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Look north, to Ethiopia, for progress

Friday July 6 2018

Textile factory in Addis Ababa

Workers at a modern textile factory in Addis Ababa, Ethiopia. As we debate the ‘handshake’, counterfeits, contraband, NYS heists and if the corrupt deserve the guillotine, the polygraph or State commendation, our Ethiopian neighbours are destined for greatness. PHOTO | FILE | NATION MEDIA GROUP 

KENNEDY CHESOLI
By KENNEDY CHESOLI
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According to the United Nations, least developing countries are fragile, vulnerable and exhibit the lowest indicators of socioeconomic development. They are the poorest and weakest, dependent on foreign assistance for their survival.

Ethiopia, our northern neighbour, belongs to this group.

Besides, Ethiopia is disadvantaged by the lack of territorial access to the sea.

Landlocked countries spend twice as much on importing or exporting merchandise than their coastal neighbours and it takes twice as long!

In 2000, Ethiopia was the poorest country in Africa with a per capita income well below that of Burundi and Central African Republic.

With an unfavourable climate and challenging landscape, Ethiopians have endured many devastating famines — the worst in 1983-1985 that killed 400,000 people.

KENYA'S OUTPUT

Twenty years ago, Kenya’s real economic output of $14.1 billion (Sh1.4 trillion) was nearly twice that of Ethiopia. We produced $6.2 billion more goods and services than them.

When a 2016 IMF report indicated that Nigeria had dethroned South Africa as Africa’s biggest economy there were serious questions, especially about long-term economic implications for Sub-Saharan Africa.

In 2015, Ethiopia had became the largest economy in the greater eastern Africa. Last year, Ethiopians produced $5.6 billion more goods and services than Kenya.

Benjamin Franklin, the sixth President of the United States, said, “If you fail to plan, you plan to fail.”

Ethiopians have mastered the art of economic development plans. Eyeing middle-income status by 2025, they, in 2010-2015, implemented the Growth and Transformation Plan (GTP), a medium-term strategic framework with poverty eradication at the heart of it, after extensive stakeholder consultations.

IMPOSSIBLE TO FINANCE

According to the United Nations Economic Commission for Africa (Uneca), countries looking to end poverty require a sustained annual GDP growth rate of seven per cent. Ethiopians set a target of 11-15 per cent!

The World Bank and the IMF dismissed the GTP as misguided and impossible to finance.

In a joint assessment, they said while only a few countries had achieved a consistent double-digit growth, Ethiopia lacked the capacity.

They warned that GTP would severely damage the economy and advised Ethiopia to restrict its ambition to a “robust” growth of 7-8 per cent.

Then, The Economist declared the Ethiopian government “one of the most economically illiterate in the world”.

'VOODOO ECONOMICS'

A cynical US-based Ethiopian professor, Alemayehu Mariam, dismissed its intentions as “voodoo economics” and projections as “hyperbolic, based on fabricated and massaged numbers”.

But Ethiopia nearly hit its target with an average GDP growth of 10.6 per cent with double-digit growth between 2010 and 2015 except in 2012 (8.6 per cent).

It had the fastest per capita income growth in Africa, and probably in the world. Despite its population of more than 100 million, real GDP per capita grew by $42.77; Kenya had $14.54.

Ethiopia may have lifted 10 million people from extreme poverty.

RICH GET RICHER

A Uneca report found it to be the only country in the region where income inequality was falling while in Kenya, one of the most unequal in Africa, the rich were getting richer as the poor became poorer.

Ethiopia made progress on other fronts as well. Ethiopian Airlines became Africa’s largest and fastest-growing carrier.

Air freight data for 2010 shows Ethiopia holding a slight edge over Kenya, of 127 million tonnes, reaching a new peak of 2,076 million tonnes last year, when we handled a mere 254 million tonnes of freight cargo.

In 2010, Kenya had nearly 700,000 more passengers than Ethiopia; in 2015, seven million passengers were using Ethiopian airports — up from 3.3 million in 2005. Last year, Ethiopia outpaced us by 4.6 million passengers.

MAJOR REFORMS

Ethiopia is implementing its second GTP. And in Abiy Ahmed, it has Africa’s youngest Prime Minister, who has announced major reforms — including privatisation of some State-owned enterprises — and signalled a commitment to a political settlement with neighbouring Eritrea.

The Grand Ethiopian Renaissance Dam on the Blue Nile, to be completed soon, will be the largest hydroelectric power plant in Africa. Also, Ethiopia is expected to join the WTO.

In contemplating President Uhuru Kenyatta’s ‘Big Four’ agenda and our opaque planning, a few questions came up. Is this a personal initiative, short-term plan or part of Vision 2030? Were stakeholders consulted? Have we the resources and capacities?

As we debate the ‘handshake’, counterfeits, contraband, NYS heists and if the corrupt deserve the guillotine, the polygraph or State commendation, our Ethiopian neighbours are destined for greatness.

On inspiration, planning and setting national ambition, we will do well to look north.

Mr Chesoli is a development economist and global policy expert in New York. [email protected]

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