IMF Calls for Economic Policy Adjustment

February 27 , 2021


IMF Calls for Economic Policy Adjustment

The International Monetary Fund (IMF) has called on Ethiopian authorities to reorient economic policies, citing economic challenges exerted by the Novel Coronavirus (COVID-19) pandemic, locust infestations, and the domestic security situation. This comes after a team of its staff led by Sonali Jain-Chandra held virtual discussions with Yinager Dessie (PhD), governor of the central bank, Ahmed Shedie and Eyob Tekalegn (PhD), minister and state minister of Finance, respectively, in January and February 2021. Unlike its earlier projection of flat growth in GDP, the IMF now says Ethiopia's economy will grow by two percent during this fiscal year, with an impressive rebound of 8.7pc the following year. The IMF attributed this outlook to budgetary expansions aimed at offsetting the impact of the pandemic, humanitarian assistance and reconstruction in Tigray, as well as measures in the borrowing and governance of state-owned enterprises. Nonetheless, it sees inflationary pressure due to rises in food prices and uncertainty as "ongoing challenges" Ethiopia will continue to face. Consumers are under pressure due to recent spikes where goods and services, from bread to rent and transport, have witnessed a doubling of prices. The value of the Birr against other currencies also continues to depreciate, with a 35pc drop over the past two years.


Radar

Ministry Revokes Hundreds of Mining Concessions

The Ministry of Mines has revoked the licenses of 972 for alleged non-compliance with the terms of their exploration and production permits, and involvement in illicit trade.  Among those on the receiving end of the measure is Kefi Gold, a firm that has been conducting gold exploration in the Western Wellega Zone of the Oromia Regional State for over a decade. The 2,000hct exploration area is estimated to hold deposits of close to 50,000Kg of gold. Last week, the National Bank of Ethiopia ap...


Radar

World Bank, Fed Agree on $715m in Funds to Fight Food Insecurity

The World Bank Group and the Ministry of Finance have signed an agreement for 715 million dollars to go towards fighting food insecurity. Most of the financing (600 million dollars) is earmarked for the implementation of a Food Systems Resilience Programme. A third of the amount is in the form of grants, while the balance is credit. An additional 115 million dollars is pledged for improving access to financial services and bolstering economic activity in pastoralist areas. The areas target...


Radar

DISRUPTION HOPEFULS

Youths checkout a booth at the AddisRupt Expo 2022, which was hosted at Safari Hotel on June 25, 2022. The expo focused on technological and entrepreneurial work, showcasing over 20 startups to visitors. The promoters of the expo aimed at connecting startups with investors and was organized by firms such as LinkUp Addis, Profit Marketing and Afromile Trading...