Ethiopia’s Financial Liberalization Would Bolster Industrial Growth: Economist

Addis Ababa: The market-based exchange regime and opening up of the banking industry to foreign banks will immensely contribute to the growth of the industry sector, Economist and policy advisor Costantinos Berhutesfa said.Ethiopia has undertaken significant economic reforms to open up the economy, including the liberalization of the telecom sector, opening up of the financial sector, the liberalization of trade and the logistics sector for foreign investors, among others.Similarly, the country has given special attention to the manufacturing industry under the Home-grown Economic Reform and the 10-year Perspective Development Plan that have been contributing to the overall improvement of the sector recently.Approached by ENA, Economist and policy advisor Costantinos Berhutesfa noted that manufacturing requires huge capital as the entry of foreign banks are anticipated to bring about substantial finance.The liberalization of monetary policy in terms of the interest rate and exchange rate is going to c ontribute as main pillars for investment in the industrial sector, he pointed out.Recall that the government of Ethiopia has already embarked on full implementation of macroeconomic reform policy which introduces a competitive, market-based foreign exchange rate regime.Ethiopia marks this transformative moment in its economic journey to becoming among Africa's most vibrant, open, and competitive economies, it was learned.For Costantinos, alongside opening up the banking sector for foreign investors and the reform of the exchange rate, the special economic zones which have special administration will facilitate the investors coming in and play a fundamental role for boosting the manufacturing sector.Following its ambition in the industrial sector, Ethiopia is also working to transform the industrial parks into dynamic economic zones by incorporating additional services in the coming 5 to 10 years.Transforming the industrial parks into special economic zones will make them centers of urbanization by i ncorporating trade, manufacturing, and logistics, it was indicated.Costantinos further revealed that the special economic zones are going to attract a lot of FDI flow alongside the foreign banks that are coming up with their capital, he said, adding that FDI will be much easier.Once you have the capital outlet coming in through foreign banks, and capital markets then what will happen is processing for export, he affirmed.Over the past five years, more than 60 sectors and sub-sectors have been opened up for domestic and foreign investment to make Ethiopia a business friendly nation.The country has also implemented over 80 legal and administrative reforms during the stated period, it was learned.Source: Ethiopian News Agency