BY ABEBE WOLDE GIORGIS
Since the coming of Prime Minister Abiy Ahmed to power, the Junta was the number one trouble maker in the nation’s political and economic system. Fortunately, the recent demise of the Junta brought hope and yet there is also threat from some insurgents. Evidence indicates that the Junta’s founder Sibehat Nega had been smuggling USD 100 million to overseas annually.
Shiferaw Adilu who is an economist said that before the emerging of the reforming government the economy was mismanaged. The claim that the nation was registering two digit economic growth was extremely exaggerated. The nation’s wealth was uninterruptedly looted for decades; as a result, the economy was plummeting downwards.
During the reform period the government to some extent enabled the macroeconomy to stabilize. As compared to other African countries experiences, the inflation witnessed here is not unmanageable. Unemployment is a serious problem but there is no clear information whether the number of unemployed people correctly registered or not.
The political conflicts flared up here and there in the past could aggravate unemployment, because eviction can make people out of work.
After coming to power, the visit made by Prime Minister Abiy Ahmed in the USA and his discussion with Ethiopian diaspora brought hope. Such practice was unprecedented because in the past, leaders made talk only with their supporters.
Later after a few months, conflicts that were being sponsored by the defunct TPLF broke out in the various parts of the country. And the government took much time in containing conflicts; as a result, it became unable to afford paying attention to the economic spear. If the government had not taken strict measures in adjusting the economic policy, the problem would have been beyond control.
In fact the government steps to reform the economy. Its approach was in a fragmented manner; this again brought its own drawback to unleash the nation’s potential. Hence, to bring a long lasting solution at the macro-economic level, planning and implementing a new road map is vital.
Recently, the government introduced three years long homegrown economic reform and again the ten years economic plan that brought a glimpse of hope. And both are management tor and indicate the policy directions. Side by side with these measures, the effort to strengthen privatization is encouraging though it is slow to some extent.
The privatization of Ethio-telecom and sugar corporations has undergone slow pace but the startup is welcoming. In fact as mentioned, the government pre-occupation in containing insurgencies forced it to pay less attention to the economic front.
The upside down witnessed in the politics also affected the private sector not to move in its full inertia. Political instability occurred in Tigray,Oromya and Beneshangul
gumuz regions negatively affected the nation’s economic performance. But the problems are inherited from the past regime not by the incumbent.
The parks constructed in the city play a crucial role in stimulating the economy. The announcement of the Ministry of Mine and Energy with regard to the exploring and exploiting of oil in the Ogaden area of Somali region by the US Company is also encouraging; but the unraveling of the current situation of the project might lead the public to skepticism. Hence, providing clear information to the public is essential.
As to Shiferaw, the ongoing construction of GERD, though it faced political impasse due to the lower riparian countries adamant stance towards the tripartite negotiation, the successful accomplishment of the first phase water filling is encouraging.
Zelalem Teklu (PHD) is an economist. As to him, during the dawning of the change, he expected that things were going smoothly but abruptly began to go to the unwanted directions due to the flare up of ethnic conflicts sponsored by the Junta in various parts of the country.
However, though the situation was inconvenient the measures that have been taken to reform the economy brought better results. The reform could attract foreign partners and enable the government to obtain up to 10 billion Dollars in the form of loan.
The economic reform has important and valid objectives particularly to address various problems in the related with the macro economy and among others to mitigate unemployment, inflation, scarcity of hard currency.
It should be understood that, exporting agricultural products with value addition enhances the competitiveness of the products. Some efforts are under going in this regard but it is still in its premature level; hence, scaling up the effort is essential.
With regard to privatization as to Zelalem, currently privatizing the Ethiopian Airline is not a possible option because the organization showed its efficiency and competency. The absence of local management capacity necessitates privatizing public enterprises. Bringing foreign companies in the economy enables us to enhance capacity.
The partial privatization of Ethio-telecom makes the organization more competent locally and internationally. The endeavor enables the nation to attract and obtain more foreign currency which shore up the scarcity. The announcement of the bid winning companies is also encouraging.
As it is known, agricultural products are the major export earners but to obtain more currency from the outside market, enhancing their competitiveness is essential. Products such as coffee and sesame are supplied to the outside market. \
Hence, the nation has to improve the productivity of these products in order to increase earning hard currency; this can be successful if the economic reform focuses on improving the quality of products supplied to the outside market.
The Ethiopian Herald March 13/2021
