Charles Diggers

The delegation of the International Monetary Fund (IMF) in its mission to Eritrea 14 to 29 September 2009, has held important consultations under Article IV, following the previous ones held in April 2008. The IMF delegation met with Minister of Energy and Mines, Ali, with the Governor of the Bank of Eritrea, Woldemariam, with the Director General of Treasury, Woldeghiorghis, with the Director-General of Budget (Ministry of Finance) , Tessfaldet, and with senior officials and representatives of the international community and civil society. The head of the IMF delegation in Eritrea, Mario de Zamaróczy, thanking the Eritrean authorities for the warm hospitality received and for their fruitful discussions, highlighted by the completion of the work, the mission of the International Monetary Fund has been able to examine, in a depth, all the economic developments since the last consultation and discussion with the Eritrean authorities macroeconomic policies adopted in response to severe drought of 2008, the international crisis of food prices and oil prices and global recession. Economic growth in Eritrea, because of these serious events, has been weakened, with growth not as large as estimated, while inflation is rising and progress in fiscal consolidation is at the moment, stopped. The mission noted, however, a number of areas where significant progress has been made, related to the continuous and significant investment in farms, in irrigation projects for agriculture in the country gradually away from dependence on irregular rainfall and significant advances in industry. The delegation expressed great appreciation for the valuable programs of public investment in various sectors such areas as education, health, mining, infrastructure, cement production, tourism, green energy and fisheries. The delegation noted that these major investments should contribute to a resumption of economic growth Eritrea already in the medium term. The economy of this small but very hard-working country in the Horn of Africa, you will have for the foreseeable future, other important growth factors, such as that of the next mining and increasing domestic production of cement, although there could be downside risks linked to budgetary difficulties, the current account deficits, levels of foreign debt and domestic inflation and a growing. Economic growth, even with the positive effects of the massive investments made, could, however, still remain in the short term, below the level needed to achieve a more substantial reduction of poverty. Been analyzed, because in the course of discussions between the IMF and economic authorities from Eritrea, a number of possible policy measures to boost the overall growth and develop the economic activities of the private sector. In the short term the focus should be on the restoration of macroeconomic balance and financial, through fiscal consolidation, reduction of budget deficit financing from the banking sector, reduction of controls over imports, to boost imports of basic goods and intermediate . It was agreed that international pressure will stop when caused by serious economic world in place, it’s time to bring inflation under control, with gradual fiscal and monetary policies, not to slow down the process for future economic growth, triggered by the massive investment public place in all economic sectors. Spending priorities will be identified by the Eritrean government to increase the effectiveness of public spending in an environment where financial resources are still too limited. The IMF also suggested the adoption, in the medium term, measures that promote external competitiveness, liberalization of the financial industry, elimination of administrative bottlenecks and encouraging private investment in productive sectors. The IMF concludes his report by stating that, with proper reform policies, with the development of human wealth and the potential of mineral resources, Eritrea could be well positioned to resume after the global recession.
This report confirms the goodness of the new Berlusconi government policy of opening to Africa, and Eritrea, in particular, whose gigantic effort to stake complete elimination of poverty and economic development to bring prosperity to their people, must be supported by Italy. Our country will, thus, the trade and economic partner of reference of a very industrious people and to us so closely linked by strong historical and cultural constraints, ranging, however, strengthen and better exploited.

of 13/11/2009 num. 213 – Pag. 2

Source: Denaro