Alemayehu Geda (Prof.)Alemayehu Geda (Prof.)October 28, 2019


In my commentary published on EBR last month I showed that the experiences of many countries indicate privatization does not automatically improve performance; the 1998 scandal involving the Uganda Commercial Bank is a case in point. Moreover, the World Bank’s experience of financial reform in the former Soviet Union drew the conclusion that early privatization does little to improve the quality of the banking system and may be counterproductive when institutions are weak and prudential regulation is underdeveloped. Therefore, it is by no means self- evident that Ethiopia should follow Mozambique’s example of privatizing state banks early in the transition stage.

Alemayehu Geda (Prof.)Alemayehu Geda (Prof.)September 15, 2018


It is an Africa-wide fact that the policies of the World Bank (WB) and the International Monetary Fund (IMF) such as structural adjustment programs (SAPs) through what is called the “Washington consensus”, which includes privatization across Africa, have been the cause of African stagnation and poverty so far. Apart from liberalization, which includes devaluation and related macroeconomic policies, privatization was one of the key policies that Africans need to undertake in order to get aid from the WB and IMF and through their seal of approval from the Western countries.

The 1997 Asian Financial Crisis vs. Ethiopia’s Foreign Exchange Problem

The 1997 financial crisis in Asia occurred after several decades of outstanding economic performance. Annual gross domestic product (GDP) growth in the ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) averaged close to eight percent over the decade before 1997. This is similar to the official growth rate registered by Ethiopia in the past decade.

Prime Minister Abiy Ahmed’s Economic and Political Challenges

In my commentary published in EBR issue 55 entitled “Stand Still and Movement” I expressed my grave concerns about the future of our nation. The coming to power of the new Prime Minister, Abiy Ahmed is a relief for such concerns, at least for now. Abiy is the right pick in all senses of the word to be at the helm of power (as that happens to be the criteria at this juncture in our history). However, for all the peace that he has brought about to be sustainable, it is imperative to understand the major political and economic challenges that he in general, and we as citizens in particular, will be confronting. I will begin to highlight the top five economic challenges first and conclude by briefly noting two major political challenges that are preconditions for addressing the economic challenges.

Alemayehu Geda (Prof.)Alemayehu Geda (Prof.)November 1, 2017


 In July 2014, in its Ethio¬pia Economic Update entitled ‘Strengthening Export Perfor-mance through Improved Com¬petitiveness’ the World Bank advised the Ethiopian government to devalue its currency to speed up the growth of exports. Empirical evidence presented in this report suggests that a 10Pct lower real exchange rate could increase export growth in Ethiopia by more than five percentage points per year and increase eco¬nomic growth by more than two percentage points.

Alemayehu Geda (Prof.)Alemayehu Geda (Prof.)October 15, 2015

Major issues to consider

One of the greatest achievements of Prime Minister Abiy Ahmed (PhD) in his short stay in power is bringing peace between Ethiopia and Eritrea, which is an excellent political and diplomatic success. This is also a smart political move on his part to fight established interest groups who could stand against his reform. His visits to Egypt, the UAE and Saudi is also a predictable political underpinning for the success.


Recent media outlets in Ethiopia and beyond are talking about the possibility of an oil discovery in Ethiopia; the populace is following the story with great interest. As a child it was always my wish for Ethiopia to get oil – perhaps disgusted by the rampant poverty that I witnessed. Now, I think twice about it and tend to think maybe it is not a nice thing after all.  Why? Here is my perspective!


Africa’s share of the global Foreign Direct Investment (FDI) flow is extremely low. Despite the fact that it evolved from an annual inflow of USD two billion in 1983-1987 to USD 55 billion in 2011, it represented a mere four pct of the global FDI and about 10 pct of FDI flow to the developing countries in 2010-2011. There is also a significant variation across regions and countries in Africa. Nigeria, Egypt, Morocco, Tunisia, South Africa, Algeria, Angola, Ghana and Cote d’Ivoire, accounting for a hefty two thirds of the FDI flow to Africa.



Recent economic development in Africa witnessed impressive economic growth on the continent, averaging above five percent per annum over the last five years. This growth is primarily propelled by accelerating natural resources exports. This places much of the future of Africa’s economic rebound in the fate of mineral rich economies. That may be something of a worry for the sustainability of Africa’s recent growth and economic transformation in the continent.

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