Ethiopia’s Macroeconomic Reform Receives Substantial Int’l Support, Registers Notable Successes – NBE Governor
Addis Ababa, — The recent macroeconomic reforms in Ethiopia have garnered significant international support while also achieving notable successes, Governor of the National Bank of Ethiopia (NBE), Mamo Mihretu remarked.
The Governor made this remark during “Ethiopia Finance Forum’ opened today in Addis Ababa.
The forum, hosted by the National Bank of Ethiopia, was aimed to align on the future of Ethiopia’s financial systems and promote collaboration and investment opportunities.
The forum is believed to serve as platform to policymakers, financial institutions, development partners, private sector stakeholders, financial sector experts as well as the international community and diaspora to discuss, share experiences and prospects for financial sector development.
In his presentation on the detailed background, implementations and achievements of the macroeconomic reforms being underway in Ethiopia, the Governor said the reform is exceptionally well-coordinated, meticulously designed, executed and managed by involving all relevant stakeholders throughout the preparation process, which spanned over a year.
The government has also taken a number of mitigating measures to minimize any adverse effect of the reform on the poor, the low income members of our society, he said citing the measures being taken to subsidize fuel, fertilizer and medicine among other things.
He also mentioned about the international supports that the reform has been receiving.
“One of the special features of this reform program was that it received significant international support… We have bilateral governments in the Middle East, China and the Paris Club member countries providing financial support and debt service relief as well.”
He particularly acknowledged the financing support provided by the International Monetary Fund (IMF) and the World Bank.
“I will note that their financing package to Ethiopia was exceptional in size, reflecting the strengths of our reform efforts.”
He emphasized that one of the most notable early achievements of the reform, especially in terms of monetary policy, was the reduction of inflation.
“Inflation was close to 30 percent for three successive years, and we managed to reduce inflation from 30 percent to 13 percent in March. And this is a significant achievement, because inflation now in Ethiopia is at its lowest point in five years.”
Citing empirical studies that showed the monetary financing of the budget contributes to inflation story in Ethiopia, he said, but now, he added that monetary financing as a source of inflation has been eliminated for the first time in more than 12 years in Ethiopia.
He also mentioned improvements being observed in foreign exchange supply and other related issues.
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