As Ethiopia marks the first anniversary of its macroeconomic reforms, economists are urging the government to prioritise inflation control to solidify public trust and ensure the reforms' long-term success. The comprehensive reforms, undertaken with support from the International Monetary Fund (IMF), have yielded positive results, including increased exports and bolstered foreign exchange reserves, but economists stress the need for tangible benefits to be felt by the general populace.
The reforms, implemented amidst both internal and external pressures, have attracted significant international financial assistance.
According to economist Zemedeneh Nigatu, the package includes $3.4 billion from the IMF and $16.6 billion from the World Bank, making it one of the largest financial aid packages ever provided to a sub-Saharan African nation.
Zemedeneh believes the reforms are demonstrably successful, especially given that they've started to dismantle the pervasive black market that plagued the country's economy.
He estimates that the informal market potentially diverted upwards of $32 billion.
Zemedeneh also highlighted the potential for Ethiopia to become Africa's fastest-growing major economy within the next five years, citing optimistic IMF forecasts based on the reforms' projected impact. He contrasted Ethiopia's situation with countries struggling with high inflation due to their inability to implement similar reform decisions, using Argentina as an example.
However, economist Abule Mehari (PhD) cautions that the focus should now shift to preserving and expanding upon the reform's initial gains.
He emphasises the crucial need to stabilise inflation and make the impact of the comprehensive economic reform visible to the Ethiopian community.
Abule argues that only through controlling the cost of living can the government demonstrate the real value of these macroeconomic changes to everyday citizens.
Abule further stressed the importance of strategic resource allocation, urging the government to prioritise boosting production and productivity, and maximising wealth generation through exports.
The economists also agree on the necessity of modernising key sectors, particularly agriculture, and expanding the export environment to capitalise on the reforms' momentum.
This includes investing in technology, infrastructure, and skills development to enhance competitiveness in the global market.
The call for inflation control and tangible public benefits comes at a critical juncture for Ethiopia.
While the initial indicators are promising, the success of the reforms ultimately hinges on their ability to improve the lives of ordinary Ethiopians and foster a sense of shared prosperity.
The next phase will require careful management, strategic investments, and a relentless focus on delivering concrete results to a population eager to see the promise of economic transformation fulfilled.
According to the economists, by focusing on these key areas, Ethiopia can cement its position as a leading economic force in Africa and secure a more prosperous future for its citizens.
