Ethiopia announced Sunday it entered full-fledged macroeconomic policy implementation, according to Office of the Prime Minister.
In Macroeconomic Reform Program Policy statement issued, the office said policy and legal reform processes have brought new hope for the economy to transition to a more stable macroeconomic environment.
Following the political change of 2018, the government has been making reforms for the past six years to solve accrued economic structural challenges in the past, the statement said.
Debt burden, inflation, unemployment, slow economic structural change, low sector productivity, low performance of development projects and waste of resources are some of the accrued economic structural challenges, it added.
According to the statement, the first phase of the Home-Grown Economic Reform Program, which was implemented in fiscal year 2019, encompassed many policy ideas and achieved large-scale economic objectives and goals.
Despite the remaining works, efforts to correct macroeconomic imbalances, alleviate debt burden, increase domestic production capacity, expand sources of economic growth, create job opportunities and fix structural bottlenecks have proved successful.
Ethiopia has become one of the fastest growing countries in the world by achieving continuous economic growth in the last six years, it added.
Mentioning the achievements within the 6-yera reform period, the statement said: “Between 2010 and 2015, the average GDP growth reached 7.1 percent, adding to the country’s momentous role in the African economic environment.”
It has also indicated success in implementing SDGs. “Ethiopia has also demonstrated its commitment to achieving the Sustainable Development Goals and built the largest economy in East Africa, becoming the third largest economy in sub-Saharan Africa. The government's ability to collect tax revenue has improved.”
It underlined that the recently approved second phase of the Homegrown Economic Reform Program (HGER 2.0) “reaffirms the government's commitment to completing the remaining macroeconomic reforms.”
The major macroeconomic objectives, the statement revealed, have received international backings.
“Over the past years, there have been significant development cooperation and financing efforts and negotiations for the implementation of our Home-Grown Economic Reform program. These negotiations have been conducted with adequate knowledge and wisdom for outcomes that protect Ethiopia's national interests and improve the lives and livelihoods of our citizens.”
Hence, the macroeconomic reform endeavor which is within the framework of our Home-Grown Economic Reform program and Mid-term Investment and Development Plan (MDIP) is supported by the International Monetary Fund, the World Bank, and other critical development partners.
Among the key goals of the Macroeconomic Reform Program, the statement mentioned are “correcting foreign exchange distortions and solving the structural balance of payments deficit problems, reducing inflation by modernizing the monetary policy framework, and strengthening the inclusiveness, competitiveness, and soundness of the financial sector.”