Economy
Macroeconomic Reform Places Pressure on Small and Medium Enterprises
The Reporter (Amharic) · 4 hours ago · Read the Full Story on The Reporter (Amharic)
AI SUMMARY
A recent study by the Forum for Social Studies reveals that ongoing macroeconomic reforms are placing heavy pressure on small and medium enterprises, potentially forcing them out of the sector.
- The Forum for Social Studies hosted a discussion on October 22, addressing the results and challenges of recent macroeconomic reforms.
- Economist Birhanu Denu explained that the reforms aimed to stabilize the macroeconomy, balance government expenditures and revenues, resolve foreign currency shortages, and curb inflation.
- Large enterprises are better positioned to benefit from the reforms due to dedicated legal departments, formal accounting systems, digital technology access, and strong banking relationships.
- Small and medium enterprises struggle with a lack of working capital, limited digital skills, and difficulties in meeting collateral and documentation requirements for credit.
- Engineer Bogale Bitane argued that the reforms lack meaningful private sector participation, leading to business alienation and traders surrendering their licenses or leaving the country.
- Participants noted that tax reforms were implemented too abruptly, damaging business cash flows, and cited issues with conflicting laws, regulations, and circulars.
- Birhanu clarified that his study relied on data from reliable international organizations such as the World Bank and the IMF rather than personal observation.
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