It was recently reported that Ethiopia’s Central Bank devalued the Ethiopian birr by 15 percent to boost lagging exports. The devaluation will make exports, which have been falling short of their targets in recent years, more competitive and appear cheaper to foreigners who are buying goods exported by Ethiopian merchants increasing demand for exports. However, the effect of a devalued currency is far reaching and affects much more than the market for exports, and this is especially true in Ethiopia where the economy is still experiencing inflation and instability.
So how does this change translate into the job and labor market? Just like the positive effect devaluation has on exports, it has an equally negative effect on imports. This includes petrol, food and other raw materials on which some of Ethiopia’s industries heavily rely. If you were looking for jobs in an industry that was especially heavily reliant on imports such as construction and retail, you may find that they are minimizing their cost by cutting back on human resource or even salaries. This will make the job market in these industries much more competitive than they are now, so you should strategize ways to make yourself stand out from the crowd. On the flip side, industries such as tourism and export will be clamoring to take advantage of this devaluation; this will potentially translate into more jobs and relatively better pay.
The higher cost of operation for industries relying on imported goods will manifest itself into a higher cost of living for the middle and lower class. If you have been thinking about asking your boss for a raise, this is a solid reason on which you can base your request. But remember, your company is also probably trying to cope its finances with these changes so if you get no for an answer— don’t take it personally.
Another possible outcome from this monetary change is its effect on the operation of local and international NGOs. Because most NGOs rely on foreign supplied aid that is awarded based on a specific agreement made ahead of time, it might mean that these organizations will end up with “more money” than they planned. Think about it; if an organization was awarded, say, USD 1,000 at the beginning of the year, it will plan to operate with the assumption that it will have about 23,000 Birr. However, now, it will have 26,000 Birr. That’s a significant change when you think about the millions of dollars that are coming into Ethiopia in the form of aid. This might make the aid and non-governmental sector an attractive one to join!
In the overall, if you are a job seeker, it means you can be specific about the industries you want to join to be successful in your quest. It also means you may have to accept salaries that are slightly lower than your expectation when joining industries that are hard hit by this monetary shift. If you are an employer, this may be a tough time for you. Remember that it’s even tougher on your employees, so some moral boosting and team building activities might be in order.