Friday, July 19, 2024
PoliticsPM remains defiant over foreign debt stress

PM remains defiant over foreign debt stress

Plans to add three mln new jobs

The House of People’s Representatives (HPR) ended its fourth year of the current parliamentary term by endorsing the proposed federal government’s budget worth 386,954,965,289 birr (over USD 13.8 billion) for the fiscal year 2012 E.C (2019/20 GC).

However, despite the growing concerns from various sides, the Prime Minister insisted that the country is not in a dangerous situation regarding the accumulation of external debts amounting to USD 27 billion.

In the same session, the House has also heard the House Speaker’s report before MPs went on a three-month long recess.

Accordingly, the House has approved unanimously over 386.954 billion Birr for the upcoming Ethiopian fiscal year. This year’s budget was raised by 12 percent than the preceding year amounting to 40 billion birr.

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Based on the endorsed budget, over 109.468 billion Birr is allocated for regular budget, while more than 130.710 billion Birr will be used for capital disbursement.

More than 140.775 billion Birr will be used to subsidize regional states, and some six billion Birr will go to the execution of Sustainable Development Goals (SDGs).

In the morning session of the final day, PM Abiy who appeared before MPs for the second time in one week, addressed queries raised by MPs mainly related to issues incorporated in the draft annual federal government budget.

During his appearance, the PM highlighted the objectives and targets of the proposed draft budget with its ultimate focus on economic measures, addressing the surging inflation as well as creating youth–centered employment opportunities.

The PM addressed the specific questions raised by MPs regarding the country’s external debt. In his reaction, PM Abiy told the House that “a new borrowing scheme, which shifted from commercial to concessional loans, has brought opportunities that helped the country emerge from an economic crisis.”

He further went on to explain that by correcting the approach to external borrowing, the country has already changed 47 percent of the commercial loan into concessional loan from China alone.

 “This is a big step that should be counted as a great achievement,” he told the legislators.

“Because of this successful debt restructuring negotiation that we have had during the previous fiscal year, we have saved around USD 400 million, which was expected to be paid every year.”

Abiy stated that the external accumulated debt has reached 30 percent. He, however, argued that the sated debt accumulation “is very little, even when compared to developed countries that are 100 percent in debt.”

In the meantime, he confessed that the country’s export performance has, however, become a challenge to repay its loan in a given time. As a result, the country has prioritized on the productive sector in order to stimulate the export sector.

The low export annual performance, which amounted to USD 2.1 billion, has created hard currency shortages. Similarly, he also indicated that the country’s current foreign exchange reserve has increased by USD 1 billion compared to the preceding year.

Besides that, the PM was also speaking on the country’s pressing challenges in connection with the outstanding concerns of unemployment in the country.

He announced that a plan is already set for the upcoming fiscal year to create around three million jobs in a bid to address the critical problem of unemployment.

He further underlined that considerable size of funds will be allotted for agriculture mining projects and related sectors which are able to generate more employment opportunities. He pledged his government’s commitment to handle unemployment rate through holistic approach which includes a plan to aggressively enhance the investments on agriculture, energy, and mining and attracting more FDI (Foreign Direct Investment), which he underlined “Would help reduce unemployment.”

The overall unemployment rate in Ethiopia has reached 11 million, PM Abiy disclosed, adding his government is foreseeing to create three million new jobs next year to curtail the increasing trend.

As part of the holistic approach, the government plans to send some people overseas, particularly to the Middle East. He pointed out that Ethiopia has recently reached an agreement with the government of United Arab Emirates (UAE) to dispatch some 50,000 Ethiopian professionals to Dubai next year.

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