The government of Ethiopia said it has begun implementation of its comprehensive macroeconomic reform policy as of Monday with revision of the country’s foreign exchange (FX) system effective immediately.
“The macroeconomic reform policy aims to correct foreign exchange distortions and solve the structural balance of payment deficit, reduce inflation by modernizing the monetary policy frameworks,” said a statement issued Sunday by the office of the Prime Minister of Ethiopia.
The office said the reform seeks to achieve national development aspirations by solving debt vulnerability and increasing domestic income, building a strong, inclusive, and sustainable economic system by improving government service delivery and business and investment environment.
“Ethiopia’s economy registered an average Gross Domestic Product (GDP) rate of 7.1 percent from 2019 to 2023 fiscal year,” said the office, stating that the east African country has become a significant player in the African economic landscape towards achieving the Sustainable Development Goals (SDGs).
“High and stable economic growth and maintaining single-digit inflation are among the major goals to be achieved during the implementation period of the macroeconomic reform policy,” the office highlighted.
The macroeconomic reform, which is supported by the International Monetary Fund (IMF), the World Bank, is set to build a modern and internationally competitive economic system and deliver substantial benefits to the country’s economy.
The office said a market-based foreign exchange rate regime is critical to relieve the country’s foreign exchange shortages, align the prices of import and export goods and services with market realities and address the balance of payment deficit.
It said the policy reform program will open avenues for Ethiopia to secure new development financing, particularly from the World Bank, other development finance institutions, and bilateral lending organizations.
“Through the implementation of this macroeconomic reform program, Ethiopia would receive billions of dollars both directly and indirectly,” the office’s statement noted.
MG/as/APA