By William Davison
Oct. 2 (Bloomberg) — Ethiopia’s growth will slow to 6.5 percent this year and over the “medium term” unless there’s more private-sector involvement in infrastructure projects, the International Monetary Fund said.
Economic performance was “mixed” in the 12 months to July 7, with “strong, broad-based growth” of 7 percent, the IMF said in an e-mailed statement yesterday. Inflation averaged 33 percent in the same period, according to the statement.
Growth will be 6.5 percent in the medium term without an “increased role of the private sector to leverage the large public infrastructure investment, and efforts to improve the doing business conditions,” the IMF said in the statement.
Africa’s second-most populous nation encourages foreign investment while the state dominates or monopolizes industries such as telecommunications, banking and power generation. The government this fiscal year will invest 144 billion birr ($8billion), or about 16 percent of gross domestic product, in industrial development, transport, telecommunications, energy and housing, according to a five-year growth plan.
“With several large projects expected to be financed either fully or partially from domestic sources, we have cautioned against crowding out of the private sector, which will slow down growth,” the IMF’s representative in Ethiopia, Jan Mikkelsen, said in a Sept. 17 e-mail.
Growth in the Horn of Africa nation averaged 10.1 percent for the last nine years and about 7.5 percent over the last three years, he said in a Sept. 18 e-mail.
A reduction in central bank lending to the government has helped slow inflation, which the IMF expects to average 14.4 percent in the 12 months through July 7, 2013, Mikkelsen said.
“Closer scrutiny” is needed of the state-owned Commercial Bank of Ethiopia’s exposure to public enterprises and its growing market share as the country’s biggest bank, as well as the “adverse impact” of a requirement for other banks to buy
central bank securities, the IMF said.
Ethiopia Growth to Slow Unless Private Sector Boosted, IMF Says
Latest from Blog

IMF Leader to Travel to Ethiopia Amidst Economic Turmoil
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, is scheduled to visit Ethiopia on February 8 and 9 as the nation progresses with its comprehensive economic reforms. Ethiopia, home

A plea to Eskinder Nega
By Allelign Sisay I recall one of your interviews about the Judgment of Solomon (1 Kings 3:16-28). In it, you urged Ethiopians to act in the spirit of the wise king and

Unpacking BABY KING Abiy Ahmed’s Claims on Jimma Homes: Insight or Illusion?
In this article, we endeavor to unravel the narrative spun by Ethiopian Prime Minister, Abiy Ahmed, around the destruction of an estimated 15,000 homes in Jimma. His startling assertion that the affected

Why Have Jawar’s and Lidetu’s Non-Violent Movements Failed to Get Traction?
Yonas Biru, PhD Lidetu has been in Ethiopian politics for over three decades. Jawar’s political ንክኪ is a tad shorter. In total, he has a quarter of a century worth political stripes

Abiy’s Idiocy: How One Man’s Stupidity Crippled a Country
(THE HABESHA) – This article offers a comprehensive analysis on the leadership style and decisions of Abiy Ahmed, the current Prime Minister of Ethiopia. Renowned on the global stage, Abiy Ahmed has

Breaking the Chains of Tribalism
Dula Abdu Mohamud A. Ahmed (Prof.) as an individual or an organization promoting Sustainable programs through the OWS Development Fund, located in the Somali region of Ethiopia suggests that ethnic federalism

Minority Faction Negotiations Ignite Widespread Outrage Among Amharas
(The Habesha) –Controversial negotiations have been triggered between minority factions of the Amhara Fano forces and representatives from the EU, AU, USA and IGAD, sparking fierce unrest among the Ethnic Amhara community

Ethiopia Urges King Charles to Return Looted Sacred Artifacts from 150 Years Ago
By OLIVIA ALLHUSEN / Daily Mail Ethiopia has formally requested that King Charles and the British Army return artefacts deemed ‘sacred’ that were taken during a conflict 150 years ago. These significant items

The Leaders of Fano Groups at the Heart of Amhara Operations
(The Habesha) – In the vast political landscape of the Amhara Region, the role and influence of Fano groups continue to generate interest and discussion. Who leads these compelling collective forces? What

The Development Strategies of Singapore vs. Ethiopia: A Comparative Analysis of Education and Beautification
Dr. MeKonnen Birru (birrum@uhd.edu) Over the past few decades, Singapore and Ethiopia have pursued distinct paths to development. While Singapore’s transformation into a global economic powerhouse is often attributed to its focus

FANO Leader Zemene Kasie Denies Engagement in Government Negotiations
(THE HABESHA) – In the ever-shifting landscape of power struggle and negotiations, FANO Zemene Kasie stands as a steadfast bulwark, maintaining their stance of not yet engaging in dialogue with any government

Why Both Ethiopia-Centered and Tribe-Based Change Agendas Continue to Fail
Yonas Biru, PhD (unedited draft for discussion) A caveat is in order at the outset. The article focuses on Oromo, Amhara and Tigray extremist forces and their conflict-brewing sidekicks in the diaspora.

Statement on current developments by the Amhara Fano People’s Organaization (AFPO)
The Amhara Fano People’s Organization (AFPO) proudly represents the armed resistance of the Amhara people a movement born out of necessity in the face of systemic Genocide, state-sponsored violence, and deliberate political

Eskinder Nega: A Portrait of Two Faces – Freedom Fighter and Divider
Dr. MeKonnen Birru (birrum@uhd.edu) Eskinder Nega, a name synonymous with the struggle for democracy and freedom in Ethiopia, is a man of undeniable courage, but also one of stark contradictions. Known for

The Legacy of Professor Getachew Haile: A Tribute to an Extraordinary Scholar
(The Habesha) – In the world of academia, few individuals made as indelible a marked as Professor Getachew Haile. The famed scholar, celebrated for his profound researched and deep expertise, was a