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Prime Minister Hailemariam Desalgen appeared in parliament last Thursday April 24, to laud the economic, social and political achievements over the past nine months. Even though it seem like just yesterday when the five year Growth and Transformation Plan (GTP) began in 2010, its transformative agenda sunsets just over a year from now, at the start of July 2015. Hailemariam says most of the goals will be accomplished and that it will become a model for other plans that will be designed in the future.
In his report the PM said that, over the past year, the results of the plan look promising and he expects most targets to be achieved. When all is said and done the PM expects the experience gained will make the next GTP (GTP II) even better.
Comparing the GTP to school he said that if a student answers eight out of ten questions they are not considered weak. In the past fiscal year the country’s GDP has grown by 9.7 percent, while the target was 11. The performance has occurred despite international and local challenges.
He said that the death of the former PM greatly influenced the development over the past fiscal year. Yet, he says the government has worked hard to mitigate that and other situations by implementing monetary and fiscal policies being applied to manage the inflation that has occurred since 2010.
The current multimodal transportation scheme which has been implemented with the goal of accelerating the country’s logistics making it easier to import and export goods was another factor impeding performance because its capacity was limited.
The investment share of the country’s GDP was 27.9 percent in 2010/11 but in the past fiscal year it grew to 33 percent. The government soon plans to expand power generation to 10,000mw.
New rail lines look promising and are progressing as scheduled. The national railway projects to be completed as part of the GTP are expected to consume USD 12 billion, 30 percent of which will be covered by local sources. Currently the rest of the funding, which is supposed to come from external sources, has been delayed, which has slowed down some of the construction. The railway from central Ethiopia to Djibouti is underway and the light rail for Addis Ababa should be finished by the end of the coming year.
The other projects planned to be undertaken in the GTP have been awarded to contractors and some of them are in the process of commencing. Money that the government was expecting from external sources for some of the projects has begun coming through. For example they have received funding for the Awash-Mekele-Tadjourah rail line.
The PM argued that the results show the GTP has been highly successful.
“If a good teacher gives ten questions to student and eight are answered properly the teacher can’t get upset and question why the student didn’t get all ten questions right. Just because a student doesn’t get a perfect score doesn’t mean they are a weak student. The teacher is responsible for showing ways to answer or to understand the two additional questions. In this manner, our government comes up with these strong questions and in the process of answering these questions the result needs to be encouraged. This is the way we need to look at the performance,” Prime Minister Hailemariam Desalgen said.
Some members of parliament asked if the GTP goals will be met on schedule. He responded that “80 to 90 percent achievement of the GTP goals should be regarded as highly successful.” He also pointed to the large number of new sugar factories as an indication of the progress being made.
Coffee exports went down by 25 percent compared with a similar period last year. However oilseed exports rose by 57 percent. Other agricultural exports like pulses, flowers and fruits and vegetables grew by 11, 7 and one percent compared with the nine months of the past fiscal year. In general agricultural exports grew by nine percent compared with the similar period last year. However, the performance of agricultural exports has not risen as much as needed in the targets of the GTP. This is largely attributed to coffee exports, which went down. The crop is a major source of hard currency for Ethiopia.
Even though the government planned to earn billions of dollars from manufacturing the sector has achieved far below what they had hoped. This year’s 11.4 percent result was far less than the target of 30 percent.
Gold exports were the other major product that failed to meet targets as exports of the mineral declined by 27 percent compared with a similar period last fiscal year. In general terms the country’s export during the first three quarters grew by 2.01 percent compared with last year and met 63 percent of the target set by the government. Livestock and meat exports significantly declined. The Prime Minister pointed out that the government is working hard to expand investments and exports to counteract the effects of the global price decline of gold and coffee.
From the total 100 billion birr target that the government planned to collect from taxes in the current budget year, it has achieved 77 percent in the nine months and has grown 26.2 percent compared with a similar period last year.
“From the total macroeconomic activities exports require special attention to fill the gap and register more achievements in the last quarter,” Hailemariam said.
Despite all the success the PM pointed to some say there is work to be done.