COVID-19 Africa Watch talks to State Minister Yasmin Wohabrebbi about the policy response to the pandemic, the efforts to develop the digital economy, and the G20 Debt Service Suspension Initiative (DSSI).

Key Takeaways

Below are a few of the main takeaways from COVID-19 Africa Watch’s conversation with H.E. Yasmin Wohabrebbi, State Minister for External Economic Cooperation, Ethiopia Ministry of Finance.

• Early preparation and planning (both for macro-economic management and emergency response) enabled Ethiopia to minimize the most devastating consequences of the pandemic. But the economy has suffered, particularly due to a decline in external revenue, falling tourism receipts and remittances, and a sudden halt in foreign direct investment.
• Prior to the pandemic, Ethiopia launched a series of comprehensive policy reforms. The government has been liberalizing key sectors, addressing several binding constraints across the economy, and working to bolster critical sectors such as agriculture, healthcare, logistics, education, tourism, and manufacturing. Despite the impacts of the pandemic, Ethiopia is moving ahead with enhancing investment climate reforms.
• The Ministry of Finance has identified four pillars for their National Digital Payments Strategy, which is seen as all the more pressing in light of the pandemic: 1) establishing a universal national digital ID, 2) expanding digital payment platforms and digital financial inclusion, 3) promoting good governance by leveraging e-government, and 4) enabling e-commerce.
• Even before the pandemic, addressing debt sustainability was a key priority. Unfortunately, the G20 Debt Service Suspension Initiative (DSSI) has arguably fallen short of expectations and of the dire needs of developing countries. In practice, the initiative has lacked clarity and a central communication mechanism for providing a framework for requesting and negotiating the terms of debt suspension.
• The more recent G20 Common Framework for Debt Treatments is a welcome improvement in terms of providing a broader framework for debt relief – but even this framework will need flexibility and adaptable implementation mechanisms in order for it to effectively address the needs of Ethiopia and other countries.

The interview was conducted by Veronica Moraa Nyamweya, an IFC-Milken Institute Capital Market Scholar from the Capital Market Authority of Kenya.