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http://www.bridge.ids.ac.uk/reports_gend_ CEP.html#Budgets The Gender Responsive Budgeting website is a colla- borative effort between the United Nations Development Fund for Women (UNIFEM), the Commonwealth Secre- tariat and Canada's International Development Research Centre (IDRC), which was launched in 2001. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
The website strives to support efforts of governments, women’s organ- isations, members of parliaments and academics to ensure that planning and budgeting effectively respond to gender equality goals.
The site also provides practi- tioners with a variety of resources, assessments and train- ing materials on gender responsive budgeting. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Finally, it aims to promote cross-regional information-sharing on country experiences and facilitates networking and col- laboration amongst countries, civil society and interna- tional organisations.
http://www.gender-budgets.org/ The International Budget Partnership (IBP) was formed within the Centre on Budget and Policy Priorities to collaborate with civil society organisations in develop- ing countries to analyse, monitor, and influence govern- ment budget processes, institutions, and outcomes. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
The website is a repository of reports, resources, and net- works which provide useful information on efforts ANNEXES Gender budgeting: practical implementation 73 around the world to promote more transparent and people-centred budget systems.
http://www.internationalbudget.org/ Bibliography Buddlender, Debbie, and Rhonda Sharp, with Kerri Allen.
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How to do a gender-sensitive budget analy- sis: Contemporary research and practice.
London and Canberra: Commonwealth Secretariat and AusAid. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Elson, Diane (2002): Gender-responsive budget initia- tives: Some key dimensions and practical example.
In: Gender budgeting initiatives.
strategies, concepts and experiences.
Papers from a high-level international conference, “Strengthening economic and financial governance through gender responsive budgeting”, 16-18 October 2001, Brussels.
Feiler, Klaus (2008).
A future-oriented steering mecha- nism: Gender budgeting in Berlin. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Powerpoint presen- tation given at the 52nd Session of the United Nations Commission on the Status of Women Meeting on “Financing for gender equality and the empowerment of women” 25 February-7 March 2008.
New York.
Gender mainstreaming.
Conceptual framework, meth- odology and presentation of good practices.
Final report of activities of the Group of Specialists on Main- streaming (EG-S-MS).
Directorate General of Human Rights, Council of Europe, 1998. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Gubitzer, Luise, Klatzer, Elisabeth and Michaela Neu- mayer (2008), Gender budgeting – Anleitung und Beispiele zur Umsetzung in öffentlichen Institutionen, Vienna [Gender budgeting handbook for public offi- cials].
Holvoet, Nathalie (2006) Gender budgeting: Its useful- ness in programme-based approaches to aid.
EC Gender Helpdesk.
Junta de Andalucia.
Consejería de Economía y Haci- enda. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Consejería de Economía y Haci- enda.
Elaboración: Comisión de Impacto de Género en los Presupuestos (2007): Gender impact evaluation ANNEXES Steering Committee for Equality between Women and Men 74 report from the draft budget for the Autonomous Region of Andalusia for 2008.
Klatzer, Elisabeth.
Watch Group.
Gender and Public Finance (2008): The integration of Gender Budgeting in Performance-Based Budgeting. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Paper presented at the conference “Presupuestación Pública Responsable con la Igualdad de Género” (Public budgeting respon- sible to gender equality), 9-10 June 2008, Bilbao.
Klatzer, Elisabeth and Michaela Neumayr (eds.)
Watch Group.
Gender and public finance (2006): Gender budgeting in Europe.
Conference documen- tation from meeting of European Gender Budgeting Initiatives, 5-7 February 2006.
Madoerin, Mascha (2007): Gender-responsive budget- ing initiatives in Switzerland: Work in progress. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Editor: Federal Office for Gender Equality, Switzerland.
Translation: Thor Erik Maeder, Laos.
Me, Angela (2008), What are the new challenges for Gender Statistics?
In Gender Gap and Economic Poli- cies: Challenges and good practices, ed.
Ewa Ruminska-Zimny, Geneva and New York, 2009 (forth- coming).
Outla, Veronika et al.
(2007), Gender budgeting in practice.
Report from a Transnational GenderAlp Project involving Austria, Bulgaria, Czech Republic, Hungary and Italy. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Report on gender budgeting.
Final report of the Group of Specialists on Gender Budgeting (EG-S-GB).
Direc- torate General of Human Rights, Strasbourg, 2005.
Sharp, Rhonda (2003): Budgeting for equity.
Gender budget initiatives within a framework of performance oriented budgeting.
New York: United Nations Devel- opment Fund for Women.
Swedish Government Official Reports, (2007:15).
Gender mainstreaming manual. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Gender mainstreaming manual.
A book of practical methods from the Swedish Gender Mainstreaming Support Committee (JämStöd).
Swedish Government Official Reports, (2007:15).
Gender Equality in Public Services.
Some useful advice ANNEXES Gender budgeting: practical implementation 75 on gender mainstreaming.
A book of ideas for manag- ers and strategies from the Swedish Gender Main- streaming Support Committee (JämStöd).
Swedish Government Offices (2006). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Swedish Government Offices (2006).
Moving ahead: Gender budgeting in Sweden Van Beveren, Jacintha, Thera van Osch and Sheila Quinn, 2004, Budgeting for all: Manual for local gender budget initiatives, Vrouwen Alliantie, Utrecht.
Von Felton, Mirjam (2008) in Gender-responsive budget analysis in the Canton of Basel-Stadt, Switzer- land.
Editors: Office for Gender Equality of the Canton of Basel-Stadt, Statistical Office of the Canton of Basel- Stadt, Women’s Council of the Canton of Basel-Stadt. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
Weinmann, Ute (2007), Implementation of gender budgeting in the Federal State of Berlin.
Paper given at the 2nd Andalusian Conference on Economy and Budgeting with a Gender Perspective.
12 and 13 December 2007, Malaga.
Gender Equality Division Directorate General of Human Rights and Legal Affairs Council of Europe F-67075 Strasbourg Cedex | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050737942.pdf | https://rm.coe.int/1680599885 |
FEDERAL DEMOCRATIC REPUBIC OF ETHIOPIA A Homegrown Economic Reform Agenda: A Pathway to Prosperity Public Version: Edited – March 2020 Disclosure: Market sensitive information has been removed from the document before publication.
Abbreviations and Acronyms ASM Artisanal and small-scale BOP Balance of Payments BPO Business Process Outsourcing CBE Commercial Bank of Ethiopia CFTA. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Continental Free Trade Agreement DBE Development Bank of Ethiopia EEA Ethiopian Energy Authority EEP Ethiopian Electric Power EEU Ethiopian Electric Utility EFY Ethiopian Fiscal year EIC Ethiopian Investment Commission EMAA Ethiopian Maritime Affairs Authority ESLSE Ethiopian Shipping and Logistics Services Enterprise FDI Foreign Direct Investment GDP Gross Domestic Products GOE Government of Ethiopia GTP Growth & Transformation Plan ICT Information and Communication Technology IFRS International Financial Reporting Standards IPDC Industrial Parks Development Cooperation IMF International Monetary Fund IP Industrial Parks IPP Independent Power Producer IPPS Independent Power Producers IT. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Information Technology ITC International Trade Commission LPI Logistics Performance Index LSM Large Scale Mining MFI Micro-finance Institutions MICE Meetings, Incentives, Conference and Exhibitions MSME Micro Small and Medium Enterprise MoF Ministry of Finance NBE National Bank of Ethiopia NPL Non-Performing Loans OSH Occupational Safety and Health system PPPs Public Private Partnerships PDC Planning and Development Commission SME Small and Medium Enterprise SOE State Owned Enterprise SSA Sub Saharan Africa STEM Science Technology Engineering & Mathematics TFP Total Factor Productivity TVET Technical & Vocational Education & Training WTO World Trade Organization 1 Contents Executive Summary ........................................................................................................................................... 2 1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Economic performance since the mid-2000s ........................................................................................ 4 1.1.
Achievements─ remarkable growth and poverty reduction ...................................................................... 4 1.2.
Drivers of the economic success ................................................................................................................... 5 1.3. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Remaining gaps to reaching a lower-middle income level ......................................................................... 8 2.
Headwinds against economic progress ................................................................................................. 10 3.
Problems of continuing with the status quo ........................................................................................ 13 4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Rebalancing and sustaining growth through a homegrown economic reform program .............. 14 4.1.
Reform Objectives ......................................................................................................................................... 14 4.2.
Macro-financial reforms ................................................................................................................................ 15 4.2.1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Strengthening public sector finances and SOE reforms ................................................................................. 16 4.2.2.
Addressing the foreign exchange imbalances ................................................................................................... 17 4.2.3.
Strengthening the monetary policy framework and financial regulations .................................................... 18 4.2.4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Reforming public financial institutions and dealing with vulnerabilities at public banks .......................... 18 4.2.5.
Enhancing financial sector development and developing capital markets ................................................... 19 4.3.
Structural reforms ........................................................................................................................................... 20 4.3.1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Speedup ongoing reforms to ease constraints to doing business .................................................................. 21 4.3.2.
Ease tariff and non-tariff barriers to international trade ................................................................................. 22 4.3.3.
Improving governance and capacity of public institutions ............................................................................. 22 4.3.4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Ensure efficient logistics services ........................................................................................................................ 23 4.3.5.
Improve power reliability and access ................................................................................................................. 24 4.3.6.
Implement the telecom sector reform ............................................................................................................... 25 4.4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Sectoral reforms .............................................................................................................................................. 26 4.4.1.
Agriculture .............................................................................................................................................................. 26 4.4.2. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Mining ..................................................................................................................................................................... 29 4.4.3.
Manufacturing ........................................................................................................................................................ 31 4.4.4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Tourism ................................................................................................................................................................... 34 4.4.5.
ICT and Digital Economy ................................................................................................................................... 36 5. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Implementation arrangements ............................................................................................................... 38 2 Executive Summary Over the past 15 years, the Ethiopian economy registered a remarkable double-digit real GDP growth and over a six-fold increase in per capita GDP to about US$865 in 2018. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
This has been accompanied with a significant poverty reduction from 44.2 percent in 2000 to 23.5 percent in 2015, and improvements in access to education, health, and infrastructure.
High public investments in infrastructure and human capital development fueled the country’s growth.
These investments narrowed fundamental gaps in transport and energy infrastructure and human capital developments, there by laying the foundation for a sustained growth. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
However, the public investment led growth model had its shortcomings.
While significant strides have been made, both GTP I and GTP II have not entirely been successful in achieving structural transformation and stimulating exports.
The growth has also failed to stimulate private sector development to create decent jobs; gaps remain in ensuring quality universal access to basic services to all Ethiopians. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Furthermore, the efforts to finance ambitious public investment programs through directing domestic financial resources and significant external borrowing, coupled with poor project execution, resulted in serious macro-economic imbalances— foreign exchange shortages, increased risk of external debt distress, growing financial sector vulnerabilities, limited access to finance for the private sector, high inflation, and potential misallocation of resources. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
These macro-economic imbalances, if not corrected immediately, jeopardize the journey to a middle-income economy by 2025.
On this backdrop, the GOE is launching a comprehensive and well-coordinated homegrown economic reform agenda with the goal to safeguard macro-financial stability and rebalance and sustain economic growth.
The reform agenda builds on the achievements of the past decade in infrastructure and human capital developments. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The primary objective of the agenda is to sustain the economic growth through creating an economic environment supportive of higher private investment and structural transformation.
It encompasses three key pillars at the macro-financial, structural, and sectoral levels.
Macro-financial reforms aim to reduce the risks associated with public debt, lower external vulnerabilities, arrest inflation, and enhance growth, investment, and exports. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
These reforms include (i) strengthening public finances including through improving the efficiency of SOEs and privatization, (ii) gradually moving towards a flexible exchange rate regime to address external imbalances, (iii) strengthening the monetary policy framework with the objective to stabilize prices and support economic growth, and (iv) enhancing financial sector development and developing capital markets. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The structural reforms aim to address bottlenecks inhibiting private sector growth through (i) stepping up reforms to ease the constraints to doing business, ii) easing tariff and non-tariff barriers to international trade, iii) improving the efficiency of public institutions, and iv) improving services such as logistics, telecom, and electricity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The sectoral reforms aim to address market failures and address sectoral regulatory and investments constraints to promote investment in sectors including such as agriculture and manufacturing, and unleash new growth potentials in sectors such as tourism, ICT, mining, and the creative industries.
3 Successful macro-economic reform requires coordination and synchronization among forex, monetary, fiscal, financial, and capital market reforms. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
To balance the urgent need for addressing macroeconomic imbalances with the need to minimize potential economic costs of rapid (‘shock therapy’ type) reforms, the home grown macroeconomic reform agenda will be implemented in the course of three years with careful calibration of the pacing, sequencing, and timing of specific reform measures.
The reform agenda will be implemented through a structured and coordinated whole-of government approach. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The Ministry of Finance will lead and oversee the implementation of the agenda through the Macro-Economic Committee, which reports to the Prime Minister.
Each pillar – macro-financial, structural, and sectoral – will be coordinated through a sub-committee comprised of relevant offices.
Implementing the proposed reform agenda requires mobilization of financial and non-financial resources. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Enhancing domestic revenue mobilization, particularly significant improvement in tax collection, coupled with external resource mobilization will be at the core of the reform agenda’s financing strategy.
The concerted engagement of all segments of society— private sector, academia, and civil society— will be important; thus, broad consultations will be undertaken throughout the reform period to enhance ownership of the agenda by all stakeholders. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
At the completion of the reform measures, we envision a stable macroeconomy that can sustain a rapid and inclusive economic growth setting the country on a path to prosperity.
The reform measures will set the foundation for a robust, resilient, and diversified middle income-level economy through the formation of a dynamic private sector and modern policy and institutional frameworks.
4 1.
Economic performance since the mid-2000s 1.1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Economic performance since the mid-2000s 1.1.
Achievements─ remarkable growth and poverty reduction Prior to the mid-2000s, economic growth in Ethiopia was anemic and highly volatile.
Real GDP grew only at 1.4 percent and per capita GDP fell at the rate of 1.8 percent a year, on average, during the 1970’s, the final decade of the civil war.
While improvements were notable compared to the prior decade, economic growth in the first decade following the end of the civil war remained weak and volatile. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Consequently, per capita GDP grew at a mere 0.5 percent a year during 1992-2003 (Table 1).
The Ethiopian economy, however, registered a remarkable real GDP growth of about 10½ percent and an average per capita growth of 7.6 percent per year during 2004-17.
Consequently, per capita GDP in current US dollar terms increased more than six-fold to about US$865 in 2018.
To put it in perspective, Ethiopia’s real GDP growth during 2004-18 was the second highest in the world; second only to gas-rich Qatar. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
For this reason, Ethiopia’s recent growth performance has been characterized by some as a ‘miracle’.1 Growth was not only high but also stable with a standard deviation of only 1.6 percent, compared to 5 percent during 1992-2003 and 7.2 percent during 1982-93. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Table 1 Ethiopia: GDP Growth (%) Average Standard deviation 1982-91 1992-03 2004-17 1982-91 1992-03 2004-17 Real GDP 1.4 3.7 10.4 7.2 5.0 1.6 Real per capita GDP -1.8 0.5 7.6 7.1 4.7 1.5 Several social indicators compiled from the World Bank’s World Development Indicators database show that Ethiopia’s impressive growth performance has been broadly pro-poor as it was accompanied by significant poverty reduction and improvements in access to education, health, and infrastructure.
Poverty reduction. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Poverty reduction.
In a matter of a decade, the poverty headcount as a percent of the population declined by 15 percentage points from 44.2 percent in 2000 to 23.5 percent in 2015.
This is quite an achievement notwithstanding the fact that a poverty rate of 23.5 percent still remains one of the highest in the world.
According to the World Bank, this was the second highest poverty reduction in 1 Deloitte & Touche (2014).
‘Ethiopia: A Growth Miracle’; Moller, Lars Christian (2015). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
‘Ethiopia’s growth miracle: What will it take to sustain it?’, The World Bank, http://blogs.worldbank.org/africacan/ethiopias-growth-miracle-what-will-it-take-to-sustain-it.
5 Sub-Sharan Africa, next to Uganda.
Each one percent of growth in GDP resulted in a 0.15 percent reduction in poverty.
Education.
Primary and secondary education gross enrolment rates reached 100 percent and 78 percent, respectively, in 2018, from 83 percent and 37 percent a decade earlier. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Similarly, enrollment in undergraduate programs increased from 263 thousand students to 825 thousand students during the same period.
These indicators clearly show a significant improvement in human capital.
Health.
According to the Ethiopian Demographic and Health Survey, the share of births attended by skilled health personnel increased from 5.7 percent in 2005 to 49.8 percent in 2019. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Similarly, the share of pregnant women receiving prenatal care increased from 27.6 percent in 2005 to 74 percent in 2019.
Consequently, health outcome indicators showed significant improvements over the same period.
The under-5 mortality rate fell from 123 (per 1,000 live births) in 2005 to 55 in 2019; maternal mortality rate declined from 673 (per 100,000 live births) in 2005 to 412 in 2016; and more broadly, life expectancy increased by 10 years, to 65 years in 2016.
Infrastructure. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Infrastructure.
Access to infrastructure such as clean water, road, electric power and telecommunication have also improved significantly.
For instance, access to electricity has increased from 14 percent of the population in 2005 to 43 percent in 2016 and access to potable water reached 65.7 percent in 2017, from 36 percent in 2005. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
On the other hand, total length of all-weather roads, excluding Woreda roads, increased from 36,400km in 2005 to 121,196km in FY2017; consequently, average time taken to reach the nearest all-weather road was slashed from 5.7 hours to 1.6 hours during the same period.
Similar investments in railway and air transport led to better transportation infrastructure. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
While still low by international standards, mobile service coverage reached 85 percent and internet data density stood at 17.5 percent in 2017.2 1.2.
Drivers of the economic success Ethiopia’s double-digit growth in the past decade was driven primarily by investment, and to some extent consumption (Figure 1, left panel).
The share of investment to GDP increased from about 25 percent in the early 2000s to a peak of about 38 percent in 2016/17. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Although the National Accounts statistics does not disaggregate investment into private and public, data from fiscal and financial accounts show that a large share of the capital has been accumulated by the public sector.
For instance, economic development expenditure in the general government budget accounted for about 60 percent of total capital expenditure in the past five years. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Sizable investments have also been made by state- 2 With the exception of data on access to electricity, which was obtained from the World Bank’s database, the remaining infrastructure indicators were taken from the 2010 GTP Report (Vol 1) and the 2018 GTP II Progress Report.
6 owned enterprises, outside of the budget, on infrastructure (power, railways, industrial parks, and telecommunication), housing, and commercial activities such as sugar, cement, and fertilizer projects. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Figure 1 Drivers of Economic Growth in Ethiopia Significant investments by the public sector stimulated construction and service sector activities, which were the main drivers of growth on the supply side (Figure 1, right panel).
Despite significant improvements in agricultural productivity, the contribution of agriculture to aggregate value added growth declined, reflecting the biased effects of the public investment on the construction and service sectors. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Similarly, the contribution of manufacturing remained negligible at 5 percent of GDP, indicating that despite the high growth of the past decade, structural transformation to high- productivity sectors has yet to kick-off and accelerate.
The result of a growth accounting exercise also appears to provide evidence that the growth success is primarily a story of capital accumulation, and not yet one of structural transformation from low- productivity to high-productivity sectors (Figure 2). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The contribution of capital accumulation to growth increased fivefold during 2005-17, compared to the decade prior to 2005. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
However, the increase in the contribution of total factor productivity was not overwhelming, in particular considering the potential increase in inefficiency and mismeasurement associated with such a sharp increase in capital, which get reflected in total factor productivity by construction.3 3As a residual in growth accounting, TFP could reflect not only productivity but also measurement errors in National Accounts and inefficiency in the use of factors of production. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
-10 -5 0 5 10 15 20 2012 2013 2014 2015 2016 2017 Investment Government consumption Private consumption Net exports Real GDP Contributions to real GDP Growth -10 -5 0 5 10 15 20 25 Agriculture 1/ Manufacturing 2/ Construction Services 3/ Gross Value Added Contributions to Real Gross Value Added Growth (In percent) 1/Includes agriculture, fishery, hunting, and forestry.
2/Includes manufacturing, mining, and quarrying.
3/Includes all service-related activities. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
3/Includes all service-related activities.
7 Figure 2 Contributions of Factors of Production to Growth (in percent) The investment boom that fueled Ethiopia’s double-digit growth was the result of the government’s deliberate policy to scale up the much-needed investment on human capital and infrastructure.
This investment was financed through mobilization of domestic savings, directing domestic credit to public sector projects and priority sectors, and external borrowing. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
• Mobilization of domestic savings.
Gross domestic savings was successfully raised from 9.5 percent of GDP to 24.3 percent during 2004-2018 through significant branch expansions by commercial banks and targeted government initiatives such as mandating pension contributions for non- government institutions and introducing housing saving schemes to finance low cost government housing. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Despite such an outstanding growth in domestic savings, the saving-investment balance (or the current account balance) remained in deficit as the large investment fueled import growth while failing to stimulate exports.
• Directed lending to public sector projects and priority sectors.
Credits from the Commercial Bank of Ethiopia (CBE) has been primarily directed to finance investment by state-owned enterprises. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The share of total banking system credit held by SOEs increased from a mere 7.6 percent in 2002/03 to 62 percent in 2017/18, before it slows down to 59.4 percent in 2018/19 due to the government’s effort to shift the balance of credit flows to the private sector.
On the other hand, private banks were required to invest 27 percent of their new lending on a 5-year maturity NBE (National Bank of Ethiopia) bill. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
The funds raised through this bill were directed to the Development Bank of Ethiopia (DBE), which lends primarily to priority private sector projects.
The budget has been financed in part through direct advances from the NBE and issuance of Treasury bills, which has been purchased mostly by pension funds.
• External borrowing.
Public sector investment projects also relied heavily on external borrowing, which picked up pace in particular since 2008. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Unlike in the past when the country relied primarily on concessional borrowing, the recent build-up of external borrowing involved commercial loans, including issuance of a historic US$1 billion bond in the international capital markets in 2014.
1.1 5.2 1.7 2.6 1.7 2.1 0.5 0.7 1995-2004 2005-17 Capital TFP Labor Human capital Sources: Estimated based on data from Penn World Tables 9.1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
8 Consequently, the stock of external debt as a share of GDP tripled to about 31.6 percent in 2017/18, from 10 percent a decade earlier.
1.3.
Remaining gaps to reaching a lower-middle income level Notwithstanding the remarkable journey so far, Ethiopia still has a long way to go to achieve the goal of reaching a middle-income level by 2025. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Apart from access to education and health outcome indicators, Ethiopia is still far from reaching the average for lower middle-income level on a number of economic and social indicators (Figure 3).
For instance, even if lower middle income economies do not grow, on average, in per capita income terms, Ethiopia’s per capita income would have to more than double in the next 7 years for Ethiopia to reach 2,219 USD, the average per capita income of lower middle income economies. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Similarly, Ethiopia would have to cut the poverty rate in half to 13.8 percent to reach the current poverty rate of lower middle-income economies by 2025.
The picture is similar, if not worse, in access to electricity, drinking water, and technology services.
It is true that the goal is to reach the minimum, not necessarily the average, for lower middle-income economies. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
However, the threshold for reaching a lower middle income level will also shift over time as this group of economies grow, indicating that reaching a lower middle income level by 2025 will still require doubling the efforts to sustain the achievements of the past decade.
Figure 3 How far does Ethiopia need to go to reach lower middle-income level? | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
31.0 85.4 59.4 87.8 School enrollment, secondary (% net) School enrollment, primary (% net) Access to education 58.5 65.9 48.5 68.0 Mortality rate under-5 (per 1,000 live births) Life expectancy at birth, total (years) Health outcomes 865 2,219 Ethiopia Lower middle income GDP per capita (current US$), 2018 27.3 13.8 Ethiopia Lower middle income Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) 9 44.3 39.1 86.2 85.1 Access to electricity (% of population) People using at least basic drinking water services (% of population) Access to electricity and basic drinking services 42.4 13.9 88.4 26.7 Mobile cellular subscriptions (per 100 people) Individuals using the Internet (% of population) Mobile and internet penetration 10 2. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Headwinds against economic progress The growing macroeconomic imbalances and distortions, which are in large part the unintended consequences of the policies employed to finance public investment in the past decade, make the task of sustaining the achievements of the decade the more challenging. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Efforts to finance ambitious public investment programs through directing domestic financial resources to the public and priority sectors and significant external borrowing coupled with poor project execution have brought to the fore serious macro-imbalances.
Such sub-optimal financing system resulted in large foreign exchange imbalances, high risk of external debt distress, limited access to finance for the private sector, high inflation, and a potential resource misallocation. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Foreign exchange imbalances.
The development model in the past decade has generated greater demand for foreign exchange than supply.
Large-scale public investment projects have absorbed a significant share of scarce forex, while the forex revenue anticipated from the projects didn’t materialize in time.
High demand for imports in the context of limited export growth resulted in large current account deficits and severe forex shortages. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
An overvalued official exchange rate and a growing gap between the parallel and official market rates also discourage exports as the exporters’ cost is likely to be affected by the parallel market rate while their revenue is determined at the official exchange rate (Figure 4, right panel).
Maintaining a stable rate of exchange in the environment of relatively high inflation also means a real exchange rate appreciation, which is equivalent to a tax on exports (Figure 4, left panel).
External debt distress. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
External debt distress.
The country’s ambitious state-led development agenda with its limited tax base created a financing gap that needed to be filled through external borrowing.
Overall public sector debt doubled in the decade prior to 2017/18 to reach 50 percent of GDP. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Within this growing debt burden, external debt escalated rapidly, tripling in a decade to reach 31.6 percent of GDP in 2017/18, before it slows down to 28 percent of GDP in 2018/19 owing to the government’s concerted effort to reduce the debt burden.
Although the level of the external debt is not particularly high, its rapid accumulation in the context of disappointing export performance has created distress in debt service. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
From just 2.5 percent a decade earlier, external debt services significantly increased to 26.6 percent of exports of goods and services in 2018/19.
As a result, the 2018 IMF Article IV report placed the Ethiopian external debt burden at a high risk of distress, undermining the country’s credit standing and limiting the scope for further borrowing in case of critical need.
Debt distress is also strongly tied to export growth.
11 Figure 4 Exchange rates and exports Limited access to finance. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Allocation of credit to public sector projects and priority sectors has also limited the private sector’s access to finance.
Consequently, access to finance is often ranked by business surveys as one of the most problematic constraints to doing business.
In the Doing Business report, Ethiopia ranked 167 out of 189 economies on getting access to credit, much lower than its overall rank of 146 and lower than its structural peers. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Private sector credit stood at 12 percent of GDP in 2018/19 in Ethiopia compared to more than 20 percent in SSA.
It is important to note, however, that the trend has been reversing recently as private sector credit is growing more rapidly than that of public sector credit.
High inflation and resulting distortions.
Inflation averaged 15.4 percent a year during 2005-2018, fueled in part by expansionary fiscal and monetary policies. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Annual inflation accelerated to 16.8 percent in June 2018 against a target of 8 percent.
It has since decelerated to 10.9 percent in January 2019 as monetary policy was tightened.
Such a high rate of inflation has wide-ranging negative consequences to the economy.
It erodes the purchasing power of the population – with severe effects on the poor—from realizing real gains from the country’s economic growth.
High rate of inflation also disincentivizes savings by rendering real interest rates negative. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Finally, a rapid inflation in the context of slow moving nominal exchange rate leads to real exchange rate overvaluation, which in turn erodes the country’s external competitiveness.
Resource misallocation.
As noted previously, the large-scale public investment stimulated construction and service (primarily non-tradable) sectors at the expense of agriculture and manufacturing (tradable) sectors. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
This shifts incentives and factors of production from the tradable (exports and import competing) sectors to non-tradable sectors, with two potential macroeconomic consequences.
First, it reduces incentives for investment in exportable and import-competing agricultural and manufacturing products.
Second, it increases inequality between people engaged in sectors with declining income shares and those engaged in growing sectors. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
According to a 2019 World Bank study, the real consumption expenditure of rural households grew only by less than 1 percent per year during 2011-16, compared to a 6 percent growth per year for urban households. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
In particular, 60 70 80 90 100 110 120 130 Volume of Exports and REER (4Q MA, 2014Q2=100) Volume of exports REER; +ve=appreciation 0 5 10 15 20 25 30 35 60 65 70 75 80 85 90 95 100 105 110 Volume of Exports1/ and Parallel Market Exchange Rate Spread Volume of exports Parallel market spread, rhs Sources: NBE.
1/ 4-quarter MA; 2014Q2=100.
12 the rural poor (bottom 15 percent of the rural population) did not experience real consumption growth during the entire decade (2005-16). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Large scale public projects have also the tendency to suffocate the capacity of public institutions and create opportunities for corruption.
Indeed, most of the high-profile public projects such as hydroelectric dams and sugar factories have proved to be too big for the capacity of the corresponding SOEs and have faced significant delays with increasing project costs. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
On the other hand, business surveys show that perception of corruption has increased and become one of the main obstacles to doing business (Figure 5).
A comparison of the Global Competitiveness Report survey results for 2006/07 and 2017/18 clearly illustrates the achievements and unintended consequences of the public- investment driven growth model over the past decade. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
While easing infrastructure constraints, which improved from being the second most to fifth most ranked problem, the public-investment led growth brought to the fore forex shortages and corruption as the most problematic factors to doing business (Figure 5).
Figure 5 Most problematic factors to doing business Source: Survey of the Global Competitiveness Report, World Economic Forum. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
0 5 10 15 20 Crime and theft Government instability Restrictive labor regulation Tax regulations Policy instability Tax rates Inadequately educated work force Poor work ethic of national labor force Inflation Inadequate supply of infrastructure Inefficient government bureaucracy Access to financing Corruption Foreign currency regulation Global Competitiveness Report, 2017/18 0 5 10 15 20 Crime and theft Inflation Foreign currency regulation Restrictive labor regulation Government instability Inadequately educated work force Tax regulations Tax rates Corruption Poor work ethic of national labor force Policy instability Inefficient government bureaucracy Inadequate supply of infrastructure Access to financing Global Competitiveness Report, 2006/07 13 3. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Problems of continuing with the status quo The public investment led model of the past decades has led to successful economic growth in the past.
However, the financing model has reached its limits, leading to growing macroeconomic vulnerabilities and imbalances that jeopardize the sustainability of growth and stability of the economy.
Given the current macro-economic imbalances, the country cannot mobilize the required resources to continue with its high public investments. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
• Both external and internal financing sources are drying-up unless major macro-imbalances and financial sector vulnerabilities are addressed rapidly.
With a high debt distress risk and limited export growth, the public sector has limited scope for additional borrowing from external creditors.
Domestic banks have faced vulnerabilities due to the sub-optimal financial policies for the past decade. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
• The prevailing forex imbalances and overvalued real exchange rate could continue to suppress exports and official remittances.
• The double-digit inflation effectively hinders the financing of a large share of the budget through direct advances from the NBE.
In this context, trying to achieve and sustain the GTP II growth target of about 11 percent through the financing models of the past decade has become neither feasible nor desirable. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Achieving real GDP growth rate of 11 percent over the coming years requires mobilizing significant external financing to pay for the needed imports.
This would not be feasible as external lenders would unlikely be willing to finance the status quo.
Even if the external financing was to be secured, continuing with the demand-driven growth model of the past decade would not be desirable due to heightened internal and external imbalances. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Without sufficient supply response, additional external borrowing would aggravate the external imbalances and heighten the external debt distress.
Internally, high inflation will further undermine the purchasing power of the middle class and the poor and erode public confidence on the stability of the monetary system. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
After investing so much on infrastructure and human capital, with notable achievements, it is time for the government to slow down its investment and leverage its past achievements for private sector development.
It is only through private sector-led growth that the government would be able to reap the dividends of its past investment, both in terms of generating fiscal resources to service its debt and creating job opportunities for the rapidly growing population.
14 4. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
14 4.
Rebalancing and sustaining growth through a homegrown economic reform program Sustaining economic growth, creating job opportunities for the growing population and setting the foundation for prosperity for all requires correcting macroeconomic imbalances and rebalancing the sources of growth; from demand-driven to supply-driven, from debt financing to saving and equity financing, and from public sector-led to private sector-led.
4.1. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Reform Objectives • Ensure macro-economic stability to sustain the rapid economic growth • Rebalance the public and private sectors’ role in the economy • Unlock new and existing growth potentials This in turn requires launching a comprehensive and well-coordinated economic reform agenda, encompassing (Figure 6): • macro-financial measures to stabilize the macroeconomy and arrest financial sector vulnerabilities; • structural reforms to alleviate business constraints to create an enabling environment for private sector investment; and • sectoral policies to address sector-specific institutional and market failures and enhance productivity in key economic sectors. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Figure 6 Pillars of the economic reform program Macroeconomic reforms Price stability Financial stability and availability Debt sustainability Structural reforms Sectoral reforms Ease business constraints and improve efficiency Address institutional and market failures Rebalance growth and enhance productivity Build confidence Investment, Jobs, and Growth 15 The reform agenda builds on various macro-financial reforms launched in the past year. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Most notable among the already launched reforms include (i) lifting the limit on diaspora foreign currency accounts, (ii) adjusting the exchange rate at which commercial banks surrender forex to the NBE, (iii) raising the interest rate on NBE bills from 3 percent to 5 percent, (iv) allowing foreign exchange transactions in industrial parks, (v) reducing the budget deficit from 3 percent in 2016/17 to 2½ percent in 2018/19, (vi) adjusting electricity and fuel prices towards cost reflective levels to reduce fiscal burden, (vii) reprofiling external debt to lessen the burden of immediate debt service obligations, (viii) implementing doing business reforms to reduce red tape and bureaucracy, (ix) efforts to open the logistic and telecommunication sectors to domestic and foreign investors and fully and partially privatize SOEs; and (x) ratifying CFTA and resuming WTO accession to improve access to foreign markets and support exports. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
These macro-financial reforms are steps in the right direction, yet are insufficient to address macroeconomic imbalances and ensure sustainable growth.
The current reform program augments these macro-financial measures by adding depth and breadth.
The macro-financial reforms are complemented with broad structural and sectoral reforms to unleash the potential of the private sector in sectors such as agriculture, manufacturing, mining, tourism, and ICT. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
These structural and sectoral reforms will enhance the productivity growth and job creation.
4.2.
Macro-financial reforms Macro-financial stability and availability of finance (both local and foreign currencies) are the foundations for economic growth and job creation. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |
Stable monetary and financial systems allow savers to deposit their financial assets in the financial system with confidence, provide investors the predictability and finance they need to invest in long-term projects, and enable consumers to smooth their income and consumption intertemporally. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/rr/1726050226258.pdf | https://faolex.fao.org/docs/pdf/eth211967.pdf |