Finance minister Ahmed

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

“We are creating an economy that has been sick for a 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 in the cost of living to the incompatibility of demand and supply in the market.

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

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

– Privatization –

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

Currently, the 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 to go under the hammer.

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

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