Ethiopia: make greater efforts to strengthen the private sector

The role played by the private sector in the economic growth of a country is not only a presupposition. Rather, it is a reality that is confirmed time after time and a useful tool and a necessary condition has been shown to support development.

It is clear that private entrepreneurship facilitates long-term economic transformation and prosperity through its potential to create massive job opportunities for citizens, to improve technological transformation, efficiency, expand trading opportunities and competitiveness and attract foreign exchange reserves.

In addition, it makes a significant contribution to tax revenues, which will be used for the development and maintenance of infrastructure and services (such as electricity, water, roads, transport, telecommunications, hospitals, schools, sanitation and waste management, among others). role in financing for development and national income.

In recognition of these crucial roles and because public corporations can not themselves expand the required goods and services at the desired level, governments try to appeal to the private sector, both local and foreign investors, to participate in their development agenda & # 39; s .

The public sector has been actively involved in strengthening the economy of the country. In line with this, it has created a favorable environment by offering incentives, such as revenues from tax revenues, and exemption for import and export items to further increase the involvement of the private sector and increase capital inflows. As a result, the investment has grown enormously in the last two decades and remarkable success stories have been recorded.

However, when success is evaluated from the context of competitiveness on regional and global markets, it is disappointing. This is reflected in several global trade initiatives in which the country has participated.

The African Growth and Opportunity Act (AGOA) is the best indicator for this saying. As it was said repeatedly, the nation could not take full advantage and took advantage of the opportunity.

An important part of this bottleneck due to limitations in meeting the world's competition standards on quality and quantity, hard currency deficits, skills gaps and capacities, low market information. Delay or non-responsiveness to immediate demand and not being able to diversify the range of export products are also the other disadvantages for the private sector.

As a country, to further strengthen its economy, to penetrate global and regional markets, and to curb the above-mentioned blockades, improving competitiveness is not an issue to be ignored or neglected. In order to achieve this effect, it is crucial that the private sector is more involved.

In particular, while in the meantime the country has signed several trade agreements, such as the African continental free trade zone, a free trade agreement that aims to create an internal market for goods and services in Africa, and it is entering into the world Trade organization, strengthening the private sector, increasing competitiveness and increasing market opportunities is a sensible step towards achieving more national economic development objectives.

To this end, the country must invest in its human capital and technological capacities.

Source link

Leave a Reply