Ethiopia has taken a major leap forward in its economic dev’t – PM Abiy Ahmed

Addis Ababa, July 4, 2024 (FBC) – Ethiopia has taken a major leap forward in the 2023/24 fiscal year amid natural and man-made global and local challenges, according to Prime Minister Abiy Ahmed.

The Prime Minister made this remark at the 36th regular session of the FDRE House of People’s Representatives on Thursday morning.

In the regular session, the Prime Minister has presented the federal government performance report and responded to the questions raised by the parliamentarians regarding the federal government performance report of the 2016 E.C fiscal year and current issues.

Accordingly, the Premier highlighted Ethiopia’s economic activities during the 2023/24 (2016 E.C) fiscal year.

The government has initially planned to collect 529 billion birr in the 2016 E.C financial year in revenue, and 466 billion birr has been collected in the past 11 months of the outgoing Ethiopian fiscal year. This accounts for 96% of the annual plan which shows a significant progress compared to the previous financial year.

He mentioned that myriads of natural and man-made challenges have disrupted the global economic activities and trading in recent years, including COVID and conflicts. The PM admitted that these near and far factors have impacted his country’s economic endeavors.

Although the country’s previous and longstanding debts coupled with surmounting global challenges, PM Abiy asserted that his government has taken exploited challenges and implemented reformed systems of operations and managed to overcome the challenges and achieved promising economic achievements in the 2023/24 financial year.

According to him, a sustainable source of financing for the gov’t development initiatives includes tax collection.

PM Abiy confirmed that currently, only 64,000 individuals and companies contribute to tax collection, while 120 million people have various needs. “Taxing only 64,000 people cannot sustain our growing needs,” he noted.

Ethiopia has not taken any commercial loans over the past 6 six years because the government does not want to leave debts to the coming generation, according to PM Abiy Ahmed.  Instead, the government has paid over 10 billion USD in the form of settling the country’s loan, PM Abiy mentioned.

Ethiopia’s foreign debt amounts its 17.5 percent of its GDP which is much lower than other sub-Sahara African nations where some of them have foreign debt that amounts 60 percent of their GDP.

He confirmed that efforts will continue to be strengthened in order to reduce this amount to lower than the current amount.

He stated that Ethiopia collects tax only 7 percent of its GDP in the form of revenue. He hinted that if this rate is scale up to 10 percent of the GDP can help the country’s development and other undertakings.

“To ensure sustainable financing, we must reduce tax evasion and change the mindset that individual evasion doesn’t impact national growth. Efforts are underway to modernize the tax system, and we expect improved performance in the upcoming year.”

He confirmed that illicit and contraband trade activities remain the challenges to the country’s economic activities.

Meanwhile, he confirmed that Ethiopia imports 15M quintals of soil fertilizer yearly, with high logistical costs. This year, 13 million quintals were transported, 2 million more en route to Djibouti port.

Next year, Ethiopia targets seed self-sufficiency, distributing 40,000 motor pumps to farmers for irrigation.