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Toronto – Amid mounting economic concerns and sharply rising prices for essential goods, the Ethiopian government has outlined its primary fiscal goal for the year. The focus, according to government officials, is on “increasing revenue” through taxation. This announcement comes as economists and financial analysts raise alarms about the impact of recent macroeconomic reforms, including a significant currency devaluation.
Ahmed Shide, Minister for Finance, emphasized this priority during a recent meeting with taxpayers. “The main focus of the government is to grow revenue from taxation,” Shide stated, as reported on the Ministry’s social media page. He also disclosed that the government has established a new task force tasked to oversee tax collection and ensure it aligns with the tax laws. This task force is part of a broader strategic initiative aimed at bolstering local revenue amidst growing economic pressures.
Aynalem Negussie, the Minister for Revenue,stated that five strategic approaches have been designed to enhance income from taxation. They seem to be intended to streamline the tax process, reduce evasion, and grow local revenue.
However, reports from local sources indicate a troubling trend: a marked decline in the consumption of goods. This decline is largely attributed to the devaluation of the Ethiopian currency, which has considerably diminished the purchasing power of the majority of Ethiopians including those who work in the public service.
The way the government is dealing with the price rise has caused another concern. Over 2,000 businesses are reportedly shut down in the capital Addis Ababa alone in the past two weeks for allegedly raising prices in the wake of the currency devaluation. The effectiveness of the government’s revenue growth strategy and its ability to stabilize the economy amid these ongoing challenges remains a critical concern.
The introduction of a “market-based exchange rate” just two weeks ago, which – according to sources – the IMF and World Bank attached as conditions for over $10 billion in loans and grants, has resulted in a dramatic surge in the exchange rate. It has escalated from approximately 58 birr per US dollar to over 107 birr per US dollar in a span of less than two weeks.
The currency devaluation and rising prices in the country has sparked speculation about possible widespread protests. In response, the Ethiopian government has intensified its crackdown in Addis Ababa.
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When I see the face of this fire spitting patriot leading the financial matter, I am assured that the old country is in the hands of a very capable and qualified person. I wish him continued success. Go get’em tiger!!!
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