Ethiopia’s Prime Minister Abiy Ahmed has announced that the country’s foreign debt has dropped from $23 billion to $4.5 billion in just six years, describing the development as a major milestone toward economic self-sufficiency.
“The economy is growing without foreign loans. We have built a system that stands on Ethiopia’s own capacity,” Ahmed told lawmakers on Tuesday while addressing the House of People’s Representatives.
Defending his government’s Homegrown Economic Reform Programme, launched in 2019, the prime minister said the initiative had repaired macroeconomic imbalances and strengthened domestic revenue generation.
According to him, Ethiopia’s annual revenue, which once stood at 170 billion birr (about $2.95 billion), is now projected to reach 1 trillion birr (about $17.3 billion).
Ahmed disclosed that the government had spent 440 billion birr ($7.6 billion) in subsidies to “stabilise inflation,” which has now dropped to 11.7 percent, the lowest level since the reform agenda began. Most of the funds, he said, went into fuel, fertiliser, and public sector salaries, alongside social initiatives such as school feeding programmes.
“We have used every possible instrument to ease the cost of living. Our economy is standing tall again,” he said.
Despite the upbeat figures, analysts warn that the recovery has yet to fully reach ordinary Ethiopians. While inflation has slowed, food and rent prices remain high, eroding wage gains and squeezing household purchasing power, a challenge faced by several African economies pursuing fiscal reforms amid global financial shocks.
Faridah Abdulkadiri
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