Tekie Alemu (PhD) – Ethiopian Business Review

Ethiopia has been grappling with a severe foreign exchange shortage for many years, fueling a thriving black market. The government’s frequent response – a crackdown on illegal currency trade – has solved the problem.

In this commentary reprinted from 7th Year • Nov.16 – Dec.15 2018 • No. 68 of EBR, Tekie Alemu (PhD), a retired associate professor of economics at Addis Ababa University, provided an in-depth analysis into the heart of the problem, exploring the intricate dynamics of supply and demand in Ethiopia’s foreign exchange market. From the role of the diaspora to the pitfalls of government intervention, the article offers a fresh perspective on this pressing economic issue. The assistant professor explains how a legalised foreign exchange market could inject efficiency and transparency into the system while empowering commercial banks to focus on their core competencies.

– in retrospect from EBR 68 published from 7th Year. November 2018.

In Ethiopia, shortages in the availability of foreign exchange, also known as a foreign exchange crunch, has beenone of the pressing economic agendas for quite some time, and has lead to heated discussions. In response to the prevailing shortages, the government has recently taken some measures that aim to ameliorate the problem. Two actions standout in this regard: a fast crackdown on black market operators, and controlling the foreign currency that exits through Bole International Airport and boarder areas. As a result, confiscation of large amounts of foreign currencies (at least from the perspective of individual stances) continues to be reported.

Legalizing the Black Market Solves Ethiopia’s Foreign Exchange Woes

Legalizing the Black Market to Solve the Forex Shortage