Ever since the first Growth and Transformation Plan (GTP-I) the government gives due attention to make the sector as a source of input to the industrial sector and to increase productivity to address local food demand by mechanizing the sector and promoting irrigation.
As Ethiopia set a goal to double the agricultural product and productivity during the GTP-I period, the productivity of crops increased to 304 million quintals at the end of GTP I (2014/15) from only 196 million during the beginning (2010/2011). Ethiopia also plans to collect over 500 million quintals of product from the sector by the end of GTP-II.
The plan for 2016/17 autumn season, is 345 million quintals Agricultural Sector State Minister with the Ministry of Agriculture and Natural Resource, Dr. Tesfaye Mengiste said adding that the performance is still under process by the Central Statistics Agency (CSA).
According to the State Minister, the two major setbacks in mechanizing and modernizing the agricultural sector were shortage of capacity building and access to technology. To address the problems the Ministry gives attention on awareness creation, attitudinal change, expanding agricultural com mercialization cluster, mobilization forums, formulate experiences and delivering inputs and technology, Tesfaye said.
According to Tesfaye, by changing the attitude of farmers and applying and introducing best practices, the government plans to address internal food demand, increase the export commodity of the country and deliver enough input for the industry especially to the integrated agro-industrial parks.
By introducing and/or familiarizing technology for farmers and building up their capacity, the Ministry plans to earn 374 million quintals product for next autumn season and it finalizes all necessary preconditions for both spring and autumn harvest seasons, the State Minister added.
Concerning the spring harvest season and 2018/19 autumn harvest seasons, the State Minister indicated that the Ministry is working aggressively for the successful implementation of the spring season by mass mobilization as it plans to cover 2.1 hectares of land by crop. Out of this 84 percent is ready for cultivation of which 44 percent is already covered with crops, he said.
Except in some part of Southern Tigray and Eastern parts of Amhara States The spring season rain is good at national level, which will help for the success of the spring season crop productivity, which also help for the autumn season productivity.
According to Dr. Tesfaye a plan is set to earn 374 million quintals of crop product by covering 13 million hectares of land in 2018/19 autumn harvest season and for the achievement of the plan, it focuses on capacity building and introducing technology and other inputs like fertilizer and improved seeds.
The State Minister further noted that the Ministry plans to use 15 million quintals of fertilizer and 4.7 million quintals of select seed. The required fertilizer is already purchased and 7.4 million quintals is being distributed to regional states while the remaining amount is either being transported or undergoing process of import.
The Ministry has also given due attention to facilitate the transport of the fertilizer as a steering committee is formed and technical committee is evaluating the performance. 1.5 Million quintal improved seed is available on hand and the Ministry is working to deliver the demand from the farmers internally, he stated.
The Ministry has identified lack of performance empowerment and addressing technology as the main factors of the sector, hence, it gives attention for capacity building and technology to the agricultural sector as it gives due attention to cluster farming, farming mechanization, awareness and knowledge sharing among the farmers and using inputs and technologies.
To properly internalize and apply the agricultural commercialization cluster which was introduced to the sector during the past years, which play big role in increasing product and productivity, to increase quality product and solves mechanization and market problems, it focuses on mobilization of sharing experience between the farmers and experts of the sector.
The Ministry is also expanding extension service in which more than 17 million farmers get extension services and from which 27.7 percent become model farmers. And at national level knowledge and technology combination idea package were also introduced since last year where around 40 percent of farmers applied it.
In addition as farmers training centers are the entry points of the extension service, the Ministry focuses on strengthening and expanding the training centers which currently reach 14,000 centers. The training centers focus on introducing new technologies, methods as 62 percent of the training centers become effective.
The key issues to address the plan, the Ministry also gives attention to involving women and the youth in the sector, expanding cluster development, introducing inputs and raw materials, expanding agricultural training centers, accessing to unaddressed areas and using last year’s harvest season and this season spring performance experiences as inputs for the next autumn harvest season.
To protect the crop from insects and other diseases, the Ministry also gives concern and prepared before happening as it gives big attention to integrated pests management, Dr. Tesfaye stated.
BY DARGIE KAHSAY
The effects of black market on economy
Black market has no always a pleasant effect on the economy of any country all over the globe, no matter how developed or underdeveloped a particular country is. To start with its definition, the term ‘black market’ refers to an economy, wherein all the transactions taking place are illegal in nature. In other words, the goods and services, which are traded in a black market, do not come from legal channels.
Having consultative discussions with investors recently, Prime minister Dr. Abiy Ahmed noted that the black market economy runs in parallel to the established economy of the state around the center of the city, even if the respective government owns its illegality.
In the same way, black market encompasses illegal and, many times, unethical trade of several different goods and services. These range from drugs, weapons, people, and counterfeit products to human organs, animals, currency, and fuel. Most often scholars believe that there are two possible motives due to which black market may thrive, particularly to evade taxes, and to trade in smuggled goods.
In Ethiopia, black market is now loading pressure on the economic and citizens’ life. Recently approached by Addis Zemen daily newspaper, experts say black market is promoting the unconventional money laundering system by deteriorating the formal financial market.
Yesterday, all private and public banks in Addis Ababa bought one dollar for US $ 27.24, EUR at 33.69 birr, GBP at 37.03 birr. They also sell one dollar for 27.78, 34.37, and 37.77 birr respectively. But, the transaction in the black market is much higher than the banks’ rate, officially bought and sold by a 10-birr increment.
Lecturer of tax and custom at Civil Service University, Dr. Lemissa Baissa said that the growing black market has now put a devastating effect on the economy. He says the Black Market has been a major challenge in over crowded tax and customs procedures. The problem usually affects over a surplus of imported medicines, and holds patients back from getting medication abroad.
Professor of Economics at Nekemte University Economics Lecturer and Researcher Dr. Admassu Teso said the Black Market bame a reason for expanding contrabands, weakening domestic savings, decelerating domestic development, expanding illegal money laundering and diminishing financial institutions.
According to Dr Admassu, one of the reasons for the rise of black market is the decreasing proportion of purchasing power of Ethiopian currency, which does not consider the country’s current status. In economics, it is customary to make people reduce their spending on foreign goods and currency, and to pay attention to domestic production in order to decrease the purchasing power of money. But, providing less consideration for the current status of the country, the situation has made it possible for the Black market to be strengthened and place negative impact on the economy.
Economist and political scientist Dr. Costentinos Berhatesfa said the rise of the black market became a major cause for the collapse of the economy. Redeeming the monetary value by 15% at a time threw negative impacts on the economy of citizens.
In fact, foreign currency is needed for procurement of machinery and spare parts, and for new ones. But, if factories cannot get the required amount from the government, so they go to the black market. As a result, they buy it with expensive price. Thus, while the product becomes expensive, the lives of citizens will be under great pressure.
Dr. Costentinos stated that when inflation occurred, citizens have abandoned their money to save in the bank, rather need to take the option of constructing a building, purchasing gold and foreign currency. This will cause shortage of currency in the banks. Thus, if there is no exchange, it brings an effect of collapse in the economy.
According to Dr. Constantine, more than 40 percent of the country’s economic activity is engaged in the service sector, which is directly or indirectly dependent on foreign currency. He also said that if they could not currency from the legal channel, they will be forced to be a black market player and contribute for the expansion of the illegal money laundering channel. As the Black market continues to grow, the formal economic system will be declining.
Ethiopia is obliged to import goods such as non-pharmaceutical products from foreign countries, he said, domestic importers would not get the desired currency. Consumption of various commodities, coupled with the increased purchasing need of the commodity, has led to the loss of foreign exchange earnings
Dr. Costentinos pointed out that political problems were also driving the expansion of the black market. If citizens living abroad send money to their home country, they would contribute for the accessibility of sufficient foreign currency.
Before engaging in large projects, citizens must first earn large foreign currency to meet their basic requirements. The government has to coordinate with the private investors to tackle the consequences of illegal money laundering.
According to sources, the transaction before 27 years, when the EPRDF took power, was that one dollar was bought for 2.07 birr; again in 1992 and one dollar in 1992, the transaction grew to 5 birr for I USD. Since the beginning of the first Growth and Transformation period, the purchasing power of the Ethiopian currency has been decreasing from time to time.
In the current budget year, the monetary purchasing power was reduced by 15 percent, while it has been reduced by 20 percent over the last seven years. In relation to this, the expansion of black market has been mounting unprecedently.
If measures are not taken, the Black Market will expand the illegal money laundering and deteriorate the financial institutions It will close industry, discourage investors, and interrupt government projects. It is time to take action over the players of, and the expansion of black market in this country.