Ethiopia has developed its ten year perspective plan as an instrument for achieving its sustainable development goals. It has been deemed to be the pathway to prosperity in which the standard of living of the people would be enhanced. The plan has its baselines and assumptions with strategic pillars and macroeconomic goals. These goals have been the basis for sector development objectives of growth. It contained the Implications of pandemic diseases and necessary mitigation measures.
The perspective plan has also covered potential capabilities for achieving its goals with focus areas, including the production and service sectors. Factors that are enabling these sectors have been identified. The plan indicates balanced and competitive development at national, regional and local levels. It has also contained the means for monitoring and evaluation (M&E). Without M&E, macroeconomic and sector strategies may not be in place to ensure the effective implementation of the sustainable development goals of Ethiopia.
Well versed and capable inspectors of the Ethiopian Government ensure that activities are conducted in line with planned budget allocation. Every implementing agency has to be inspected for operating to achieve the sustainable development goal of the country. Implementing sector enterprises are given baselines with the assumption of poverty reduction targets. They are also provided data and information on the proportion of people living below poverty line.
Consistent with this information, the annual growth rate of gross domestic production is indicated in the ten year plan document. Each economic sector, including agriculture, industry and service sector, has its share of the overall rate of growth of the Ethiopian economy. Similarly, the plan indicates the share of the external sector, including import and export activities. It also shows the labor force participation or employment in each sector of the economy. The plan also reveals the assumption made on both urban and rural unemployment.
Ethiopia’s sustainable development plan is a means for generating productive employment in every sector of the economy. It also addresses youth unemployment through creating employment opportunities for both male and female job seekers in the rural and urban areas of the country. In the rural areas, declining per capita rural-land has created disguised unemployment, which may cause rural-to-urban migration of job-seekers. This trend contributes to an increase in the number of unemployed persons in the urban areas. This leads to macroeconomic imbalances that contribute to inflation and unemployment simultaneously.
The effort to generate employment through increasing the rate investment in every sector of the economy may require foreign exchange for the import of technological inputs. However, earning of foreign exchange requires technological inputs in the productive sector. This sector may be oriented to produce exportable items that earn foreign exchange. In other words, it is in a vicious circle of requiring foreign exchange to produce exportable goods that earn foreign exchange. This is a common phenomenon in most developing countries.
When countries are faced with shortage of foreign exchange, they are bound to borrow from international lending institutions. This leads to rising debt burden or chronic foreign currency shortage. This situation leads to structural adjustment, which lenders require from borrowers. In addition to economic crises, developing countries also become vulnerable to natural shocks such as climate changes, locust infestation, flooding, desertification, etc.
Both man-made and natural challenges deter the fulfillment of sustainable development goals by developing countries. The achievement of these goals is also affected by poor quality of infrastructure projects needed for economic advancement in poor countries, including Ethiopia. The low quality of projects leads to poor quality services in health and education. Also, low quality of education causes high repetition and dropout rates from school. A decline in these services negatively affects the economic development of African countries, including Ethiopia.
Remedial actions have to be taken to reverse slow growth and structural change. One of these actions is to reduce dependence on excessive aid and loan for financing infrastructural and construction investments. Also, it is crucial to expand manufacturing industry and modern agriculture which have high job creation potentials. To achieve these, it is necessary to remove weak institutional capacity as the main cause of all failures. Added to these remedial actions, it is crucial to provide quality services, including electricity, water, telephone, internet, etc. that enhance productivity. Such measures contribute to the creation of jobs that improve the living standards of the Ethiopian people.
Moreover, generation of reliable foreign exchange and debt sustainable national economic capacity is a guarantee for the growth of the Ethiopian economy. Completion of development projects and investment plans under public-private partnerships are critical for development.
There is a need to reverse low reward for meritorious workers whose productivity and effort contribute to economic growth. At the same time, there should be mechanisms for laziness, wastefulness and corruption. Corruption is a disincentive for productive workers and it encourages, absenteeism, abuse of resources, and indiscipline. Lack of management skills, productive use of resources and wastage lead to low productivity within enterprises.
Moreover, failure to make institutional change and transformation within the production and service sectors cause failure in achieving plan, program and activities of both the public and private sectors. With these economic realities, the government has been able to attract investors through designing economic policy that is favorable for investors. This policy focuses on sustainable increase in production and productivity in every sector of the economy. Efforts have been made to set a common national vision to achieve consensus among economic actors.
Ethiopia’s approach to achieve sustainable development is based on consensus and popular participation. This approach ensures prosperity through meeting the material needs of the people with dignity, equality and freedom. Economists stress on the need to focus on the physical, human and institutional capital for income generation and asset accumulation. They also stress the need for equitable access to education, health, housing, and other services for improved utilization of potentials of the country. They also focus on assets creation for economic expansion to meet the needs of Ethiopians. This requires unconditional access to the basic necessities of life, including food, shelter, clean water, basic health and education. Political scientists are of the opinion that economic, social and political participation without discrimination is basic human right.
Concerned Ethiopians should focus on the future overall affirmative action based on consensus. In line with Vision 2030, Ethiopia, which is an African beacon of prosperity, will have to emphasize on economic growth that raises the standard of living of its people. This measure presupposes participation and coordination of all economic and social sectors in the planning and development process. This coordination should ensure sector linkages with focus on multi-sector development. Of course, this development presupposes the full knowledge of Ethiopia’s potential for national development and growth. This potential may be explored with focus on solving institutional bottlenecks that may hamper progress.
Experts also emphasize resilience building, innovation and entrepreneurship for promoting growth. They also stress the need to ensure proper growth based on productivity and competitiveness. This is dependent on institutional transformation within the concerned government agencies.
The economic growth and development of Ethiopia requires efficient performance in both the public and private sectors. The critical role of the private sector in the economy should be given full recognition. It should, in turn, ensure equitable participation of women and children within its enterprises in the domestic economy.
Regarding the foreign trade sector, the government should increase its export revenues through measures that reduce production costs. It should also encourage import substitution by adopting modern tech and skills that reduce production costs. These measures require infrastructural development that link domestic production with external trade, including exports and imports.
The trade sector presupposes the availability of human resources that link the domestic economy of the country with the external ones. Producing highly skilled human power also depends on the prioritization of innovative production systems. These systems, however, have to be linked with incentives to promote production, employment, income, and government revenues. All these measure will guarantee sustainable economic development in Ethiopia.
Sustainable growth and development in Ethiopia is guaranteed through modernizing all the economic and social sectors. The creation of technological competences is a prerequisite for ensuring sustainable growth and full participation in the global economy. The economic growth of Ethiopia should, therefore, ensure full and equitable participation of all citizens in the process of the economic development of the country. This process guarantees improved standard of living of every Ethiopian.
In so doing, poverty would be reduced in the short-run and eliminated in the future. With increased production of goods and services in Ethiopia, inflation and unemployment would be drastically reduced if not fully eliminated. In this regard, the economic growth should lead to increased aggregate supply with focus on modern agriculture, industry and service sectors. This requires strong emphasis on exploiting the sources of growth through structural change.
Structural change ensures economic growth and development by raising production and productivity. According to social scientists, the strategic factors are building democratic and judicial institutions that ensure bargain, national consensus, and common vision. Also building private sector and competition friendly bureaucracy are important elements. They also propose the coordination with the society at large to make state institutions centers of excellence.
Social scientists also call for the coordination of social and religious leaders to encourage their institutions to contribute towards poverty reduction efforts. They also focus on the preparation of policies, strategies, programs, and legal frameworks for achieving prosperity in Ethiopia. They call for increasing focus on innovation and research, creating strong social security system and transforming institutions that enhance peace and security in the country. In so doing, Ethiopian government has registered some success in achieving sustainable development goals in the country.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald BY GETACHEW MINAS
THE ETHIOPIAN HERALD FRIDAY 25 APRIL 2025
