Ethiopia has gone through reforms in all sectors for the past six years. The reform system served to relax the nation’s political, economic and social spheres and now is the time to commence revival as a state, Prime Minister Abiy Ahmed (PhD) said yesterday while attending the 3rd regular meeting of 4th year of the 6th House Of People’s Representative (HPR) and responding to the questions raised by members of the parliament.
National revival, as to the Prime Minister, is emerging with sustainable idea, transforming the idea into practice and obtaining the outcome. The economic reform recently began is among the driving forces that effectuate the national revival initiative.
Contrary to many doomsayers’ wish to see a failed state and their evil intent, the country is beginning a time of revival, the Premier stressed.
Ethiopia’s Gross Domestic Product (GDP) was 8.1% last year. Many are amazed by this success and asked if the country was drilling petroleum as such success is not common for countries that have no oil. This year, Ethiopia’s economy is set to register 8.4% GDP. Though last year’s performance was the biggest in Africa, it is not sufficient for Ethiopia compared with its potential and its national ambition.
The country has registered remarkable progress in all economic sectors. “We are in the first phase of the year where we will complete reforms in different sectors and start working on the revival. Therefore, in the present fiscal year, we will see a drastic change in all sectors. We have to move forward to tomorrow leaving the past behind,” the Premier said.
Benchmarking the past year’s success, the agriculture sector is expected to grow by 6.1%; cultivating 30 million hectares of land and harvesting 1.4 billion quintals of crops. The growth in agriculture seems small in figure but as the sector’s base expands, the total growth in number seems minimal. The targeted growth expected to be registered this fiscal year is from different subsectors of agriculture like grains, cotton, and horticulture among others.
The country expects 6.6% growth from crops alone. Wheat, for instance, will be cultivated on 8.4 million hectares to harvest 30,000 tons or 300 million quintals by producing nearly 40 quintals per hectare, as to him.
‘Yelemat Turufat’, that engages majority of the people has become a sector with promising growth in a short period of time which is expected to grow by 5.4% this fiscal year. This sector includes animals’ Hybridization and nurturing millions of chickens. The capacity to produce 12 billion liters of milk, 8 billion chicken eggs and 218 thousand tons of meat and 297 thousand tons of honey is created.
Coffee and tea sector is also among those shown drastic progress since last year. Compared to the past years, 1 million quintals has been recorded in coffee. By now, Ethiopia is third coffee producer next to Brazil and Vietnam. Extensive work is underway to make Ethiopia the 2nd coffee producer in the world.
Alike coffee, tea needs process before export and effort is being exerted to engage private investors to the sector. Though it is not enough for the highland country conducive for tea cultivation, 20 investors have made agreement with government to enter tea processing. The government’s ambition is to make Ethiopia among the prominent countries in tea production, the Prime Minister said.
As part of agriculture sub sectors, oil seeds production is given special attention by the reformist government. The nation’s growth is inevitable with the expansion of the agriculture sector and marketing value added products.
As to the Prime Minister, agricultural inputs provision is essential to attain the outcome sought. To this end, extensive work is underway in provision of fertilizer conducive for the soil type and best seeds in all kinds of crops.
“Great job is ahead of us in providing machineries and expanding irrigation in order to upgrade quality product via increasing productivity in a limited space,” he explained.
The Prime Minister further explained that in the past years, a lot of work has been done to stimulate the industrial sector by the Ethiopian Manufacturing Movement. Especially, a better work has been done in solving the problems that were arising with the power supply. Currently, the production capacity of industries has been reached 67%. It is expected that the industrial sector will grow by 12.8% in the budget year.
In this regard, ‘Ethiopia Tamirt’ or ‘Made in Ethiopia’ initiative has played pivotal role. The movement brought satisfying outcome. A great lesson is gained on how to achieve better. Effective utilization of industrial parks has taken the lion’s share for the booming of manufacturing sector. Local investors have occupied 50% of the industrial parks. Import substitution has emerged notably. In relation to defense force, for instance, many types of equipment are manufactured locally.
Among the three economic sectors, service sector is expected to grow by 7.1% this fiscal year. Air transport service is recording dramatic change in this regard. Movement has been started to build the biggest airport in Africa. This new airport will also accommodate 100 to 130 million passengers per year. “At present, we have decided to buy 124 new airplanes. This will make Ethiopian Airlines not only the largest airline, but also the largest airport owner in Africa,” the premier said.
For landlocked countries like Ethiopia, expanding air transport is essential. Therefore, accelerating the number of aircrafts and constructing large airports are rewarding.
The nation’s effort in macro-economic reform, according to the prime minister, is remarkable. Previously, the economic system was much closed. This has been making Ethiopia not to use as much as it should in foreign trade. From now on, the macro-economic development will lay the foundation for Ethiopia.
Following the reform of the macro-economy, the government revenue has increased significantly. 180 billion Birr has been collected in the last three months. This is a better growth compared to the same period of the previous fiscal year. In the first three months of the past fiscal year, the revenue collected was only 109 billion Birr. But when compared to its Gross Domestic Product, Ethiopia is still a low income country. This should improve further, he said.
As a result of the macro-economic reform, in the past three months, a USD 1.5 billion revenue has been received from expenditure trade. “If we continue with this performance, at the end of the fiscal year, revenue of more than USD 5 Billion will be received. This is an increase of 1 billion Dollar compared to the previous year,” he said.
Especially, the macro economic-reform has brought a big difference in the gold production. In the last three months, 500 million Dollar has been earned from gold trade. This shows how much gold production was exposed to illegal trade previously. In coffee production, 2 billion Dollar is expected in the budget year.
Foreign direct investment has increased by 6.4% of the macro economy. The works that have been done especially by creating an environment conducive for investment are creating a great potential to attract investment. Ethiopia’s land and renewable clean energy and man power have made it the best option for investment. The macro-economy has also opened a way to utilize this investment potential.
Regarding the flow of foreign resources, over the past three months, 3.4 billion Dollar has come from foreign countries to Ethiopia in different ways. Compared to the same period of last year, there is a huge increase. In the first three months of the last fiscal year, the amount of money that came from foreign to Ethiopia was 400 million Dollar. In total, 27 billion Dollar is expected to come to Ethiopia during the reform year.
In terms of burden of debt, the government has not taken any commercial loan in the past six years. Ethiopia’s debt burden has been reduced from 30.6% to 13.7% in comparison to the GDP. In the coming years, it will be done to reduce this figure below 10%. In the past six years, 13 billion Dollar debt has been paid. This is not a cure, but it helps to pass on wages to the next generation than debt, the premier underlined.
He further said that the reform of the macro-economy has saved Commercial Bank of Ethiopia from collapsing. The commercial bank has gotten 900 billion Dollar extended bond. The success of Commercial Bank of Ethiopia is motivating all the local banks. Currently, the banks’ deposits have reached 3.5 trillion Birr. The number of banks has reached 32; 50 million customers in Ethiopia have mobile phones. Banks have just taken advantage of it.
“We can overcome the cost of living sustainably by increasing productivity. Upgrading the business system is also of great importance,” the Prime Minister said.
The government has allocated 300 to 400 billion Birr subsidy to prevent the cost of living burden on the poor citizens. Sharing of meal, school feeding and Sunday markets are part of the government’s effort to help the poor. Nationwide, 249 thousand disadvantaged citizens have been provided with housing. This is a work done by the government by coordinating investors. The inflation rate has been reduced to 17% now; bringing this down to single digits is a priority of the government.
It is planned to create employment opportunities for 4.3 million citizens in the budget year. Out of this, it is planned to create overseas work compatibility for about 700 thousand people who have been trained in the last three months. Remote jobs including coding and data analysis has also been created for 26 thousand citizens, Prime Minister Abiy said.
BY BACHA ZEWDIE and ADDISALEM MULAT
THE ETHIOPIAN HERALD FRIDAY 1 NOVEMBER 2024
