Day: March 20, 2023

Finance Minister of Ethiopia, Ahmed Shide said that Ethiopia is one of Africa’s recent examples of resilience in the face of multiple shocks.

The finance Minister Ahmed delivered speech on the 55th Conference of Ministers of Finance and Economic Planning is underway in Addis Ababa with the theme: “recovery and transformation in Africa to reduce inequalities and vulnerabilities.”

In his keynote address at the conference, the minister said that the current government of Ethiopia launched the Home-Grown Economic Reform in 2018 to ensure macro-economic stability, easing of doing business and addressing institutional constraints for inclusive and private-sector led growth.

Unfortunately, right after launching, the reform faced unexpected obstacles due to the outbreak of conflict in Tigray region, the COVID-19 pandemic, climate change induced shocks such as drought, and locust invasion in some part of the country, Ahmed pointed out.

“Amidst these internal and external shocks, the government exerted maximum effort to take the reform agenda forward and achieved remarkable results, including positive per capita income growth, better debt management, improved Foreign Direct Investment (FDI) flows and export performance, as well as privatization of public enterprises and liberalization of selected sectors, which have boosted private sector participation in the economy.”

He further stated Ethiopia also improved its domestic resource mobilization capacity through innovative reforms in tax administration, tax rates and application of information technologies.

In spite of these positive gains, most of the macro-economic imbalances such as fiscal deficit, foreign exchange depletion, galloping inflation and accumulated debt, remain stern economic setbacks, the minister acknowledged.

“We have therefore continued working on the second Home Grown Economic Reform to consolidate the gains and address current and emerging macroeconomic imbalances.

Furthermore, as we work towards peace consolidation, our reform also focuses on paving the way for equitable and inclusive post-conflict recovery that will contribute towards strengthening social cohesion among all Ethiopians,” according to him.

Speaking on the 55th Conference of Ministers of Finance and Economic Planning where they deliberate on Africa’s state of economic and social development, and regional integration, the finance minister underlined that Africa has a lot to do to resolve its socio-economic challenges, including the widening income inequalities and extreme poverty across the continent.

Until 2019, Africa was home to the world’s fastest-growing economies- a growth fueled partly by favorable terms of trade, better macroeconomic management and growing investment, Ahmed said. However, he argued that the advent of the COVID-19 changed this success story dramatically.

“The war in Eastern Europe disrupted global value chains, led to a spike in key commodity prices such as fuel, edible oil, wheat, and fertilizers as well as tightening of monetary policies in the developed countries, leading to an increase in global lending rates.”

Moreover, climate change induced droughts, floods and erratic rain patterns are not only disrupting economic activities and productivities, but also endanger millions of lives in our continent.

The combined impacts of the multiple and recurring global shocks are causing hardships unprecedented in recent memory and led to significant liquidity crunches in the economies of many African countries, the finance minister underscored.

The immediate and long-term consequences of COVID-19 and the global economic and security crisis are wakeup calls for Africa to rethink its development paradigms and seek homegrown solutions before the crisis engulf the continent, he urged.

For him, in order to address the multiple economic challenges of the African continent, it requires a collaborative and concentrated effort, which should be people-focused, sustainable in policy measures and inclusive enough in addressing the most vulnerable people.

The finance minister finally said the recent experience of his country (ETHIOPIA) on improving agricultural productivity to achieve food sovereignty is a prime example of exploiting collective wisdom of African stakeholders.

He also called upon all fellow Africans and partners to concentrate on their untapped potentials to transform the continent and eliminate undeserved poverty.

Source: Ethiopian News Agency

African countries should exert more effort on infrastructure connectivity to maximize the benefits of regional integration dimensions that are stirring in varying wheeler speed after the African Continental Free Trade Area (AfCFTA) rollout, UN Economic Commission for Africa (ECA) Regional Integration and Trade Division Director, Stephen N. Karingi said.

The director told ENA that Africa has seen a lot of progress on trade and market integration essentially due to AfCFTA rollout, and as countries, including Ethiopia started trading under it.

Noting that regional integration has many dimensions, pointing out trade and market integrations, infrastructure connectivity, movement of people and goods and social integration as the main ones, he said “we have seen that the different wheelers are moving at different speeds.”

He stressed that African countries should exert more effort on infrastructure connectivity to maximize the benefits of the regional integration dimensions that are stirring in varying wheeler speed after the AfCFTA rollout.

“On trade integration or the market integration, there is a lot of progress that has been achieved, especially because of the rollout of the AFCFTA, whereby state parties, including countries like Ethiopia, are already starting to trade under the AFC FTA,” Karingi said.

However, when it comes to the movement of goods and services in Africa under AFCFTA, the continent cannot maximize on the benefits of trade and market integration without more infrastructure connectivity works, he added.

“When it comes to the movement of goods and services within the continent, under the rules of AFCFTA, we see a lot of progress being achieved there. Of course, we cannot be able to maximize on the benefits of market integration, unless we have infrastructure connectivity, and that is one of the areas that requires a bit more effort it requires more effort than we have now.”

According to him, accelerating integration is a pillar of development for Africa and stressed the need to effectively implement the African Continental Free Trade Area (AfCFTA).

He noted that the impacts of the COVID-19 pandemic and the shock arising from the Ukraine war made it difficult for African governments to mobilize the necessary domestic and international resources for infrastructure development.

“One can understand that because of the COVID-19 shock, the shock arising from the Ukraine war, it has been a bit difficult for governments to be able to mobilize sufficient resources to finance infrastructure development. So, more effort is needed when it comes to the infrastructure integration or the connectivity,” he said.

The director noted that the single African Air Transport market has a lot of potential for connectivity in Africa.

He urged African governments to allow African airlines to land in their respective airports and pick up goods and services, move people, and to make progress on the ratification of the free movement protocol.

“Unless Africans are able to be able to move from one country to another, without pieces, it is going to be very difficult for us to have a maximum gains or maximum benefits of the market integration,” Karingi said.

Today, there are a lot of African countries that allow Africans to travel without visa, 25 countries provide visa on arrival and many others enabled electronic visa application, the director stated

Source: Ethiopian News Agency

The 7th round of National Coordination forum for economic diplomacy is being underway in the presence of Deputy Prime Minister and Minister Foreign Affairs Demeke Mekonnen.

Chief Administrators of regional states, ministers and other pertinent stakeholders are participating in a half-day forum.

At the opening of the forum, Deputy Prime Minister and Minister Foreign Affairs Demeke Mekonnen said following the peace agreement, the country has been registering encouraging results through economic diplomacy.

The forum will contribute to exchange views on the obstacles encountered in attracting Foreign Direct Investment (FDI).

He stressed that the government will give attention to lure more FDI by overcoming the hurdles in the investment sector.

Demeke also underlined in order to ensure the growth of the national economy, it is necessary to create a favorable development environment by correcting the deficiencies in the investment sector.

The National Coordination Forum for Economic Diplomacy established in 2011 aims to create a favorable investment environment by tailoring solutions to obstacles in investment fields.

Source: Ethiopian News Agency

Africa needs to foster recovery and transformation to reduce inequalities and vulnerabilities in the continent exacerbated by various problems, United Nations Economic Commission for Africa (UNECA) Acting Executive Secretary, Antonio M.A. Pedro said.

The fifty-fifth session of the Conference of African Ministers of Finance, Planning and Economic Development kicked off today in Addis Ababa.

The aim of the two days meeting is to renew focus and action on reducing poverty, inequality and other factors that leave the African population continuously vulnerable to these scourges.

Speaking at the event, UNECA Acting Secretary, Antonio M.A. Pedro said Africa’s growth is rebounding at 4.1 percent as inflation has been reduced to 12 percent so far.

However, the continent needs double-digit growth rates to achieve breakthroughs to promote a new cycle of sustainable growth, arrange regulated business and innovation climate, he said.

This will require paying detailed attention to ensuring that a strong macroeconomic foundation is in place to allow for structural transformation, he added.

We also need to push for reform of the global financial architecture to unlock long term financing, green jobs, pro poor policies, tax mechanism for carbon, and illicit financial flows, he elaborated.

“Africa must risk investment on the continent for both domestic and foreign investors to support the immense efforts that are required to develop a credible pipeline of bankable projects with limited fiscal space.”

Every dollar spent must generate maximum socio-economic impacts and co-benefits that go beyond GDP methods and profit maximization, and no one should be left behind, the acting Executive Secretary noted.

Speaking on his part, the Ethiopian Finance Minister Ahmed Shide said, until 2019 Africa was home to the world’s fastest growing economies.

According to him, the growth was fueled partly by favorable terms of trade, better macroeconomic management and growth investment.

“Most African economies have been doing so well in the past few decades that we were on track to meet most of the targets in SDG until multiple global and internal shocks threatened to unravel the several years of socio-economic gains.”

However, the advent of COVID-19 along with the war in Ukraine and the vagaries of climate change has pushed back Africa’s two decades of economic growth, he stated.

“Now millions of Africans have been pushed in to poverty, while millions more are at risk of falling into extreme poverty due to disruption in the global economy precipitated by the war in Ukraine and the frequency of weather caused by climate change.”

The immediate and long term consequences of COVID-19 and the global economic and security crisis are a wake-up call for Africa to rethink its development paradigm, he said, adding seeking a home-grown solution is vital before the crisis engulf the continent.

Source: Ethiopian News Agency