Finance Minister says Economic Growth Gaining Momentum

• 30 firms ‘expressed interest to acquire Sugar factories’

By Sisay Sahlu

ADDIS ABEBA – Ministry of Finance expects Ethiopia’s economic growth to regain its momentum this year following a wide range of structural reforms the government has taken past year.

Ethiopia’s real gross domestic product (GDP) growth decelerated to 7.7% in 2017/18, from over 10.3 in 2016/17.
It is now slowly recovering, Finance Minister Ahmed Shide told Members of parliament on Wednesday.

The finance minister projects “encouraging” economic growth rate for the current fiscal year stating his expectation a rate similar to that of International Monitory Fund (IMF). Ethiopia’s economy is predicted, according to IMF, to grow by 8.5 percent this year.

“We are treating an economy that has been sick for considerable time,” Ahmed said, adding the government is “working hard to reduce” the current double-digit inflation rate.

Headline inflation, an indicator of the cost of living, soared to 12.9 percent in April, marking the highest rate in eight months, revealed data released by the Central Statistical Agency in May.

The index has shown a 1.8 percentage point increase from the preceding month. “This has been very challenging. At least we have managed to halt its growth,” he said.

The Minister attributed the increase of the cost of living to incompatibility of demand and supply in the market.

The nation needs a serious investment to produce more locally, Ahmed said while responding questions raised by MPs concerning the sharp raise of the cost of living.

He also claimed forex crunch too has contributed to the increasing inflation as well as traders who hoarding basic commodities.

– Privatization –

The finance minister also defended the pace with which privatization process of major public enterprises are heading. The whole privatization is aimed at making public enterprises competent and more profitable than before, he said.

Currently government has selected six public enterprises which will be privatized in the first round.

“We are now conducting evaluation and feasibility studies on these projects with the involvement of international consultants,” he said. Five sugar factories are expected go under the hammer.

The government has recently issued a request for information notice on the websites of Sugar Corporation and ministry of finance inviting interested firms.

At least thirty firms have shown interests to acquire state-owned sugar factories. “The notice will help us to know who wants which factory and their plan,” said Ahmed.

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