

Ethiopia _ Abiy Ahmed _ Mamo Mihretu
Prime Minister during a meeting with Foreign Affairs Ministers of France and Germany sometime last week. (Photo: public domain)

By Oliq Omam

In December 2015, the then South African President Jacob Zuma appointed David van Rooyen as finance minister. Mr. Rooyen was a party loyalist with no experience in finance. The appointment led to a sudden drop in South Africa’s rand and eroded investor and credit rating agencies confidence in the soundness of South Africa’s financial management.

Soon, Critics strongly condemned the decision to appoint an inexperienced finance minister at a time of great economic challenges. Leading academics, lawmakers, and labor union leaders wrote open letters to the president, challenging his judgment and stewardship over the economy. 

At first, the president made light of the situation and even dismissed the criticism as coming from “people who talk a lot on TV”. But, four days later, succumbing to public pressure, President Zuma reversed his decision and replaced David van Rooyen with Pravin Gordhan, a seasoned expert who formerly served as finance minister, to the post. The decision restored confidence and calm in the market.

After seven years, I kept playing this story in my head again and again because of a similar situation in Ethiopia. Today Prime Minister Abiy Ahmed appointed Mamo Mihretu, A lawyer, as the governor of the National Bank of Ethiopia (NBE). I know, this Administration has not been new to inexplainable appointments that defy and logical explanations.  However, this particular appointment matters the most as it comes at a time of great economic crisis in the country. 

I could not think of a more difficult time in the history of Ethiopia when it comes to the state of the economy and its impending dooms.  Appointing Ato Mamo Mihretu as a governor of the NBE is nothing short of irresponsible. Please don’t get me wrong, Mamo may have his qualities. But, he is not in any shape or form trained or experienced enough to steer the country through the current economic crisis with skyrocketing inflation, an overvalued currency, and foreign exchange shortages. These challenges require a very well-thought-out monetary policy and management to successfully rebound from the multiple shocks we have faced in the past year. 

Looking past his training and experience, no matter how you slice it, Mamo’s track record over the past four years does not particularly inspire confidence.  Let’s see what he has done in the past. He was the Country’s Chief Trade Negotiator but failed to even make the slightest progress to help the country join WTO. As a head of Ethiopian investment holding, I am yet to see any results beyond flashy logos and fancy office decor. To make matters worse, Ato Mamo is a lawyer in training, not an economist. Thus, what made the PM believe he can complete this tall order? I am yet to see a single logical explanation. 

As Ethiopia prepares to launch a second homegrown economic reform agenda to address the above-mentioned key macroeconomic challenges, it is critical to have a seasoned professional who can go toe to toe with IMF and the World Bank in that position. 

So, what can be done to reverse this appointment? Well, far be it from us to question the decision by our omniscient leader, but we can voice our concerns loudly and hope PM Abiy will find Jacob Zuma’s wisdom and amend this atrocious decision.

Editor’s note : Views expressed in the article reflects the views of the author and do not necessarily reflect the views of borkena.com

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