Since October 2017, the National Bank of Ethiopia (NBE) made a series of monetary policy adjustments such as devaluating the local currency, increasing the interest rate, and introducing a credit ceiling on commercial banks in an attempt to sustain the economic growth achieved in the last decade. However, the policy alterations have had mixed outcomes. Investors, especially those engaged in the service sector, complain about the lack of available credit, which they say worsened after the NBE made the policy changes. On the other hand, the banking industry continues to perform better despite challenges. EBR’s Samson Berhane investigates the different impacts of the monetary policy implemented in recent months.

In the first six months of the current fiscal year, the Ethiopian Revenue and Customs Authority (ERCA) collected ETB90.8 billion, which is 83Pct of the target set for the period and 39.5Pct of the target set for the current fiscal year. Officials stress that a growing number of taxpayers are declaring losses or no income on their annual income tax report and Value Added Tax (VAT) refund. Businesses argue that this is due to the slowdown of economic activities attributable to the scarcity of foreign currency, and recent political unrest in the country. Several companies claim that their sales turnover is declining while overhead costs rise, ultimately affecting their capacity to pay taxes. EBR’s Ashenafi Endale explores the situation.