05 Aug Ethiopian Macro Economic Reform- Liberalizing the Currency Exchange Market (videos)
One of the voices I trust in Ethiopian economics and investment is Ermias Amelga.
We have only a few of his classes in this industry. He has experience in US and Ethiopian investment banking and practical entrepreneurship. He is both an expert and a practitioner. We need more of his types.
He had a recent two-part interview with Sheger FM 102 (Amharic).
I agreed with his balanced assessment of Ethiopia’s recent macroeconomic monetary policy change.
Like every policy change, the success of this one depends heavily on its implementation and the active involvement of all stakeholders.
At least, this macro policy reform may solve one of the constraints the country has been experiencing for years, which has suffocated its growth and deterred the expansion of the private sector.
This change may facilitate a relatively easy Capital flow in and out of the country, leading to an influx of foreign direct investment.
But, as Ermias made clear in the interview, the same policy has had a history of both success and failure. Some countries flourished with it, while others were ruined by it.
Anyway, please check out the interview and share your take on the new policy change and its future prospects.
If you’re like me, a student of finance and investment and closely following what is happening in the Banking sector in Ethiopia, watch this 2-part presentation by Ermias Amelga (in English). He shared the historical context about the industry plus his own journey moving from the US to the country in 1998 to participate in the infant privatization movement back then.
Interestingly, he passionately advocated for the liberalization of the exchange market, leaving the market to determine the rate well before the recent macroeconomic monetary reform.
Of course, there are other economists who argue against the recent move.
I am a strong advocate for a free market economy with little or no intervention from the government. I don’t see any other way for the country to move forward in the right direction to enjoy the full benefits of a liberal market without lifting this chokehold that prevents the free movement of capital in and out of the country. Whatever other reforms, such as inviting foreign banks, are executed, they can’t deliver significant economic transformation without liberalizing the exchange market.
Any ways, here is a very informative presentation by a financial and investment Guru. Listen to it and make up your own mind.