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Reforms saved Ethiopia from economic crisis, says Finance Minister

Addis Ababa, January 29, 2025 (FMC) – The policy reforms implemented in Ethiopia during the reform years have saved the country from economic crisis, Finance Minister Mr. Ahmed Shide said.

In his briefing about the reform endeavors carried out in the economic sphere and the  achievements, the minister said the economy had been in a dire situation before the reform due to lack of proper management.

Before the implementation of the reform, he recalled that government revenue stagnated, debt burden reached high level, and the lending capacity of banks declined. In general, the financial system was unhealthy.

Following the implementation of policy reforms, however, the economy was rescued from crisis by building a healthy economy that withstands challenges and realize sustainable growth, the minister elaborated.

Fiscal and monetary policy measures, foreign exchange reforms, and implementation of various  procedures with the goal of increasing the participation of the private sector were carried out, Ahmed pointed out.

According to him, the economy which depended on limited sectors has been diversified during the reform that prioritized a multi-sectoral approach.

Activities carried out to ensure the contribution of banks to the economy were  effective, the minister said. The performance of the Commercial Bank of Ethiopia is a testament to this.

The policy measures taken by the government have played a constructive role in improving the performance of public enterprises that have been crucial for the recovery of the economy, he further revealed.

For the Minister, the introduction of a floating exchange rate has curbed illegal trade activities by narrowing the gap between the official and the parallel markets.

Subsidies on basic commodities, including fuel, to control inflation have also resulted in encouraging results due to the comprehensive efforts of the government.

Ahmed noted that the policy measures have contributed significantly to the stabilization of the economy by attracting a large amount of foreign currency from development partners and lending institutions, as reported by ENA.

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