Addis Ababa: Ethiopia’s macroeconomic reform policy will unlock and fundamentally transform the stagnating economy, Ethiopian Steel PLC CEO Bhavesh Chandaria said.
The chief executive officer with rich experience about Africa stated that the years of restrictive economic control regime in Ethiopia did not pay rewards to Ethiopia.
As the decades of the restrictive economy control regimes failed to improve the economy, the country has embarked on a macroeconomic reform policy that is under implementation.
Like many economists, Chandaria described the reform as a ground-breaking and transformational change that would stimulate to Ethiopia’s stagnant economy by addressing deep-seated economic structural issues, including foreign exchange distortions and macroeconomic imbalances.
‘This reform is ground-breaking. It has gotten attention and all my global friends and investors have been calling since last week to find out how it actually pans out. I found it is comprehensive, holistic and business incorporation.
Corporates cannot ask for more,’ he said.
Most importantly, the CEO noted that the reform would unlock and transform the economy from the sellers market where buyers and customers were suffering.
According to him, consumers in the Ethiopian economy have suffered from high cost, long wait period, lack of choices to a fair, efficient market and buyers market.
The reform would eliminate the opportunity and power advantage unduly given to traders to certain intermediaries like banks and monopoly, he added.
In addition, the macroeconomic reform will fundamentally stimulate the country’s Foreign Direct Investment (FDI), Chandaria pointed out.
The reform also lends an opportunity to enhance manufacturers’ production capacities, which are suffering under capacity.
‘So we cannot have a situation where manufacturers are suffering under capacity. When the manufacturing industry happens, value addition, digitization would happen and employment would be generated ……. This will also galvanize the Made in Ethiopia nat
ional campaign. And
when it’s manufactured in Ethiopia, the consequential benefits would definitely be to the people.’
Asked about the impact of the reform on inflation, Chandaria said the government had made tremendous moves to address the challenges before unleashing the FX reforms that would affect the low-income sections of the society during the transition.
‘Roughly one-third of the expense of poor people is taken care of, and the government will decide and control the rise. So, that is a well done job. In this reform, it is embedded that fuel, fertilizer, edible oils, and foodstuff would have a kind of support through global agencies and through the government.’
The country needs to try the new things that are opening up the economy as inflation in Ethiopia was already upwards of 25 to 30 percent, he underscored.
‘We tried the status quo, it led us to this situation. The restrictive economy control regimes did not pay rewards.’
Therefore, ‘what Ethiopia needs now is optimism. Optimism from the med
ia, thinkers, traders, labor unions, professional, and investors like us.’
The CEO further pointed out his belief that things may get a little worse before they get better.
‘I do believe any change requires 1,000 days and a hockey effect will come into play before things get better. They get a little worse, and then they go back to the progress. So we need to navigate.’
Finally, Chandaria stressed that the implementation of the macroeconomic reform requires stakeholders engagement, sound implementation plans as well as change management practices.
Source : Ethiopian News Agency