Ethiopia planned its 10 years perspective economic plan and has been implementing for the last two years and will continue up to 2030. The plan was prepared by the Ministry of Plan and Development.
According to the Minister, Fitsum Assefa (PhD), the plan has a motto, “Making Ethiopia African Beacon of Prosperity”. As to her, agriculture plays pivotal role in the nation’s economic growth and the poverty reduction scheme. But to unleash its huge potential by enhancing production and productivity the challenges witnessed in the sector must be resolved.
The government is endeavoring to make the sector playing crucial role to ensuring food security; substitute imported foods; and boost its foreign currency earning capacity. Considering this lofty idea, in the last three years reform works had been implemented in the sector. As to the Minister, the sector in the past did not get sufficient attention in the aspect of finance, foreign currency, and technology that used as inputs. Therefore, to reverse the situation, in the last three years special loan which ever had in terms of amount has been allocated to the sector.
In addition, budget also allocated to institutions which have stake in agriculture to expand irrigation farms both in the low and high land areas of the country.
The collateral requirement put as criterion to get loan from Banks in the past has been a constraint to the agriculture sector. Similarly, pastoral community was inhibited to secure loan from banks because of the collateral requirements. But now implementation of the new economic reform has enabled to halt all constraints and by now both sectors could obtain loan from banks by using their movable assets as collateral. Therefore, financing the sectors could be possible.
The other measure that have been taken to modernize agriculture is utilization of technologies such as tractors, machinery, milking machines and other inputs could be imported free of tax.
New farming techniques that can improve the productivity of the sector also introduced and among others farming in cluster way can be mentioned. In the past, small holder farmers claimed that the smallness of their plot inhibited them from raising their productivity and production but the cluster farming technique could break that thinking and increase their production.
To that end, the provision of extension service to farmers played pivotal role for the registered achievement. In Bale and Arsi zones of Oromia region and in western and eastern Gojam zones of Amhara region, undertaking cluster farming scheme could be cited as the farmer’s success in rising production.
In addition to these, through implementing the summer irrigation farm, raising wheat production could bring tremendous result. The venture by now plays pivotal role in stabilizing the market which face shortage of supply. It also plays its own role in ensuring food security. For all these achievement, as to Fitsum, the credit goes to the homegrown economic reform plan.
According to studies, from 2011 to 2020 the agriculture export plan accomplishment was 73.8 percent; manufacturing 12.2 percent and mining was 11.2 percent. Asked what plan was drafted to boost the export in terms of kinds of products and value addition, Fitsum replied that a given economy growth, development and modernity depends on the achievement in bringing structural change.
The structural change manifests itself in modernizing agriculture, manufacturing and mining because they are core economic activities among others. Besides, the stranded labor suffocated in the rural part of the country must be shifted to none farming sector which has high productivity capacity such as manufacturing. Agricultural products also must be supplied to the foreign market not in the raw form rather, with value addition. The mining sector also should supply its products to the industry to be used as inputs. The creation of job and the income obtained in such activities boost the nation’s economy and improve citizens’ living.
During the EPRDF time in the past, there were plans to bring structural change but was not successful. The producing industry, in fact, has its own limitation in terms of competency. The level of its value addition on agricultural products has not shown progress as expected of it. Adding an insult to injury, industries import 70 percent of their inputs that cost them high amount of hard currency while using very little inputs from the local sources.
The other weakness that should be mentioned is the great significance of forward and back ward linkage between the heavy and small industries. Such situations will leave the economy to be vulnerable to spontaneous shock.
Similar to the agricultural sector, in the 10 years perspective economic plan, priority is given to the manufacturing industry sector. The government has an ambition to raise the sector’s productivity and its competency in the international market.
As to Fitsum, Ethiopia is endowed with abundant natural resources and 100+ million populations. Thus, through tapping such huge resources, the industry will be the source to create wealth in the coming 10 years. However, in the past two years, due to the outbreak of COVID 19 and the war in the northern part of the country, Ethiopia could not obtain the necessary financial support from partners. Some western countries, by ignoring atrocities committed by the Terrorist TPLF, blame Ethiopia blindly as if it violates human rights and halt their support. On the other hand, unless Ethiopia develops modern and competent industry at the international level, achieving strong economy could be an attempt to reach for the stars. In line with this, creating viable job opportunity for hundreds of thousands is impossible. Commendably, various works still have been done by the Ministry of Industry to modernize the manufacturing sector.
There are also tangible results registered by the sector’s good performance. For example, industry accomplished its 80 percent of plan in the last 9 months. The export sector also obtained 400 million USD in the last 9 months. While the nation has come across sever political turmoil, the achievement when evaluated, it is remarkable. The sector suffered a great lose at the international level due to the outbreak of COVID 19. In such a situation, industry parks play pivotal role to boost the export earnings. But more has to be done in the coming years for the reason that the industry contributes only 12.2 percent for the export earnings yet.
The 10 years perspective economic growth plan targets to raise the contribution of the manufacturing sector to the GDP from 6.9 percent to 17.2 percent by the year 2030. It also intends to enhance the sector employing capacity from the current 5 percent to 15 percent. Asked whether the plan is achievable or not, Fitsum noted that industrialization needs cultural change which takes long time. The industrial revolution broke out in 18 century in Europe had been under gone up to the 19 century and that cumulative efforts made the western countries to reach the economically advanced level currently witnessed. And for such development the Cultural Revolution played its own determinant role.
She further said that, development could not be achieved over night it rather needs a century long struggle and commitment. It needs creativity, imitation, patency, profound knowledge and more over industrial culture. Hence, when talking of industrialization as to her, it is essential to ask when Ethiopia did begin industry production and the response is less than 100 years, which lasted for very short time. Therefore, acknowledging this is essential.
However, with regard to achieving the plan, first looking the vision and the plan vitality is essential. There were various economic policies formulated by successive regimes; so that looking into their strength and weakness is essential to gain lesson for improving the weakness while scaling up the strength.
As to the Minister, following in depth observation of the plan the 10 years perspective economic plan, consensus has been reached by all the stakeholders that the industry must play a backbone role for the nation’s economic growth. Moreover, creating forward and back ward linkage between small scale, medium and large industries has been underlined.
Providing sufficient inputs to the industries mostly from local sources got emphasize. Therefore, it can be said that the plan is achievable.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD THURSDAY 26 MAY 2022
