Fortune News | Oct 03,2020
Apr 6 , 2019
Prime Minister Abiy Ahmed (PhD) has marked his first year in office with a speech made early last week at Millennium Hall. Televised live, he was not received in euphoria as the case was when he was sworn in before parliament on April 2, 2019. It appears that the honeymoon for Abiymania has come to an end. He is now as much subjected to criticism as there still are many applauding his work and words, gossip observed.
Such is a development that might have put a toll on him, for the Prime Minister lately makes evident his frustrations as he becomes ever more defensive over his administration’s record to date, gossip sees. His audience can easily discern when he tries to lash out at some of the remarks people make over their concerns, reservations or opposition to his ways of governance.
Judging by his recent statements last week, it may be about time for the Prime Minister to develop the art of saying something without necessarily meaning much, a trait politicians often equip themselves with, claims gossip. Abiy’s most confusing, if not controversial, part of this speech was his claim that he helped the nation generate 13 billion dollars in only seven months, of which more than half was used by the private sector. He also took pride in calling such forex mobilization “unparalleled” in the country’s history.
What might have prompted him to make such claims now, and the accuracy of his statement, was the subject of interest near and far.
His governor for the central bank, Yinager Dessie (PhD), alarmed the nation a while back after he told MPs that the level of forex reserves were falling - covering just two and a half months of imports - and that the economy would suffer from a crunch soon. He warned that unless something significant happened to reverse the situation, the country would be forced to allocate all its forex to the import of medicine and oil.
The Prime Minister might have made this claim hoping to calm a market that was in panic mode. Nonetheless, the conflicting messages that come from the top man in government and the most crucial person stirring the economy reveal how much the administration’s officials are not in tandem, claims gossip. It merely exposes the lack of coordination between them in their messaging, gossip says.
Neither is it clear what keeps the governor up at night to ring such an alarm, since the forex crunch in the economy is nothing new, and there were far worse moments than this, according to gossip. A couple of years ago, the country’s forex reserves had dwindled as low as covering only three weeks of import bills, claims gossip. However, if he is to respond generously to demands from the nation’s commercial banks, and in particular from the state-owned Commercial Bank of Ethiopia (CBE), there is no doubt the reserves will plummet quickly.
Despite Yinager’s determination to tighten the purse, he is under huge pressure to fulfill CBE’s steady demand for forex. CBE has high exposure in letters of credit it has been issuing, causing panic in official circles due to a risk of default on its commitments, gossip disclosed. Never mind that Ethiopia requires no less than 20 billion dollars to pay for the completion of its many public projects, including its largest dam that has so far consumed 3.4 billion dollars, which is over 600 million Br more than budgeted initially, claims gossip, though only 66pc of the massive project has been completed to date.
The Prime Minister took the risk of pinning himself down to specific numbers, which made it harder to account for the breakdown, claims gossip. Indeed, the World Bank has committed 4.5 billion dollars to support Ethiopia’s economy, while the Abu Dhabi Fund for Development has made one billion dollars available in a time deposit and two billion dollars in foreign direct investments. What is left is forex revenues that may have been generated from exports, remittances and services. But it is hard to see the numbers add up to what the Prime Minister would have wanted the nation to believe, claims gossip.
PUBLISHED ON Apr 06,2019 [ VOL 19 , NO 988]
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