Economists understand the exchange rate of currencies just as they understand the price of any other commodities. In the foreign exchange market, the goods that are traded are currencies and their prices are the exchange rates. This means, just as with the price of any good or service, the exchange rate is primarily determined by demand and supply.
During the recent discussion Prime Minister Abiy Ahmed (PhD) held with the business community in Addis Ababa, one of the major issues raised by the representatives of the private sector was the shortage of foreign currency that has seriously affected their businesses as well as the entire nation. As part of the response, the Prime Minister asked the business leaders to bring back the hard currency they have in foreign banks in Dubai. He said Ethiopian businesses have lots of money deposited in foreign currency in Dubai and Chinese banks. Although asking the businesses to bring back the scarce foreign currency is a right thing to do as part of a short term solution, it is essential to see what factors the businesses to put their money in foreign countries.
Corruption is a pervasive and very complex global phenomenon. The practice is as old as humanity itself. Although the magnitude and effect varies across history and geography, it affects all nations indiscriminately. With a view to curbing corruption, the UN and other international organizations have devised national anti-corruption strategies including the UN Anti-Corruption Convention. There are also international institutions that measure countries’ level of corruption. The most commonly cited corruption index is Transparency International’s Corruption Perception Index (CPI) which ranks the perception of corruption of public bodies using pre-determined criteria. According to the 2018 Annual CPI, Ethiopia is ranked 107 out of 180 countries. Ethiopia is considered among the most corrupt countries in the world.
Taddese Roba
Abebe Asamere
Mekonnen Fisseha