Addis Ababa – Prime Minister Meles Zenawi said the Ethiopian government has succeeded in stabilizing inflation and it has been coming down continuously.

In an interview he gave to Africa Confidential last week, Prime Minister Meles said that the government has tried to intervene using various policy instruments, to bring down the inflation caused by global inflationary pressure and over hearing of the local economy.

The government has also been taking measures to cool the economy down without cutting back on development, he said, and expressed hope that over the next five or six months inflation will come down to single digit.

Intervening in various areas, controlling the growth of money supply in the economy, dampening the inflationary expectations among the various economic actors were among the steps taken to contain the inflation, according to Meles.

“Given the benign global environment, from the point of view of inflation and the steps that we have taken domestically, I think that we can deal with this issue,” he said

concerning shortage of foreign exchange , the premier spoke that it is a key and binding constraint as far as growth in Ethiopia is concerned and doesn’t have an easy solution.

There are structural reasons for the problem, he said and added that learning to live in an environment of foreign exchange constraint, while at the same time trying to mitigate its impact are the options at hand.

Asked about what African countries could do to counter the effects of the global economic slowdown

Meles said that Africans have to devise their own strategies of not only overcoming the current economic difficulties but also engaging in a process of economic transformation to withstand any future shocks of a similar kind. “In the end no amount of money that comes in from abroad is going to do the task for us.”

It is now up to Africans to come up with alternative strategies of development he said and underlined that Africa’s development partners in the G-20 and the G-8 should follow the lead of the Prime Minister of the UK and recognize that the policy orthodoxy imposed over the past three decades in Africa has not delivered and it is time to look for other alternatives.

“If this was combined with a permissive global environment and ownership of Africans of their development strategy, then I think we could reverse the current trend,” he noted.

(WIC)

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