With the anticipation of the Ethiopian economy to shrink due to coronavirus pandemic, the government should take appropriate additional intervention measures, an economist said.
In an exclusive interview with ENA, the economist Costantinos Berhutesfa said COVID-19 will affect the economy in major ways, including the import-export, finance, tourism and hospitality, transportation as well as the services sectors.
“COVID-19 will create tremendous pressure on the government in terms of meeting expenditure in particular,” he said.
Following the ongoing spread of the virus, the government has ordered employees to work from home; and its impact could not be underestimated, Costantinos explained.
According to the economist, “COVID-19 will create tremendous pressure on the government to meet the necessary material and even financial supplies like loans for local enterprises.”
He expressed his concern that the disease could affect productive regions of the country and farming communities unless the spread of the virus is put under control in a very short period.
“At this moment, COVID-19 cannot of course be portrayed as a serious threat to the Ethiopian economy. But if the virus attacks the farming community and the productive regions, it will become very serious as it disrupts agricultural programs and plans.”
This would create production gap, commodity reduction and increment of prices on basic goods across the country, the economist elaborated.
Therefore the government needs to control and contain the pandemic so that it will not spread out of Addis Ababa, especially into the productive regions of the country,” Costantinos stated.
Besides, the economist believes that the country will face challenges especially with regard to the construction of mega projects and infrastructures as the shortage of hard currency will make it impossible to source essential medical supplies and equipment from abroad.
The government needs to have an emergency budget to accelerate the containment efforts of coronavirus pandemic, Costantinos urged.
Meanwhile, the government had last month established a national resource mobilization committee tasked with coordinating efforts of gathering financial and non-financial materials to fight the virus and alloted 5 billion Birr to fight the virus and 15 billion Birr to help stabilize the economy
Source: Ethiopia News agency