ADDIS ABABA–The continuous demand-supply imbalance and ill-investment strategy of the former administration have resulted in the structural and worsening current inflation, so disclosed Planning and Development Commission.
The Commission’s Deputy Commissioner with the rank of State Minister Nemera Gebeyehu (Ph.D) told The Ethiopan Press Agencey (EPA) that even though many people believe inflation is worsened after the reform, the reform measures taken by the government do minimize the inflation, but a lot remains to be done since it is structural driven from the ill-investment strategy of the former administration.
Nemera stated that the current inflation problem is not the result of the reform rather it is due to the unhealthy nature of the former investment strategy. However, many people have misunderstood this fact. This is absolutely wrong.
As to him, adjusting the inflation needs serious measures and actions since it is structural. He added that the investment in Ethiopia before the change in 2018 didn’t give attention to productivity and the government investment of the time was not strategic. This ill-investment strategy, low production and productivity, economic sabotage and market miss-management leads the country to inflation for a long period of time partiularly after 2005.
According to Nemera, to control inflation in Ethiopia, government is taking multidimensional reforms at structural, administrative and other policy reforms mainly at macro-economic level.
Meanwhile, the Deputy Commissioner noted that the Home-grown Economic Reform implemented by the incumbent government has significantly role in stabilizing the macro-economy of and to exploit further sectors.
The reform plan has three major components of macro-economic management, structural economic reform and widening economy sectors of the country, Nemera said, adding that these critical reforms helped the country in policy reforms, removing barriers of business and investment, reforming administrative issues and other challenges of the business and investment activities.
The reform actions following the home-grown economic have helped the country minimize debt stress, boost local revenue by reforming the tax policy and create suitable business and investment climate for private sector.
“Since the home-grown economic reform has shown significant developments in transforming the economy and removing the major barriers, the country’s macro economy is becoming stabilize and Ethiopia takes this reform plan as a base for its ten year development plan,” Nemera stated.