August 1, 2012 ·0 Comments
The PTA Bank President Tadesse Admassu, picture: PBase.
DJIBOUTI — The Djiboutian Minister of Economy and Finance, Elias Dawaleh Moussa, on Monday received a high ranking delegation from the PTA Bank at his office for talks.
The delegation was led by the bank’s President Tadesse Admassu and the Director of Legal and Corporate Affairs, Premchand Mungar, and were representing the trade and financial arm of the institution or Common Market for Eastern and Southern Africa (COMESA).
Discussed were issues related to the cooperation between the Republic of Djibouti, one of 18 African shareholder countries, and the bank.
Mr. Dawaleh opened the talks by briefing the officials of the current economic conditions in the Red Sea nation. The minister stated that Djibouti witnessed an average growth rate of 2.4 percent between 2001 and 2005, while data recorded showed 4.8 percent growth between 2006 and 2011.
According to him, port activities, construction and public works (BTP) and tourism remain the main driving force in the economy. He added this was aided by large inflows of foreign direct investment (FDI).
Mr. Dawaleh said Djibouti received a total of US$3.3 million of direct foreign investment in 2000, which rose to more than US$234 million in 2008 before falling to $92 million in 2011 — over 60 percent drop in FDI in two years.
The drop in FDI inflows into Djibouti is largely blamed on some external and natural shocks such as the current global economic slowdown, high inflation, recurring droughts, high global commodity prices and increasing foreign debt.
According to the latest International Monetary Fund report, Djibouti’s account deficit doubled from 6 percent of Gross Domestic Product (GDP) in 2010 to 12 percent in 2011. Djibouti’s external public debt stock increased over the last decade from 40 percent of GDP in 2001 to 70 per cent in 2009, which surpassed the public debt warning alarm threshold of 60 percent of GDP. The latest figures showed that foreign debt stood more than $700 million.
The small nation was one of few African states deemed eligible for the Heavily Indebted Poor Countries (HIPC) scheme.
The minister reintegrated that the current conditions were having an adverse effect on the national economy and thus will not be enough to reverse poverty.
“Today, the Republic of Djibouti is facing a double challenge of strengthening infrastructure through an external resource mobilization and debt sustainability. Our country has difficulties in mobilizing resources for sectors such as fishery, tourism, housing, energy, mining, etc.,” he said.
While expressing hope at the visit of PTA Bank, Mr.Dawaleh invited them to invest in the sectors of housing, renewable energy, transport and to help industrialize the country.
On his part, the PTA Bank President Admassu Tadesse expressed pleasure for visiting Djibouti and promised close working relations. He indicated the bank’s willingness to lend the former French colony financial loans at competitive rates matching other COMESA shareholder countries.
Mr. Admassu said his multilateral development bank will play role in the development of regional infrastructure projects including ports, railways, energy and water. He ensured Djibouti that the bank was on their side to help avoid possible shakes in economy in the future.
An economist and banker, Mr. Admassu was elected as the President of PTA just three months ago and according to the bank he received his education at the London School of Economics and Political Science, Wits Business School and the University of Western Ontario. He did further studies in advanced management and banking at Harvard Business School and INSEAD.
His economic plan for the next five years is expected to contribute significantly to all member states including Ethiopia, his birth country and the main beneficiary of Djibouti’s infrastructure.
The PTA Bank Shareholders include African Development Bank, Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia, Zimbabwe, DR Congo and the only non-African state, China.
Djibouti said its economic priories for this year include poverty reduction, aggressive economic growth while safeguarding macroeconomic stability, improving quality of basic services, and to implementing better land development initiatives.
August 1, 2012Follow @somalilandpress