Ethiopia fuel import hard currency reserve increases

Ethiopia’s hard currency reserve for fuel import has increased over the past months exceeding three months at the moment, Prime Minister Abiy Ahmed said.

Prime Minister Abiy Ahmed of Ethiopia indicated that when he came to power the country’s economy was a t the verge of collapse with shortage of cash and only around one month fuel import reserve.

He made the remark on Saturday during his consultation with over 3,000 teachers from across the country.

A healthy economyneeds to have reserve of hard currency for a minimum of three months fuel import, advices the International Monetary Fund (IMF).

Latest reports show that Ethiopia imports up to 4 million tons of fuel every year.

For the past few decades, Ethiopia has been one of the countries in the world frequently facing hard currency shortage. Some economists suggest liberalization of the financial market allowing foreign banks to operate as the solution.

While others suggest boosting export income of the country, value adding to the raw export commodities, diversification of export items and import substitute the strategy which bared not much fruit.

Currently Ethiopia’s annual import bill has surpassed over $17 billion. Meanwhile the export earnings of the country has been declining over the past few years reaching less than $3 billion last year.

Currently, Ethiopia’s export is dominated by raw agricultural commodity such as, coffee and oil seeds.