The Ethiopian People’s Revolutionary Democratic Front (EPRDF) 10th congress held under the theme: ‘To live up to peoples’ trust: Utmost growth and transformation’, concluded with the election of old faces on the leadership.
The congress discussed several issues including the state of political, economic and social progresses in the country. The rent seeking attitude, lack of good governance and corruption were also topics that dominated the discussions on the first day.
Emerging border conflicts between Amhara and Tigrai regions was also another issue that was recalled at the congress. Representatives of the two elderly national organizations, Amhara National Democratic Movement (ANDM) and Tigrayan People’s Liberation Front (TPLF) who lead the two regions respectively, stated that both organizations will jointly work on the issue, according to the participants who attended the closed session.
Of the challenges discussed by party officials and invited guests, the need for good governance has been an issue that headlined the agenda. The congress said that lack of good governance has become a serious challenge to the country’s growth and it urged leaders to work on solving the problem immediately.
The rampant rent seeking attitude and corruption were other burning issues that topped the agenda. According participants Capital had interviewed at Mekelle, these issues were deeply embedded in the government’s bureaucracy.
The participants also said that the national organization is lenient, and hesitant to make firm decisions to tackle narcissism at the leadership level. “Some leaders of the party and the bureaucracy were removed from their position, but they would be appointed in other areas of the government or they may even be elected to the party leadership,” a participant stated, pointing out the irony in the party’s administration.
“If one tries to combat the illegality and corruption, it may backfire,” party members stated at the congress. Participants said that the party and the government do not grant adequate protection for those who try to fight corruption and asked how the problem could be solved.
“In the wake of the 4th congress that was held in 2001 in Addis Ababa after a major fissure in the party, rent seeking has become a major challenge for the system and we need to tackle it as soon as possible for the party’s survival. But the issue remains a challenge to the current leadership. We have to give it due attention and take measures,” a participant said.
According to the participants, rent seeking is a major quandary of the urban political economy. “Even thought rent seeking behavior is observed in rural areas as well, we have registered several achievements in lessening it,” Getachew Ambaye, Minister of Justice, said.
Participants including party leaders admitted that senior political and government leaders are involved in corruption. The congress decisively said that corruption must be eradicated.
The congress, that elected Hailemariam Desalegn and his deputy Abay Woldu to continue in their positions, has given attention to the economic and developmental achievements that were undertaken in the past five years’ development plan of Growth and Transformation.
On his closing remark, the party head said that his party is ready to work on issues of mutual interest with opposition groups that will accept the political scenario of the country and the results of the May national election. He also called upon opposition political parties to contribute for the country’s renaissance.
The congress recognized that several achievements were registered in the stated period, however, low performance was observed in major economic sectors.
The party recommended establishing think-tank groups that would be a source for directions and solution providers to barriers that are challenges to current and future development programs and projects. Different studies had previously recommended that formation of think-tank groups in different sectors is vital to accelerating development programs.
The party report stated that the macro economy registered double digit growth, while inflation was minimized to a single digit.
Regarding fiscal policy, following the decision of the previous congress to derive substantial amounts of funds for capital investments from local sources, tax collection had shown a 35 percent growth.
The report stated that tax collection has registered a fourfold growth in the past period. The total income that was collected in the beginning of the GTP had been ten percent of the GDP. There was a plan to expand it to make 15 percent of the GTP. Actual tax collection was 13 percent of the GDP, which indicated the need to continue on tax reform and expanding the country’s tax base.
Ethiopia’s macro economy was stable owing to measures taken in fiscal and monetary policies. The government had decided that the budget deficit should never exceed two percent of the GDP and suspended government borrowing from the central bank.
The report appreciated achievements registered in saving. When the GTP commenced in 2010, saving was at nine percent. Even though the government targeted to expand the saving rate to 15 percent at the end of the GTP, the accentual achievement was very impressive, with a successful 22.5 percent at the end of the last fiscal year.
The report recommended that the saving rate still needs to increase to balance with the rate of investment, which accounted for 40.3 percent of the GDP the past few years, up from 24.7 percent at the beginning of the GTP.
The growth of the investment to GDP ratio had commanded the country to borrow or look for external financiers besides local sources. So far, the country has secured only 18 percent of the investment from external sources.
The report said external borrowing was significant, even though it accelerated the country’s development. The report recommended that the country needs to expand local saving to 40 percent like the Asian tiger economies did, to continue with the development. Otherwise, it could be difficult to secure funds from external financiers if the country reaches its debt to saving ratio.
To achieve this, the government and financial firms have been recommended to continue their efforts to expand the saving rate by expanding financial facilities, social security programs and strengthening the bond market. Making slight increases to the interest rate was another solution mentioned to promote saving rates in the current GTP.
The report recommended that strong be made to expand the export sector and to register increased savings, including on hard currency.
The export sector did not register significant achievements relative to other sectors. And this has been mentioned as a priority sector the government needs to work in a strong and organized manner, as weak performances of the export sector are partly caused by lack of organization among the stakeholders. The report also stated that the government and the private sector must team up to register achievement in the coming year in the export sector.
Weak leadership and lack of attention by the top as well as bottom leaders observed in the past, is to be solved in the coming years to boost export earnings, the report states.
Industrial development was the other topic given attention by the congress. In the beginning of the GTP, the government was hopeful that the sector would register significant growth in GTP I period; its performance was evaluated at the end, even though some changes were registered.
Over the past year, the sector has shown 20 percent growth and the industry sector’s contribution to the GDP has grown to 14.3 percent from 10.3 percent at the beginning of the GTP. The report recommended the manufacturing sector has to register massive development in the coming years to attain the national vision of having an industry-led economy.
In GTP II that will stay until mid 2020, the government has to attain a 17 percent tax to GDP ratio, and achieve a 29.6 percent local saving to GDP ratio to finance 41.3 percent of the country’s investment with local sources. According to the plan, the budget deficit should not exceed 3 percent of the GDP. In the coming five years, the agriculture sector has to grow by eight percent, industry by 24 percent and the service sector by 10 percent.