Addis Chamber, August 16, 2024: In a historical measure taken by the Ethiopian government , a new economic policy has allowed the liberalization of Ethiopia’s, foreign exchange market to be determined by market forces, such a breakthrough that determines the fate of economic development and competitiveness of the Ethiopian private sector at large.
A midst of such measure comes Addis Chamber for long advocating for such measures to take on thus undertaken various researches to influence policy makers to consider business friendly policy decisions including but not limited to the five year policy plan disseminated wide to concerned government entities and relevant stakeholders.
As part of its mandate, Addis Chamber hosted a mega panel discussion on the subject matter. Themed with “The Impacts of the Major Revision of a Country’s Foreign Exchange System on the National Economy”.
The panel discussion tries to address major issues such as floating exchange system, fundamental theoretical foundation and best practices, the Ethiopian Forex Market with a focus on the newly introduced major revision of the Foreign Exchange System, Financial Administration , its implication for private sector in Ethiopia, opportunities and challenges among the likes.
In her key note address to the gathering, Mesenbet Shenkute, President of Addis Chamber, reiterates the role of Addis Chamber in tirelessly promoting major concerns of the private sector and its members to have access to foreign currency, one of the biggest challenges to date hampering ease of doing business.
A case in point is a comprehensive five year policy plan was prepared and shared to concerned government body that calls for financial reform measures including forex liberalization, she added.
While addressing the panel, Gizat Worku, General Manager from Ethiopian Coffee Association, said that the forum is timely and essential to exchange ideas about the current forex reform that directly concerns major export sectors such as coffee that covers 40 percent of forex money.
Succeeding to those key note address, rounds of panelists have forwarded their thoughts and expertise about the new forex reform measures, pros and cons.
Despite such measures taken by the government, prior conditions have to be there to properly carry out including the need to have sound market infrastructure, the need for resilient financial system, strong macro-economic foundation and support from international partners such as IMF.
With doubts and hopes, such panelists expects the new reform to accelerate economic growth and improve balance of payment , enhance remittance , mitigate inflation and boosting private sector in Ethiopia.
In addition to these, the new reform measure is expected to enhance export performance of the country paving the way for ample opportunities to earn foreign debt for private sector.
It is not going to be a smooth selling for Ethiopia, remarks one of those panelists further saying a number of countries are carrying out such measures with both success and failure, yet the government need to adhere to strict discipline, the need to have effective market regulation on the part of the government and the need to adhere to strict, smart and consistent market regulation to succeed on the new reform.
This is one of the biggest reform measures ever seen in the country regarding forex, underlines a panelist yet calling on the government to enhance the purchasing power of societies while mitigating inflation.
Discussants of the session on their part forwarded a number of recommendations including the need to tackle inflation a midst of such measures, the need to enhance the export performance of the country, the need to bring sustainable peace in the country, the readiness of the country to accommodate such measures, and the need to balance demand and supply of currency and products among others.