It seems time is ticking fast to its stoppage for the current Parliament whose tenure began four and a half years ago on 10th of October 2010.
The 547-seat Parliament, which is made up of an absolute majority of the ruling party except one seat, has now only four more months to conclude its five year tenure. At the same time, the country’s major development plan, the Growth and Transformation Plan (GTP), is seeing its window of implementation close fast, perhaps as fast as the lawmakers’ term, writes Yonas Abiye.
The outgoing Parliament has been quite busy in its affairs. For instance, during the past six months, it has endorsed a total of 21 legislations including new enactments and some amendments. Similarly, several bills pertaining to Ethiopia’s foreign relations – bilateral and multilateral agreements – have also been reviewed and endorsed by this Parliament. Among these notable agreements, border security agreement with the Sudan and a Memorandum of Understanding on Defense Cooperation with the governments of Burundi are just the two.
But somehow in an unusual move, the House witnessed a high traffic coming by way of cooperation agreements between Ethiopia and Brazil. By far, cooperation agreements between the two countries (Brazil and Ethiopia) is the single most highest number of legislations that the House has to endorse during the six month under question; while at the same time indicating a growing geopolitical shifts to the Latin America economic giant for Ethiopia.
The sovereign bond bill, which later enabled the country to take part in the global financial market for the first time by issuing a one billion dollar worth sovereign certificate, was also one of the landmark legislations that was considered by the House and endorsed.
Moreover, a legislation that is worth mentioning is a trio of bills enacted to amend the corruption proclamation – the Proclamation to Provide for the Crimes of Corruption, the Revised Federal Ethics and Anti-Corruption Commission Establishment Proclamation and the Revised Special Procedure and Rules of Evidence Proclamation. These three related proclamations were instrumental for the commission to expand its mandate to regulate the non-state institutions.
Once more, the other hottest agenda that was tabled before the House during the past half year was the controversial Bio-Safety Proclamation which saw some of its previous provisions amended to eases restriction on the importation of GMO (Genetically Modified Organisms) products which were severely disputed by environmentalists. In fact, for almost half a century, GMO has always been at the center of contention both globally and locally. Unlike its bitterly contentious nature, the amendment did not face as such impeding challenges from MPs, however.
Still registering another milestone, the House also ratified the bill to amend the Copyright and Neighboring Rights proclamation.
Apart from its lawmaking duties, vested upon it by the Constitution, the House also carries other responsibilities such as following the activities of the executive branch. Periodically, it calls up on federal officials including the Prime Minister to defend the discharge of their responsibilities. In doing so, the House reviewed various reports coming from federal ministries and agencies before going to recess.
Almost all reports, primarily highlighted success stories against the plans they had set earlier in the fiscal year, most of which was in line with the general frameworks of the five-year GTP.
According to a latest report issued by the World Bank, Ethiopia in the GTP period has experienced a 30 percent reduction in the number of people living below the poverty line and registered more than a fourfold increase in GDP per capita to reach 650 dollars between 2003 and 2015. Capitalizing on this recent success, the government has set out an ambitious plan to become a middle-income country by 2025. This five-year (2010-2015) economic growth and poverty reduction plan is estimated to cost the government some USD 75 to 79 billion.
Despite government’s claims that it has succeeded in meeting most of the targets set by this plan, the detail performances appraisal apparently appears to be farther from the GTP goals; at least in some important subsectors. Especially, in the most critical economic sectors like manufacturing, which is believed to have a transformative role in the country’s economy performance, leaves a lot to be desired.
Particularly, the reports confirm that the manufacturing subsector was not able to meet the target despite progress year by year. This has been substantiated even by the Prime Minister’s own report that was presented to the House on the last week of its session before recess. The same facts were also reiterated in the reports of both the Ministry of Industry (MoI) and Ministry of Trade (MoT).
According to the official figure released by MoI, the manufacturing sector has achieved on average 13 percent growth in the past four consecutive years of the GTP. However, the momentum of growth of this sector appears to be falling short of the 21 percent that the government has set on the GTP.
In the first half of the budget year, export from the manufacturing sector earned the nation a disappointing USD 191.5 million. The ministry targeted an ambitious USD 505 million in the first six months of the current budget year and an overall USD 1.2 billion by the end of the GTP.
The minister attributed the poor performance to low productivity, poor management capacity, raw materials shortage, power outages and focus on local market. “Shortage of industrial inputs has been the basic challenge both in terms of quantity and quality. It has impeded companies engaged in textile and leather manufacturing from exporting and sometimes forced them to halt production,” the minister said on his report. A major shortage that is crippling the textile sector is supply of cotton; and according to Ahmed Abitew, Minister of Industry, the government has intervened to address this shortage through imports.
Ahmed did not deny the poor performance recorded during the first six months. Rather, he blamed low management capacity, low productivity and market limitations to contribute to the confinement of the local market, as well as inadequacy of support services and coordination.
Similarly, Prime Minister Hailemariam Desalegn on his part announced that the manufacturing sector could not record the intended advancement for reasons similar to that of the Industry Minister. The picture is not all too gloomy, however. Export from the manufacturing sector has averaged a growth of 36 percent during the first four years of the GTP to reach USD 397 million last budget year, the report showed. However, this is still a far cry from the USD 2.2 billion set under the GTP.
The manufacturing sector, which accounted for merely 13.3 percent of the GDP in 2013/14, is dominated by food, beverage, textiles and hides and skins.
In comparison, the information technology and communication sector and the road development sector, reports are indicating relatively better prospects in terms of the GTP goal.
Though the government hailed its achievement of the construction of 11,923km of roads, it also revealed that it has encountered a major drag in upgrading the existing roads, and in securing the necessary finance for the nation-wide railway network, which is some 2400km, with exception of the eastern corridor. This ambitious project have progressed very slowly apart from the soon-to-be-completed Addis Ababa Light Railway Transit (LRT), the Addis Ababa/Sebeta, Me’iso/Tajura-Djibouti railway (expected to be completed next year) and the recently commenced Awash – Woldiya/Hara Gebeya projects. However, according to the Minister of Transport, Workneh Gebeyehu, the nationwide railway networks such as the Assayta-Tajura Port, Addis Ababa/Sebeta-Ejiji-Jimma-Bedele and Modjo-Shashemene-Bodity-Woytto projects have not been able to secure the necessary finances yet. The only project which has already secured partial financing from the Indian government is the Assayta-Tajura project, according to Workineh.
Two years ago, the former Minister of Transport, Diriba Kuma (current Mayor of Addis Ababa), reported to Parliament that back then it was not possible to secure foreign loans for the above mentioned railway projects. However, a week later, Prime Minister Hailemariam told MPs that his government had no problem of securing project financing but blamed the ministry for not providing sufficient and convincing documentation for financiers. However, even after the PM’s remark, it was only the Awash-Woldiya/Hara Gebeya project that succeeded in securing financing.
The other highly ambition project included in the GTP is the quadrupling of power generation capacity of the nation from 2,000 MW to 8,000 MW, coupled with new power distribution lines stretching 132,000km. Furthermore, the government targeted to increase the number of mobile phone users from 7 million to 40 million and internet service subscribers from 200,000 to 3.7 million. This is further aimed at helping farmers throughout the country to be provided with access to roads, electricity and telecommunication services.
According to Minister of Communication and Information Technology, Debretsion Gebremichael, some of these targets have been surpassed by the performance.
Highlighting that the Telecom Expansion Project (TEP) is a key component in the GTP, Debretsion told the House last month that the current number of mobile subscribers nationally has reached 30.49 million, landline telephone subscribers reached some 819,607 and data and internet users peaked 7.76 million. Meanwhile, the national coverage of wireless telephone services and the international link capacity are elevated to 73 percent and 17.9 GB/s respectively at the first half of the current fiscal year.
The government holds the highest hope for this sectors that is it going to achieve over a 100 percent of the target.
For long, Ethiopia’s economy has been dominated by agriculture: it is major employer of the workforce in Ethiopia and coffee remains to be the largest foreign currency earner from this sector. In fact, coffee, which exhibited a shockingly law performance last year, has dramatically revived this year fetching USD 308.5 million from 72,556 tons that was exported in the first six months. It further brought more positive news for the country’s performance as it once again revived to retain its lion’s share from the overall export basket of Ethiopia.
More interestingly, coffee achieved higher than the planned 113 percent performance. Originally, the plan was to obtain USD 269.03 million from 73,593 tons. Similarly, this year’s performance has surpassed last year’s performance both in terms of volume and revenue.
As to the Minister of Trade, Kebede Chanie’s explanation, this year’s global market has brought a better marketing condition that in turn, “drove us to take advantage from our coffee by clearing out the accumulated stock in the country since last year”.
Meanwhile, in the same report, the Minister also disclosed that the nation has secured around USD 1.31 billion from the export sector during the period in question. However, the performance has managed to hit only 69.6 percent of the targeted USD 1.98 billion.
The GTP’s base case scenario stipulates an 11.2 percent annual growth rate; whereas the high case scenario anticipates 14.9 percent. In both cases, the plan allow for significant increases in agricultural production, possibly doubling it and substantially expanding industrial outputs and infrastructural development.
Other targets include reaching a per capita GDP of about USD 700 (from USD 400 at start of the GTP period). But, according to the PM, the nation has currently managed to bring about a rapid and yet sustainable development registering a per capita income of USD 632.
The PM recently announced that the nation is slowly transforming from agriculture to industry while the service sector has taken over the leading position as the number one contributor to the Gross Domestic Product (GDP).
In his six-month report, the PM indicated that country’s economy is moving on a right track increasingly from agriculture to manufacturing. According to his report, a five percent decrease in agriculture’s share of the GDP and a three percent rise in the manufacturing sector’s role in the past three years marked this slow transformation. The service sector also marked a one percent rise in the stated period. However, service has replaced agriculture as the number one sector in terms of contribution to the nation’s output.
The upcoming election will bring a new Parliament with a fresh outlook. Similarly, the five-year growth plant is also expected to be to be replaced by GTP II. So, But before that, the current MPs will convene after a one month to pass more bills and to listen to the remaining reports from the federal ministries and agencies. But, there are a few issues that are expected to be high on the agenda in the remaining life-span of this Parliament. Particularly, Ministry of Finance and Economic Development (MoFED) will table the budget proposal for the coming fiscal year and introduce GTP II. Equally, the Auditor General’s report is also a must to see or listen to agenda that is scheduled for late May, a few days after the upcoming national election.