ASHENAFI ANIMUT — The government has been formulating viable policies that prioritize the private sector's economic engagement and pave the way for a competitive business environment, a noted economic expert said.
Global Chairman of Fairfax Africa Fund Zemedeneh Negatu told the Ethiopian Press Agency (EPA) that the country is carrying out policy shifts to break up the monopolistic business model to competitive approach and to materialize economic stability.
The formulation of a viable policy framework is also a significant milestone that has played a huge role in Ethiopia's economic transformation and building a vibrant private sector.
Zemedeneh, an economist by profession, further noted that the country has untapped investment opportunities in agriculture, technology, infrastructure and other priority sectors that could lure the attention of foreign companies.
Commending the government's commitment to maximize the economic role of the private sector, he underscored that financial policy change is also critical to reverse the old model of easy money-profit making to a value added economic model. "Ethiopia has an untapped productive market potential, growing local market and affordable labor cost to attract private investment in the manufacturing industry."
Citing various countries' development experiences as benchmark, the economist stressed the need to strengthen the Public- Private-Partnership scheme as a key to enhance the product and productivity of the manufacturing sector and help it to grow from the current early stage of development.
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"Ethiopia also requires a well-articulated education system and industrialization and infrastructure are also the hugely-contributing factors for a stabilized macroeconomic environment, to arrest the soaring inflations and help foreign investors to make the right decision.
According to Zemedeneh, the government is taking bold steps with various initiatives including the 'Let Ethiopia produce' movement in a bid to attract foreign investors' involvement in Ethiopia's economy and pave the way for private sector development, promote import substitution and foreign exchange earnings.
In the same vein, the National Bank of Ethiopia is also working tirelessly to ensure macroeconomic stability and to bring down inflation and promote access to foreign exchange.
The allocation of 80 percent of financial loans for private businesses demonstrated the government's priority for the private sector development. "Here, it is also highly required to encompass national champions in the manufacturing sector as part of the government strategy."
Furthermore, the emerging capital market and stock exchange would also be critical for the private sector to get adequate financing securities and financing, the economist emphasized.
According to information obtained from the IMF, Ethiopia has the fifth largest GDP in Africa and third among sub-Saharan African countries.
He attributed Ethiopia's remarkable GDP growth to the government's immense engagement to widen the economic space for the private sector's engagement and create the playfields for a stable macroeconomic environment.
