Ezana Sehay 05/23/2014

Ethiopians have witnessed an incredible transformation of their country in the last two decades spanning from 1991 – 2014; evolving from a pathetic state to its present status as dynamic and strong nation with considerable positive prospects.

The dichotomy of pre and post – 1991, Ethiopia, couldn’t be more axiomatic. Not often does a country emerge from a condemned “basket case” to become a real political and economic power in such a short time, but apparently, nothing about today’s Ethiopia is ordinary.

What a difference 23 years can make. To have a clear understanding of the path Ethiopia’s socio-economic sectors have taken place since May 28, 1991, it is worth visiting, albeit briefly, the government’s policies which brought about such transformation.

This is clearly becoming the decade of “Africa- rising” as the continent, for the most part registers formidable economic growth. At the heap of that pack of African countries whose common denominator is high rate of growth and expanding economy is Ethiopia.<

Furthermore, among these promising developing countries none exudes policy competency and consistency like Ethiopia. That is because, unlike those of other countries’, the Ethiopian leadership has demonstrated a willingness to engage in policy change should circumstance demand it.

Keep in mind, the country the EPRDF inherited is one that was a bankrupt; there was no economy to speak of and all the physical and social infrastructures were in ruins. The new government recognized the challenge of reviving the country from its terminal decline would need herculean effort; nevertheless, it was up to the task.

Consequently, during the first few years; in an attempt to lay the foundation for economic growth and expansion it entertained a variety of policy frameworks.

However, it realized some of the development policies and strategies prescribed by neo-liberal institutions had not been in consonance with the realities of developing economies like that of Ethiopia. Ergo at the end of the last decade; after evaluating the strengths and weaknesses of past performance, the government decided to restructure the economy.

Laissez-faire market oriented policies, wholesale liberalization and the privatization of all state enterprises (including strategic sectors, such as energy and communication), the mantra better known as the Structural Adjustment Programs, propounded by the WB and IMF have contributed to the further impoverishment of Africa and plunged many developing nations in to severe debt crisis.

Consequently, circa 2010-11, the government formulated a new pragmatic, proven and practical economic and social development vision for the country. It called it the Growth and Transformation Plan (GTP): it is an audacious national five year plan, which it hopes would address the deficiencies in the neo-liberal school of thought and offer a new vision and promise.

The GTP seeks to actively mobilize all stake holders; the government, the private sector, the public at large, and all the resources toward the achievement of shared goals. It is therefore, a vehicle of hope and inspiration for a better tomorrow. Its targets are bold: food-security; universal primary education; access to quality health services; universal access to safe drinking water; gender equality; high life expectancy etc.

The plan is, by the end of the 3rd GTP period (2025), to transform the Ethiopian economy from law productivity agricultural one to a semi-industrialized economy led by modernized and highly productive agricultural activity which will effectively be integrated and buttressed by supportive manufacturing and service industries in the rural and urban areas.

In other words, what is envisioned is; by 2025, the Ethiopian society will be a substantially developed one with a high quality livelihood that Ethiopia will have graduated from a least developed country to a middle income one with a high level of human development. For all intent and purposes; the plan is to create an egalitarian society.

Thereupon, to facilitate the successes of the GTP, the government has undertaken some major steps.

Good Governance: The government has demonstrated its commitment to good-governance and public accountability. It is embarked on an elaborate and far- reaching reform program which includes reform of the public sector to promote effective service.

As part of its policy to promote good governance, the government of Prime Minister Hailemariam, is committed to the war on corruption, which has seen some major casualties from high echelon of the government itself. By the way, that move came mainly as a response to a popular mood, often expressed in the private media.

Through the implementation of such national anti-corruption strategy, the government is trying to develop a culture of accountability and transparency.

The Private Sector: The government is adamant when it comes to its promotion of the private sector investment. To achieve a viable and vibrant private sector, it has put in place favorable policies and provides a promotive atmosphere and incentives for both local and foreign investors.

As a result, Ethiopia now has one of the most liberal and accommodating investment regimens in Africa.

Finance and Banking: Thanks to the economic liberalization, public monopoly in the financial sector is now a thing of the past. There are now more than 17 private banks. This in turn has created a fiscal stability. In addition, the insurance market has also been opened to private, including foreign participation.

Energy: We know Ethiopia is blessed with energy sources; hydro, solar, wind, geothermal, coal… the problem has been the lack of will and resources to exploit that immense wealth. This government is determined to change that. One of the important components of its energy policy is to elevate the national capacity by focusing on skill development; a sinqua non - for undertaking mammoth projects like that of the GRD.

Transportation: The government recognizes the prevalence of good transportation infrastructure is a key ingredient that attracts investment. Even before the launching of the GTP it has maintained and expanded the country’s essential infrastructure. Furthermore, the planned expansion of transnational and trans-regional expansion of rail way is going to take the country to a new trajectory. >

Manufacturing: The ultimate objective of the GTP is to make the country a hub for manufacturing in as short time as possible. The government is acting aggressively for the realization of this scheme, including going after those potential investors (such as; the Chinese shoes manufacturing companies and the Turkish textile sector), and persuade them to invest in the country.

Agriculture: Agriculture remains the largest sector in the economy with a modest annual growth. Nevertheless, the government is working on increasing production even more with innovative ideas and introduction of technologies. In addition, agronomists are hard at work in soil analysis of every region, in order to allocate suitable seed and fertilizer.


It has been four years since the government launched the first GTP period, so it is as good as a time as any to reassess the state of play.

When the government launched the GTP, there were a jamboree of armchair skeptics, who said it is too ambitious and a Tantalus cup.

To the contrary, according to the benchmark volumetric, the GTP has led to wholesale dramatic expansion of the economy highlighted by the increasing performances of the manufacturing and the service sectors.

At the root of the success is the balanced growth of local consumption and export oriented investment expansion; without divulging reasonable regulation, more leeway is accorded to market mechanisms to sustain the growth dynamics. The mantra of this approach is a mix of import-substitute and export-promotion.

So far the implemented policies which are fostering a pro-business environment have lessened the country’s commodity dependence syndrome as the government revised its approach and gave equal weight to domestic consumption and trade. That has dramatically enhanced Ethiopia’s stature as a choice of destination for foreign direct investment (FDI), which are stimulating wider development objectives through links with the rest of the economy.

The increased attention the government has given to improving the country’s infrastructure, especially the transport and energy sectors has in return created a favorable business climate that is beginning to attract the kind of investment that is needed for the economy to take-off. Business confidence remains strong, capital continues to pour in, and the dual prospect of growing energy output and regional economic integration is heralding Ethiopia’s arrival on the world stage.

All the while, the government’s macro engagement in the economy is focused in building self-sustaining industry. The establishment of amalgamations likes the Metal and Engineering Corporation (MeTEK), has enabled it to undertake highly complex projects free of foreign constraints.

Ethiopia’s long- term development plan is indeed profound. The economic and social development’s objective of a sustained acceleration in the rate and pattern of growth has continued. That has ensured a strong impact on poverty alleviation through employment creation and income generation.

The persistent global economic slowdown has had some effect; it has led to some growth retrenchment… as a result growth, for this year has moderated to 9.7% from double digit, but the government is not taking its adverse impact lying down. It is countering it by good policy decisions and strong political leadership; Wheels are put in motion to circumvent the problem and maintain the economy’s steady growth

That has been achieved through the continuing effective macroeconomic management, selective policy intervention to accelerate growth, provision of public service that enhances human potential (i.e. education, health, water, housing), efforts that ensure the economic opportunities for the poor.

This growth according to UNDP and the WB is mainly due to improved performance in the sector of agriculture, infrastructure, manufacturing, service and mining. According to the aforementioned regimes, such is a pro-poor economic policy.

In his address to parliament, on April 24, Prime Minister Hailemariam, stressed the economic growth is on track. He said most goals of the first GTP will be met by the end of the period (2015), and the country is indeed moving on the right path.

The first sovereign credit rating grade of “B” accorded to the nation recently by the major rating firms is an important endorsement of PMHD’s statement.

Yes, much has been achieved; most of the problems of that dark era are in the rearview mirror. But undeniably, there is still a lot to be done. However, experts concur that despite being an emerging economy, the country’s potential is stronger than ever and the policies of the government are sure-fire.

The country’s progress on several social metrics of the Millennium Development Goals (MDG) is exemplary. The foundation for inclusive societies, dynamic economy, improving income equity, economic mobility, vibrant and pluralistic markets --- an essential momentum to maintain social harmony is intact.

In short, Ethiopia is at a crossroads. Thanks to a government strongly committed to structural economic and political reform; stimulating domestic entrepreneurship, and attracting long-term foreign capital, it stands a good chance of unleashing its economic growth potential even further.

More importantly, looking in to the zeitgeist of today’s Ethiopia:

ü  Social conditions such as peace, health, education, and living standards...

ü  Subjective well-being measures; social activism, political participation, inter-personal relationships, personal safety, public confidence, national perception, and the arts as a reflection of contemporary life, (society’s evaluation of its livelihood), and

ü  Economic indices, in the country indicate the prevalence of a vibrant social capital.

No wonder Ethiopians both inside and outside the country; in addition to displaying reverence for the milestone, are confident that their beloved country, will not only realize its immense potential as stipulated in the GTP , but come 2025, celebrate it at its apex – both economically and socially.

Shout- out to Genbot 20!


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