https://x.com/EstherPassaris/status/1915401625209807081
https://x.com/KIMANIICHUNGWAH/status/1914870252506120241
The level of desperation by this government to show progress has reached insane levels. Anyone with basic knowledge of economic issues knows that Ethiopia was forced by the IMF to liberalise its exchange rate regime, resulting in over 55% devaluation of the Ethiopian Birr. This obviously resulted in a big decline in its GDP in dollar terms.
For those struggling to understand this, here is how it works. Suppose Kenya’s GDP was KSh 15,000,000,000,000. If the exchange rate is KSh 150 per dollar, our GDP in dollar terms would be USD 100 billion. If the shilling appreciates to KSh 100 per dollar, our GDP in dollar terms would rise to USD 150 billion.
The inverse applies to Ethiopia, imagine their GDP was 500 billion BIRR. If the exchange rate was 50 per dollar, their economy in dollar terms would be 10 billion dollars. Imagine the imf forces them to devalue the birr to 100 to the USD. Their economy in dollar terms is now? 5 billion dollars
Kenya’s GDP in dollar terms isn’t overtaking Ethiopia’s because we have increased production. It is just an exchange rate issue.
This is Grade 1 arithmetic. How an adult can be excited about that is baffling. We report our GDP in shilling terms. IMF’s dollar conversion is just a paper exercise with no practical value.
Four months from now, the regime will have served 60% of its term. Yet in all fairness, it has nothing to show for its time in office