By Addis Getachew
ADDIS ABABA, Ethiopia (AA) - Ethiopia on Tuesday said its economy slowed down to a single digit of 8.5 percent for the first time in a decade during its fiscal year.
The fiscal year in Ethiopia begins July 8, 2015 and ends July 7, 2016.
Over the past decade, the country claims to have registered a 11 percent Gross Domestic Product growth rate.
Prime Minister Hailemariam Desalegn told the country’s parliament the slowdown was due to a number of factors, including the El Nino induced drought, poor export performance and a small tax base.
The parliament on the occasion also endorsed the country's annual budget of 274 billion birr ($12.49 billion); the budget was 223 billion birr ($10.17 billion) last year.
“We will need to diversify our exports by adding manufacturing produces into the mix,” Desalegn said.
Value addition to Ethiopia’s exports would ensure the country’s debt sustainability, he said.
“Our dependence on agricultural produce exposed us to the effects of price fluctuations,” he said. Agricultural commodities constitute between 70 and 75 percent of the country’s exports.
The country, according to the prime minister, succeeded in offsetting what could have been a debilitating impact of the fall in global prices on agricultural commodities by increasing the volume of exports.
“Exports dramatically increased,” he said. “Coffee exports grew by 20 percent, sesame by 25 percent and cereals by 30 percent,” he said.
Without increasing the volume, the country’s economy would have been impacted badly as global prices fell during the year by 25 percent.
One of the reasons for the slowdown this year was also due to no rains during successive crop seasons.