Ethiopia’s macro-economic reform “designed” for “private-sector-led investment” 

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Toronto – Ethiopia’s macro-economic reform – which was introduced in late July this year with further devaluation of Ethiopian Birr and introduction of market based currency exchange regime –  was designed “to address macroeconomic challenges and rebalance the sources of growth by shifting away from public towards private sector-led investment.”

Ahmed Shide, Ethiopia’s Minister for Finance, revealed this during the G7-Africa Ministerial Roundtable in Washington, USA, on Saturday. The meeting took place on the sideline of the Annual Meetings of the World Bank Group and International Monetary Fund. 

News update from the Ministry cited Ahmed Shide as saying that “The reform is embarked on to improve domestic resource mobilizations, rationalize public expenditure, and enforce fiscal discipline to ensure fiscal sustainability, floating exchange rate regime to correct distortions in the external balance of the economy, institutional and sectoral reforms to improve productivity, generate decent jobs and accelerate economic growth.”

Prime Minister Abiy Ahmed’s government has been painting the privatization schemes and neoliberal economic policies as a “home grown economic growth plan.” The IMF and World Bank have been promoting painting  Abiy Ahmed’s macroeconomic policy in the same way while imposing further devaluation of Ethiopian currency and more privatization schemes. 

Recent reports from credible local Ethiopian news sources indicate that economic hardship for the majority of Ethiopians worsened after the currency was further devalued in July 2024. This week, the U.S. dollar was selling for 119 at the banks while the rate in the parallel market is reported to be more than 140 Ethiopian birr. It was 57 when the government introduced the change at the end of July this year. 

The G7 meeting  was attended by Finance Ministers from member countries and representatives from Benin, Egypt, Ethiopia, Malawi, Mauritania, Zambia – according to disclosure from Ethiopia’s Ministry of Finance. It came days after the BRICS summit in Kazan, Russia. 

According to the Ministry of Finance, the Washington round table, which was chaired by Italy, “addressed the pressing financial challenges faced by African countries, including increased debt service, the importance of enhancing pharmaceutical manufacturing capacity and green infrastructure development. “

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