CIPE Hosts Policy Roundtable on the Impacts of COVID-19 on the Ethiopia Economy

CIPE and its partners are working worldwide to monitor and mitigate the effects of the COVID-19 pandemic.

As one example, on July 18 and 25, CIPE and ABEGA Management held a televised roundtable on the impact of COVID-19 on the Ethiopian economy. The discussion was taped and broadcast on Ethiopia’s national television station, ETV News. Parts one and two are also available on YouTube (Amharic).

The two-part series presented thoughtful discussion on the direct and indirect impacts of COVID-19 on the Ethiopian economy, with a deep dive on the macro-economic impacts, sectors most significantly impacted, current gaps in the government response, and what ought to be done.

Speakers included Endalkachew Sime (State Minister, for National Planning Commission), Yesuf Ademnur (Secretary General, Ethiopian Chamber of Commerce and Sectoral Association), Demessie Chanyalew (Independent Economist, PhD), Hailemelekot Asfaw (Director, CIPE East Africa Office) and Getachew Teklemariam (Program Manager, CIPE East Africa Office). The discussion was facilitated by Yebegashet Alemayehu, CEO of ABEGA.

Some of the highlights from the discussions include:

Macroeconomic Impacts:

• COVID-19 is slowing Ethiopia’s GDP Growth. Projections show that reduction in GDP growth could amount to 2.8% – 3.8%.
• Inflation is increasing, and consumers are starting to feel the pinch.
• Current projections show that from 700,000 to 1.4 million jobs could be lost.

Sectoral Impacts:

• While agriculture is considered more insulated from the pandemic, the increasing number and diversity of value chain disruptions will soon hit the sector hard.
• Food insecurity is worsening. Around 30 million people are in need of food assistance.
• Construction and manufacturing are also being hit very hard.

Government Responses:

• Government is taking many measures. They include: increasing liquidity, providing tax relief, issuing VAT refunds, allowing duty-free imports, and facilitating Letters of Credit, to name a few examples.
• The government’s new 10 Year Perspective Development Plan considers the mid- and long-term impacts of the pandemic.

Policy Priorities Discussed:

• Policy makers must give due attention to issues of peace and stability.
• There is a need to develop and implement a comprehensive economic response and recovery plan.
• Government must engage the private sector in all elements of response and recovery planning.
• Government, private sector, and researchers much accurately capture the medium and long-term impacts of the pandemic in their research and planning.
• This is a crucial moment for policy makers to act in thoughtfully and engage the private sector in all facets of the economic recovery and reconstruction.

For more information or analysis on the impacts of COVID-19 on the Ethiopia economy, reach out to gteklemariam@cipe.org.