(By a Contributor)
The impression of anyone reading the headlines would be that Ethiopia is liberalizing. Talks about securities exchange, financial sector opening-up, retail sector liberalization and market-based exchange rate dominate the air. While it is true that Ethiopia, an economy often touted as the last frontier of liberalization in Africa, is undergoing change, it is far from liberalizing. While the optic is liberalization, the reality is the prevalence of illiberal economic policies.
Take for example the exchange rate policies. It was on July 29, 2024 that the National Bank of Ethiopia (NBE), an old and opaque institution led by an inexperienced lawyer-darling of the international financial institutions, proclaimed that it has changed the exchange rate pivot to markets. Over the next two months, the Ethiopian Birr lost its value by more than 100%. As a result, Ethiopia obtained two tranches of payment from the International Monetary Fund (IMF) in the order of 589 million USD. The game did not last long, though. The NBE started its usual trick of interference.
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