AACCSA says macroeconomic reforms help tackle private sector challenges

Addis Ababa, August 18, 2024 (FBC) – In addition to promoting economic stability and fostering growth, the recent macroeconomic reforms are poised to significantly address the challenges faced by the private sector, as reported by the Addis Ababa Chamber of Commerce and Sectoral Association (AACCSA).

AACCSA hosted a half-day discussion forum yesterday in collaboration with the Ethiopian Coffee Association, centered on the theme: “The Impact of Major Revisions to the Country’s Foreign Exchange System on the National Economy.”

During her opening remarks, AACCSA President Mesenbet Shenkute highlighted that these macroeconomic reforms are expected to alleviate the foreign currency shortage, stimulate investment, and promote exports, among other benefits. She noted that the private sector has struggled with foreign currency shortages and limited access to loans for many years.

Mesenbet emphasized the essential role the private sector plays in generating employment, enhancing production and productivity, and maximizing revenue, despite facing challenges such as infrastructure deficits and inflation that have weakened its global competitiveness. She expressed optimism that the recent reforms, particularly the introduction of a floating foreign exchange rate, would help mitigate these obstacles.

Ethiopian Coffee Association General Manager Gizat Worku stated that a free-floating exchange rate would enhance export opportunities. He pointed out that coffee exports account for 40% of the country’s foreign currency earnings and provide numerous jobs, thus making the macroeconomic reforms pivotal for market facilitation.

Participants at the forum, which included economic experts and senior government officials from the National Bank of Ethiopia (NBE), collectively acknowledged that the country faced significant risks related to loans and various accumulated economic issues over the years. They concurred that without the implementation of these reforms, Ethiopia’s economy would likely confront serious difficulties.