Economic forcast of world’s known economists incdicated that Ethiopia’s economy has proved its resilience amid droughts that had hit the agricultural sector, and the impact of the 10-month long state of emergency on tourism. They confirmed that fiscal parameters and the country’s external position have remained reasonably under control.
IMF had also testified that the government interventions to mitigate the social impact of the drought, in collaboration with development partners, were timely and effective, thus managed to limit its human cost and prudent budget execution led to a lower-than-planned fiscal deficit, estimated at 2.5 percent of GDP.
The speech of FDRE President Mulatu Teshome, made last October about nation’s performance, could be further corroborated by the forecast of giant institutions (like IMF and WB). He had said that Ethiopia had gained 10.9 percent growth last fiscal year (2016/17). It showed strong recovery of the economy (amid the drought that left millions of people to aid dependency and the reduction of prices at the global market for agricultural products).
Nation has also planned double-digit growth for the 2010 Ethiopian fiscal year (2017/18). He indicated that the agricultural sector has contributed 6.7 percent to the economy. Similarly, the industrial and service sectors had shown 18.7 percent and 10.3 percent growth, respectively, he stated. Howerver, drought and armyworm that affected some parts of the country had malised performance of the industrial sector.
Last year, the economy had generated tremendous employment opportunities (though a drop in an ocean when compared with the huge demand of job seekers).And close to 4.5 million jobs were made avialble to women and the youth in the same year.Overall, the country has made a significant stride towards realizing its vision of economic transformation (indeded a sea of change is needed to significantly alleviate poverty and improve the living status of millions of citizens).
Currently, Ethiopia has eyed to register an eye-popping 11.1 percent economic growth this fiscal year.To this end, nation is industriously working to scale up performance of various economic sectors including the over 62% completed GERD. Inaddition, it is working to fully utilize the Ethio-Djibouti railway, whet more FDI investors, expand tourist attraction services and facilitate more private sector involvement and investment.
However, seeing the significance of good governance to catalyse economic growth, nation has pledged to reinvigorate the battle against maladministration, rent-seeking and corruption, adopt proclamations to strengthen the federal system, reform the electoral system and make this year’s local election democratic and fair; boosting the deep renewal program and registering ground breaking achievements to satisfy the greater public.
No doubt, economic growth is simply an increase in the amount of goods and services produced in a given country over a given period of time; it is commonly measured through Gross Domestic Product (GDP). But, Economic development refers to the sustained improvement in living conditions, citizen’s self-esteem, meeting of basic needs and enabling of a free and just society.
Hence, based on the above criteria, it is beyond argument that the GDP of Ethiopia has been growing at a notable growth rate over the past decade; recent report issued by IMF had ranked Ethiopia among the five fastest growing economies in the world, only next to Bhutan – 11.1% as top performer; outpacing Ghana – 8.1%, Cote d’Ivoire – 8.1%, and India – 7.7% (over the next three years, small emerging economies like Ethiopia are forecast to outride the likes of China and India in terms of economic growth).
Similarly, many economists have sensibly recognized that the coordinated effort of the government, people and private investors is bringing miraculous economic growth (though some argue that the economic growth is mostly spearheaded by the service sector, and even many more are still stating that growth in Ethiopia is being spurred by the massive expenditure of governmrnt on infrastructure). What soever the case, the development being witnessed in Ethiopia is effecting sizable changes and tangibly changing the lives of millions of citizens.
A case in point, especially, Addis Abebans are enjoying many life-easing infrastructures including light city rail way, clean lanes and cobble stone roads, hospitals and clean living quarters of condos( though few rubbished it as meager comparing it to the millions of homeless citizens in Addis Ababa). Other residents living in the towns of various regional states are also enjoying same infrastructures except light railway.
Tangibly, Ethiopia’s economy has experienced strong, broad-based growth averaging 10.5% a year from 2005/06 to 2015/16, compared to a regional average of 5.4%. The expansion of services and agriculture accounted for most of this, with manufacturing growth only modest. Private consumption and public investment explain demand-side growth, the latter assuming an increasingly important role. Higher economic growth brought with it positive trends in poverty reduction in both urban and rural areas.
Particularly, these days, the construction of many industry parks across the country is expediting incredible change in attracting FDI investors, creating employment opportunities for thousands of jobless youth, alleviating poverty and expanding services like transport, among others.
Forinstance, the construction of Hawassa industry park enables to turn over USD one billion (890 million euros) annually and provide employment for more than 60,000 people. The park has modern halls where leather and textile products will be produced for the European and American markets (it is also equipped with modern waste treatment plant that has a capacity of zero-discharge).
Currently, numerous industry parks are being constructed across the country.Some are finalized and have started production, while some are underconstruction.Hence, up on finalization, the industry parks are expected to attract more FDI investors, create thousdands of job opportunities,alleviate poverty of citizens and scale up economic growth of the country.
Contrary to this amazing change, documents testify that 55.3% of Ethiopians were living in extreme poverty untill 2000. But thanks to strenuous effort to alleviate poverty, this figure has declined to 33.5% by 2011 and it is also expected to decline greatly since then. Nation is implementing the 2nd Growth and Transformation Plan (GTP II) which will run to 2019/20.The Plan aims to continue work on physical infrastructure through public investment projects, and to transform Ethiopia into a manufacturing hub; growth targets have envisaged an annual average GDP growth of 11%. In line with manufacturing strategy, it also hopes the industrial sector will grow by an average of 20%.
The outlook for the next five years is bright. In its latest global forecast, the IMF projected that Ethiopian GDP per capita would continue its expansion through 2022. It stressed that any country making such progress would have a good cause for celebration, but because of its size, swelling population, and the depths of its poverty, Ethiopia’s gains are particularly heartening(among countries with 10 million or more people, only India and Myanmar are expected to grow faster).
However, some say double-digit economic development should pay attention to the holistic developments of citizens and meaningfully changing their lives. Recognizing development to benefit the grass roots as the basic building block of a nation would help see a thriving country (a healthy social fabric can be created if the development Ethiopia pursue goes hand in hand with community enhancement).They argue growth (and development) could be acknowledged when ordinary citizens smell, touch and feel the success, not when they read statistics.
They complained that large infrastructure investments should be directly related to ordinary citizens, contrary its strong and positive tie with business tycoons. So, for an ordinary citizen confronted with with the discomforting daily struggle to survive, owing to lack of employment, food security, and self-sufficiency, the development narrative will not hold water (the allegation further extends to high-rise buildings in the capital we appreciate so much and the ordinary citizens we pity down below; the main beneficiaries of this type of development are busy and greedy investors paying the least possible to their employees).
In the contrary, Ethiopia is known for its pro-poor development policies and strategies.The development and growth that has been registered until to date is materialized due to the governments attention to its poor citizens.Statistsics indicated that Ethiopia is among the foremost countries that realized equitable development, due to the huge expenditure of the government to expand basic services to the benefit of the grass roots.
So far, the country’s economy has been blooming resiliently amid challenges and Ethiopia has realized justifiable economic development that could be equually acccesed by all citizens. For instance, the development activities being carried out in pastoralist and semi-pastoralist areas are almost on par with same activities being undertaken in the hinterland, unlike the previous regimes that neglected inaccessible areas and caused unbridgeable disparity of development between different regions.
Currently, the equitable development trend being persued by the country is making all citizens equal participants and beneficiaries as well (with out any segregation, thanks to the workable federals system that enables to realize equal development among all regions). The disparity encountered between few individuals and the society is not widely aggravated compared to other countries that followed free market economy not regulated by discretion and reasonable interference of the government for the sake benefiting the greater public.
Until todate, the government has played its own active role to make the trend of the economy suitable to ordinary citizens and help them thrieve and make their living in the system. Nation believes further efforts should be exerted to effect more development that could benefit all citizens in a meaningful manner and alleviate poverty in appreciable level. To this end, extensive use of public-private partnerships, private concession and facilitation of more friendly environment for extensive private investment would be employed to help conjure stunning development that can lift citizens from rock-bottom poverty.