Macroeconomic reform Key to sustainable growth through increased private sector participation

Addis Ababa, December 23, 2024 (FMC) – The Development Bank of Ethiopia (DBE) has commended the macroeconomic reform as crucial for achieving sustainable economic growth through increased private sector participation.

President of DBE, Emebet Melese emphasized that the macroeconomic reform is crucial for achieving sustainable economic growth in Ethiopia by enhancing the participation of private sectors.

Since July 2024, Ethiopia has been implementing comprehensive macroeconomic reforms aimed at creating a solid foundation for private sector involvement, economic growth, and job creation.

In just the past three months, Ethiopia’s manufacturing industries have generated an impressive 816 million USD in production capacity, demonstrating their potential after overcoming previous challenges.

The President also emphasized that the reforms would enable the foreign exchange rate to be determined by the market, allowing Ethiopian banks to operate independently, as ENA reported.

Previously, the difficulty in accessing foreign currency had limited the growth of the private sector. However, these issues have been addressed with the implementation of macroeconomic reforms, she noted.

As a result, the reforms are expected to steer the country toward sustainable economic development by boosting private sector participation.

By alleviating the foreign currency shortage faced by the private sector, the reforms have facilitated the creation of a more competitive private industry within the country.

She further highlighted that the DBE has allocated 99 percent of its loans to the private sector, underscoring the bank’s role in supporting national economic policy.

As a policy-driven institution, the Development Bank has also established a revenue-generating framework to bolster its income, she added. The reform allows private industries to freely utilize their foreign currency resources and leverage the country’s wealth more effectively, she said.

Emebet finally stressed the importance of the comprehensive macroeconomic reforms in efficiently utilizing the country’s resources to foster economic growth and encourage greater private sector participation.