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Monday, July 28, 2014

Ethiopia should consider devaluing its currency to boost exports as they are mostly unprocessed products and need to stay competitive on price, a World Bank economist said on Tuesday. Ethiopia, whose main exports are coffee, horticultural products, oilseeds and livestock, has operated a carefully managed floating exchange rate regime since 1992.

The last big devaluation was in 2010 when the birr lost 16.7 percent of its value to the dollar. The central bank quoted the birr at 19.6511/19.8476 to the US currency on Tuesday. "By one measure of real exchange rate, Ethiopia's currency is 31 percent overvalued," the World Bank's lead economist in Ethiopia, Lars Christian Moller, said in Addis Ababa.

At an event to launch an economic report on the Horn of Africa nation, he said devaluing the currency by 10 percent could increase export growth by 5 percentage points a year. "Ethiopia's exports are relatively unsophisticated, unprocessed and tend to compete in price, that means that we need to look more into what are the export prices, and how can we manage them," he said.

"This is where a competitive real exchange rate comes in. We argue that it could help support export promotion," he added. The Horn of Africa country's exports rose to $2.6 billion in the first 10 months of 2013/2014, an increase of almost $5 million over revenue earned through all of 2012/2013. But earnings from coffee, the country's main commodity export, tumbled to about $489 million during the period, less than half of the government's target.

Ethiopia has been a star economic performer in Africa, reporting double-digit growth in several recent years. Growth has edged down but the International Monetary Fund still expects a robust 8 to 8.5 percent for fiscal years 2013/14 and 2014/15. Both the World Bank and IMF have said the government needs to loosen the reins on the economy, which is still heavily controlled by the state, to avoid squeezing out the private business and hurting growth prospects in future.
Copyright Reuters, 2014

Nine Ethiopian journalists and bloggers, who had been arrested in April, have been charged with terrorism for having links with the US-based Ginbot 7 opposition movement, and for planning attacks. Ginbot 7 is considered a terrorist organisation in Ethiopia.
Ethiopian Prime Minister Hailemariam Desalegn denies he is undermining the freedom of the press. "Anyone who is seen and acting within this terrorist network will be eligible for the course of law," he told reporters. "When you put yourself into this network and you try to become a blogger, don't think that you are going to escape from the Ethiopian government.”
Gado by Gado
Gado by Gado
Who is Gado?
Gado, full name Godfrey Mwampembwa, is one of Africa's most influential cartoonists. He draws a daily cartoon for Kenyan newspaper The Nation, and his work has appeared in various other publications, such as Le Monde, the Washington Times and the Japan Times.
Gado is also the man behind XYZ, a Kenyan satirical TV show commenting on current affairs and politics in the form of puppets. He was named Kenyan cartoonist of the year in 1999, and received the Dutch Prins Claus Award in 2007.
"I draw because I want to say something. My drawings are my tools," says the Tanzanian-born cartoonist.
You can check out our whole Cartoon of the week series here.

  • &#039;Freedom of the press&#039; in Ethiopia<br>&copy; Cartoon: Gado - http://gadocartoons.com/

Ethiopia continues to record impressive economic growth and is estimated to be one of the first growing economies in Africa.

Ethiopia - Gross domestic product

(US dollars, billions)
in 2013
GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates.
World Bank ‘wrong’ on Ethiopia’s ranking on ease of doing business - Desalegn - CNBC Africa