Ethiopian economy surpass $100B; Prime Minister Abiy Ahmed

• Ethiopia’s economy grew 6.1% in 2019/20 fiscal year – PM
• Nation Secures More Than U.S.$832m From Export Trade in 1st Quarter the current physical year
• New park in Ethiopia creates 10,000 jobs

Ethiopia’s economy grew 6.1% in the 2019/20 fiscal year to July, less than originally projected because of the impact of the coronavirus pandemic, Prime Minister Abiy Ahmed said on Monday.

In January, two months before Ethiopia’s first reported case of the new coronavirus, the central bank had forecast the economy would expand by 10.8% this fiscal year, up from 9% in the previous year.

“For eight months we registered a healthy economic growth but after that, then coronavirus came and for the remaining four months we faced challenges,” Abiy told lawmakers.

Under Ethiopia’s demonitisation process launched last month, at least 1.3 million Ethiopian adults who previously did not have bank accounts have handed in their old banknotes and opened accounts, Abiy said.

Abiy took office in 2018 and promised sweeping economic reforms. Some changes are beginning to be implemented.

The government says demonetisation will discourage cash hoarding which facilitates corruption, tax avoidance and other damage to the economy.

“This is a success in terms of bringing many people to banks,” he added. Just over one third of Ethiopian adults had a bank account in 2017, according to the World Bank. This compares to more than 80% of adults in neighbouring Kenya, for example.

On Sept. 14, Abiy announced a three-month window for people to deposit old notes and said that in return, they will be given a bank account to withdraw the new notes from.

During his speech, Abiy also said Ethiopia’s Gross Domestic Product had reached $107.4 billion during the last budget year that ended July 7.

“It is the first time ever that Ethiopia managed to go beyond the $100 billion threshold in GDP,” he said.

He added that the country also achieved economic growth of 6.1 % despite the novel coronavirus pandemic. Agriculture was the major contributor to the growth performance, he added.

He also said the government had received requests for 20 new commercial banks seeking approval to set up. At present Ethiopia has 19 banks. Its banking sector is closed to foreign investment and is still one of the most tightly state-controlled in Africa.

Meanwhile, Abiy Ahmed admonished some of the lawmakers for criticizing the opening of Entoto Park in Addis Ababa, as well as other parks like it, while the East African country grappled with security issued.

“The park will greatly boost both the country’s image and, together with other schemes, its incomes too,” he said, adding that he had personally raised funds for its construction.

Abiy said the multi-purpose park would contain indoor and outdoor facilities built mostly with local materials, including centers for physical activities, a library, restaurants and coffee shops, fountains, walkways and bicycle and scooter lanes.

He underlined that the park would serve as a major tourist attraction in Addis Ababa. “We can build 30 to 40 such parks in the city of Addis Ababa alone.”

China, he said, fully financed another park’s construction, called the Sheger project, situated in the heart of Addis Ababa and was inaugurated last month.

“You [parliament] have not given me a single birr [Ethiopian currency] for the park projects and you cannot call me to account for them,” Abiy told members of the House of People’s Representatives.

Prime Minister Abiy Ahmed said the nation has secured 832.3 million USD from the export trade during the first quarter of Ethiopian fiscal year that begun on July 9. The stated amount of export revenue has shown an increase of 15 percent compared to last year’s same period which was 723 million USD.

Ethiopia has 89,137 confirmed COVID-19 cases, with 1,352 deaths and 42,649 recoveries, according to its health ministry data. (Reporting by Dawit Endeshaw; Writing by George Obulutsa; Editing by Maggie Fick and Raissa Kasolowsky)

Source Reuters, Anadolu Agency