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Ethiopia’s economy poised for 7.9% growth in current fiscal year, reports Minister Fitsum Assefa

Fitsum Assefa, minister of planning and development (Photo: MoPD)

Addis Ababa – Ethiopia’s economy is on track for robust 7.9% growth in the current fiscal year, according to Minister of Planning and Development Fitsum Assefa.

Highlighting the nation’s progress during a press briefing yesterday, Fitsum outlined significant achievements across agriculture, industry, and the service sector.

According to the minister, the nation has achieved a substantial increase in agricultural productivity over the last nine months, with an additional harvest of 100 million quintals of major crops relative to the same period in the previous fiscal year.

Particularly in wheat cultivation, Ethiopia cultivated wheat on four million hectares of land in the previous dry and belg (minor) seasons. The size of the land under cultivation increased to 6.5 million hectares this fiscal year, which she indicated resulted in a yield of over 80 million quintals of wheat.

Additionally, rice production saw a dramatic increase, soaring from eight million quintals to 38 million quintals during the same period, according to the minister.

The industry sector also demonstrated notable improvements, as indicated by Fitsum.

The average capacity utilization of manufacturing industries climbed to 56% this year, up from less than 50% in the preceding year, which she said “signals a resurgence in industrial productivity.”

Contrary to official assertions, a recent publication by Addis Standard sheds light on the challenges faced by owners of major industries, notably concerning deficits in foreign exchange, financial resources and raw material shortage.

Solomon Mulegeta, the general manager of the Ethiopian Association of Basic Metals and Engineering Industries, told Addis Standard that a considerable segment of metal industries are operating at a capacity of less than 40% of their potential.

The service sector, particularly the digital economy, has experienced significant progress over the past nine months. “Digital transactions have increased by an additional four trillion birr this year compared to the previous year,” Minister Fitsum reported.

According to the minister, the country’s capacity to generate foreign currency has also shown improvement.

In the past nine months of the current fiscal year, merchandise exports brought in $2.5 billion, service exports contributed $5.8 billion, foreign direct investment (FDI) accounted for $2.8 billion, and remittances totaled $3.5 billion.

Except for merchandise exports, Fitsum disclosed that service exports increased by 7.3%, remittances by 7.4%, and FDI by 4% during the period.

These achievements, according to Minister Fitsum, are strong indicators that Ethiopia is positioned for a 7.9% economic expansion in the current fiscal year.

Despite the optimism expressed by officials, the economic growth forecasts by the International Monetary Fund (IMF) paint a more moderate picture for Ethiopia.

As outlined in the IMF’s economic projections released in November 2023, Ethiopia is anticipated to achieve a real gross domestic product (GDP) growth rate of 6.1% by the conclusion of 2023, with a further growth rate of 6.2% predicted for 2024. AS

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