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TimesLIVE
11-06-2025
- Business
- TimesLIVE
Ethiopia forecasts faster growth next fiscal year
Ethiopia's economy will grow slightly faster in the fiscal year that starts next month, while its budget deficit will increase marginally, its finance minister said on Tuesday. The East African nation, which is restructuring its external debt, is implementing far-reaching economic reforms backed by an International Monetary Fund (IMF) loan programme. Finance minister Ahmed Shide told parliament that the government is forecasting economic growth of 8.9% in the fiscal year that runs from July 8 2025 to July 7 2026, up from an estimated 8.4% in the current fiscal year. A budget deficit of 2.2% of gross domestic product (GDP) is expected versus 2.1% this fiscal year, while overall spending will be about 1.9-trillion birr (R248.16bn) next year, he said. Ethiopia's export revenue over the past 11 months of this fiscal year stood at $7.2bn (R127.62bn), Ahmed said, up 118.2% from the previous financial year. Prime Minister Abiy Ahmed has told domestic media outlets in recent days that the country's coffee and gold exports have surged.
Arabian Post
10-06-2025
- Business
- Arabian Post
Ethiopia Targets 8.9 % Growth as Budget Widens
Ethiopia's finance minister has announced that the economy is projected to expand by 8.9 % in the fiscal year beginning 8 July 2025, alongside a modest increase in the budget deficit amid structural reforms. Finance Minister Ahmed Shide addressed parliament on Tuesday, outlining the forecast for the next fiscal year, citing an acceleration in real GDP growth from an estimated 8.4 % this year to 8.9 % next year. The state budget deficit is expected to rise slightly to 2.2 % of GDP, compared to 2.1 % in the current year. Total government expenditure is projected at 1.9 trillion birr, equivalent to around US $14 billion. This positive outlook is deeply anchored in ongoing reforms backed by an International Monetary Fund programme. These include the liberalisation of the exchange rate, debt restructuring negotiations, and the establishment of the Ethiopian Securities Exchange, which opened in January after a 50‑year absence. ADVERTISEMENT The cabinet's approval of the new budget earlier this month signalled a strategic reallocation of resources, with spending set to increase by 31 % compared to the previous year's 971 billion birr. A significant portion is earmarked for national security, productivity enhancement, and disaster relief, including continued subsidies for fuel, fertiliser, oil and medicines—a move aimed at dampening inflationary pressure on households. Reforms and their impacts The IMF programme that began in July 2024 has been a linchpin in the reform agenda. In April, State Finance Minister Eyob Tekalign reported that the third review of the four‑year US $3.4 billion loan arrangement had reached staff‑level agreement, with approval by the IMF executive board anticipated this month. Subsequent draws will hinge on continued reform progress, notably debt restructuring. Debt, inflation and exchange rate liberalisation remain pressing concerns. A draft budget revealed that 463 billion birr—nearly 39 % of recurrent expenditure—will go towards debt servicing, surpassing planned capital outlays. The government intends to restructure approximately US $3.5 billion in external liabilities through agreements in upcoming weeks. Bondholder writedowns are expected as part of a broader debt resolution strategy. Monetary reforms have lessened inflation, which reached 29.2 % in 2022/23, and narrowed the spread between official and parallel exchange rates. Foreign reserves have rebounded, tripling to US $3.6 billion, easing foreign exchange shortages. These financial indicators have been central in IMF assessments. Policy makers are awaiting formal debt restructuring talks this summer with official and private creditors alike, guided by the G20 Common Framework. Iran‑timed agreements with Chinese policy banks, the U.S. International Development Finance Corporation and other funders are being explored to support infrastructure and development needs. Regional comparisons and strategic outlook Ethiopia remains one of sub‑Saharan Africa's highest growth economies, although still below the pre‑covid annual average of around 10 %. The country's trajectory continues to be shaped by recovery from the Tigray war, covid‑19 disruptions, droughts and locust invasions, but ongoing reforms are expected to unlock further expansion. The imminent fiscal year budget, combining a steep rise in expenditure with a stabilising deficit, underscores a cautious but ambitious strategy: focusing on debt management, reform momentum and public service delivery, rather than unfettered spending. Key stakeholders, including opposition figures such as Desalegn Chane of the National Movement of Amhara, have voiced concern over rising tax burdens amid steady living costs and a depreciating birr. Criticism has targeted new levies on motor vehicles and excise taxes, with claims these conflict with subsidy policies. The finance minister, however, defended these as necessary for fiscal resilience and revenue expansion. Broader reform dynamics have been influenced by Prime Minister Abiy Ahmed's economic agenda, including the launch of Ethiopia's first stock market since the Haile Selassie era, currency liberalisation, and opening the banking sector to foreign investment. These steps have been deemed essential to securing up to US $27 billion in external funding from IMF, World Bank, UAE, China and others over the next four years. Looking ahead The projection of roughly 8.9 % GDP growth signals confidence that reforms are gaining traction, even as the government prepares to finance a wider budget and service rising debt. The success of the IMF programme's next review, debt restructuring outcomes, and reform implementation will determine whether Ethiopia can sustain its economic momentum and weather domestic and global headwinds.
Reuters
10-06-2025
- Business
- Reuters
Ethiopia forecasts faster growth next fiscal year
ADDIS ABABA, June 10 (Reuters) - Ethiopia's economy is forecast to grow slightly faster in the fiscal year that starts next month, while its budget deficit will increase marginally, its finance minister said on Tuesday. The East African nation is implementing far-reaching economic reforms, backed by an International Monetary Fund loan programme. Finance Minister Ahmed Shide told parliament that the economy was forecast to expand 8.9% in fiscal year that runs from July 8 2025 to July 7 2026, up from an estimated 8.4% in the current fiscal year. A budget deficit of 2.2% of gross domestic product (GDP) is expected versus 2.1% of GDP this fiscal year, while overall spending will be about 1.9 trillion birr ($14 billion) next year, he said. Despite being one of the fastest-growing countries in the region in recent years, Ethiopia's economy was held back by a devastating two-year war in the northern Tigray region. ($1 = 134.4212 birr)
Yahoo
16-05-2025
- Business
- Yahoo
Ethiopia secures more than $1.6bn in minerals and energy investment deals
The Ethiopian Finance Ministry has announced the signing of five major investment deals, worth more than $1.6bn (214.99bn birr), to bolster the country's minerals and energy sectors. These agreements, predominantly with Chinese companies, are part of Ethiopia's economic reform strategy. The deals were secured during the two-day Ethiopia High-Level Business Forum 2025 held in Addis Ababa. Among the investments are a $500m commitment from Huawei Mining Processing Company for minerals exploration and processing, and the establishment of a specialised economic zone. Sequa Mining and Processing, a joint venture between Ethiopian and Chinese companies, has pledged $600m to advance coal mining projects within the country. Minister of Finance of the Federal Democratic Republic of Ethiopia Ahmed Shide reiterated the government's commitment to creating a supportive environment for private sector growth, maintaining macroeconomic stability and implementing comprehensive reforms, including the newly introduced Macro Reform Programme. Shide said: "There has never been a more opportune moment to invest in our nation." He highlighted that investment is crucial for achieving shared objectives of resilience, inclusive prosperity and sustainable development. The Ethiopian Finance Ministry also signed deals with Hanergy New Energy Technology Company, which plans to invest $360m in constructing a solar cell manufacturing facility. An additional $250m will be invested by Sesar Energy Advancing Solutions for solar energy development, while Toyo Solar Manufacturing Development plans to invest $14m (Y2.04bn) in solar cell capacity. The Finance Ministry has not specified a timeline for the inflow of these funds into Ethiopia. This influx of capital is set to play a key role in the nation's extensive reform initiatives, which include liberalising its currency and working towards an $8.4bn debt restructuring with its official creditors, following a $3.4bn programme deal with the International Monetary Fund in July, reported Reuters. In May 2024, Gold and copper exploration company KEFI launched the Tulu Kapi Gold project in western Ethiopia. "Ethiopia secures more than $1.6bn in minerals and energy investment deals" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
16-05-2025
- Business
- Yahoo
Ethiopia secures more than $1.6bn in mining and energy investment deals
The Ethiopian Finance Ministry has announced the signing of five major investment deals, worth more than $1.6bn (214.99bn birr), to bolster the country's minerals and energy sectors. These agreements, predominantly with Chinese companies, are part of Ethiopia's economic reform strategy. The deals were secured during the two-day Ethiopia High-Level Business Forum 2025 held in Addis Ababa. Among the investments are a $500m commitment from Huawei Mining Processing Company for minerals exploration and processing, and the establishment of a specialised economic zone. Sequa Mining and Processing, a joint venture between Ethiopian and Chinese companies, has pledged $600m to advance coal mining projects within the country. Minister of Finance of the Federal Democratic Republic of Ethiopia Ahmed Shide reiterated the government's commitment to creating a supportive environment for private sector growth, maintaining macroeconomic stability and implementing comprehensive reforms, including the newly introduced Macro Reform Programme. Shide said: "There has never been a more opportune moment to invest in our nation." He highlighted that investment is crucial for achieving shared objectives of resilience, inclusive prosperity and sustainable development. The Ethiopian Finance Ministry also signed deals with Hanergy New Energy Technology Company, which plans to invest $360m in constructing a solar cell manufacturing facility. An additional $250m will be invested by Sesar Energy Advancing Solutions for solar energy development, while Toyo Solar Manufacturing Development plans to invest $14m (Y2.04bn) in solar cell capacity. The Finance Ministry has not specified a timeline for the inflow of these funds into Ethiopia. This influx of capital is set to play a key role in the nation's extensive reform initiatives, which include liberalising its currency and working towards an $8.4bn debt restructuring with its official creditors, following a $3.4bn programme deal with the International Monetary Fund in July, reported Reuters. In May 2024, Gold and copper exploration company KEFI launched the Tulu Kapi Gold project in western Ethiopia. "Ethiopia secures more than $1.6bn in mining and energy investment deals" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
