Addis Abeba — At the opening of Ethiopia's parliament on 9th October 2017, Ethiopia's President, Dr. Mulatu Teshome, stated that earning foreign exchange was has become a matter of life and death for Ethiopia. Apparently he was hinting that devaluation of the birr was about to take place. Sure enough, devaluation happened - a day later. The National Bank of Ethiopia (NBE) announced its decision to depreciate the value of the birr by 15% with immediate effect. This sequence of events clearly indicated that Ethiopia is in desperate need of hard currency. It sounds the authorities are panicking because the country's foreign exchange reserve has been rapidly depleting.
Ethiopia's decision to devalue the birr brings to mind Albert Einstein's definition of insanity: doing the same thing over and over again and expecting a different outcome. I thought the EPRDF regime has done it more than enough number of times to know that the country would not achieve any economic gain by devaluing the currency. It was time the authorities do something else to address Ethiopia's economic malaise.
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