Ethiopia must work harder to attract investment, reformist PM says

ADDIS ABABA (Reuters) – Prime Minister Abiy Ahmed said on Friday, he is pushing a fundamental overhaul of how the nation is run.

With a budget that has become more and more important, it has become more and more important than expected. far short of targets.

"We need to work (so that) investors have full confidence in the country," he said, adding that the government must be more efficient and prudent in its spending.

Parliament eventually pbaded a 346.9 billion Ethiopian birr ($ 12.71 billion) budget for 2018/19, marking a spending contraction in dollar terms from last year.

Eritrea, a state of emergency and a promise to the government-dominated economy partially by attracting foreign capital to the state telecom company and airline. The 41-year-old has also criticized security forces for brutality.

On Friday, he said that the effort to boost earnings is now falling. "We are earning the lowest in the region," he said of exports from the sector.

The budget forecasts the economy will grow 11 percent in the fiscal year beginning this month.

The growth of the economy is about 10 percent for the past decade – badysts say the economy is heavily discounted by the dollar.

Abiy has said foreign exchange shortages would last for years.

The government devalued the birr last year but economists say it is still overvalued by as much as 25 percent and that dollar shortages can deter investment.

"said Charlie Robertson, global chief economist at Renaissance," They can try to square the circle by advancing this privatization process and attracting in foreign capital that way they will get a lower price for those badets if there are sharp dollar shortages. Capital.

SHAKE UP

Despite Abiy's desire for change, the budget does not matter. Parliament approved modest increases in defense and security spending.

Abiy aims to shake up the country after the security-obsessed rule of his predecessors. However, his efforts are attracting opposition from hardliners in the People's Liberation Front Tigrayan, which has dominated the EPRDF ruling coalition – and the country and economy – for nearly three decades.

Two people were killed in a grenade blast at a pro-Abiy rally in Addis Ababa last month, with blame pointed to those opposed to reform.

Faced with a current account deficit estimated by the International Monetary Fund at $ 5- $ 6 billion, Abiy said the government needs $ 7.5 billion to complete dam, road and rail projects. The budget made no allocations for new projects.

The government will seek $ 1.2 billion in concessional foreign loans this year, up slightly from last year. No plans for borrowing from external markets were mentioned.

The yield on the nation's only Eurobond, issued in 2014, hit at 15-month high of 7.59 percent in June, before it responded positively to Abiy's peace overtures.