More Effort Needed to Meet Budget Year’s Growth Target

By Abebe Woldegiorgis

As the nation's economy mainly relies on agriculture the volatility of the sector to different types of shocks, creates uncertain to the whole economic performance.

Similar to other countries, agriculture is not immune from the current El Nino which is the one aspect of the climate change and global warming. Hence, in such circumstances managing the crises and redoubling effort to meet the targeted economic growth is essential.

Presenting Ministry six-month performance report to the House of People's Representatives yesterday, Finance and Economic Development Cooperation Minister Abdulaziz Mohammed said the Ministry planned to raise the economic growth by 11 percent by strengthening sectors such as agriculture, industry and services.

In this regard, in the supply side the agricultural sector is expected to be the source of growth. However, due to El Nino, scarcity of rain occurred in some parts of the country negatively impacting crop production, animal resource and the whole economy.

Hence, to achieve the planned economic growth, making rigorous effort surpassing the previous budget year is essential. In addition to this, in order to reduce the negative impact of climate change in the remaining months working for the enhancement of crop and animal productivity is vital.

According to Abdulaziz, to stabilize commodity price inflation, pursuing strict monetary policy is essential and the current budget year plan emphasized on that. He further said citing Central Statistical Authority report released last December, the past 12 months moving average inflation rate is 10.1 percent and such increment continued slightly. For this increment food price inflation contributes a lot.

However, the inflation rate of none food items remained in a single digit which is 7.9 percent and to manage the possible risk, strong fiscal and monetary policy will be implemented. In addition, the government planed to supply food commodities to the market to stabilize the price.

During the discussion, question was raised by a parliamentarian regarding whether preemptive measures were taken to curb the consequence of drought caused by El Nino.

In his response, Abdulaziz said the government tried its level best by informing farmers to prepare themselves to employ their coping mechanism but due to the occurrence of extreme weather condition which is beyond their capacity were unable to curb the situation. But thanks to the government effort, the drought could not be changed into famine.

Source: All Africa