Sunday, April 21, 2024
BusinessPhasing out GTP, ushering in prosperity

Phasing out GTP, ushering in prosperity

A lot has happened and a number of scholars have written about the grand economic plans the Government of Ethiopia put in place. The Growth and Transformation Plans (GTP), a two-term five-year economic plan was being implemented.

Now, the GTP has phased out and a new 10 year grand plan is on the table. The new plan, which has been drafted by the National Planning and Development Commission, dubbed the “ten year perspective development plan” will run from 2020-21 to 2029-30 and is being dispatched for public discussion. The Commission is coxswaining the works and is looking it to ways on how to beef up this draft plan.

Now that the new plan is coming to the fore, many are at the previous development plan and what has been achieved. How many of the targets have been met and which ones did the government fail to meet.

Since its inception, the GTP has been marred with criticisms. It took a few years to popularize the plan and the targets inscribed in the document. When the GTP was brought to light, experts did not hesitate to refer to the GTP as the “government’s magic plan”. Others opted to speak of it as “imaginary” or as an “idealistic plan”. Many commentators, and later on the government, conceded that the GTPs were in fact ambitious.

No doubt that GTP was full of ambitions.  It is difficult to find out how much of the targets set out have been achieved over the course of ten years. The first term or the GTP-I ended five years ago and had slid into nothingness before many knew how much of the planned targets had been achieved and what setbacks had challenged the targets.

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Since 2015, GTP-II was rolled out and have concluded this budget year. But the question remains; what were the outcomes and what are the achievements? That is probably is a billion-dollar question which one might want to know the ripostes to and a few scholars have a thing or two to say about both the GTP-I and GTP-II. Demissie Chanyalew (PhD), a senior economic expert and consultant, in his book: “The quest for change: Ethiopia’s Agriculture and Pastoral Policies, Strategies and Institutions” attempted to review both GTPs from the perspective of the agriculture sector. In fact, Demissie reviewed pre-GTP economic plans in order to provide overview of the policies of the past. The GTPs came as a successor of the Plan for Accelerated and Sustainable Development to End Poverty (PASDEP), which was implemented as a five-year plan until 2010. What preceded PASDEP was the Sustainable Development and Poverty Reduction Program (SDPRP). It was the national economic plan that went on to be implemented in a similar fashion between 2000 and 2005.  Demissie provides insights on the economic development plans and focuses on the challenges and shortcomings. In that regard, it is widely noted that neither the SDPRP nor the PASDEP had been instrumental in eradicating poverty. They did not help in accelerating growth or develop the economy. Arguably, the plans might have abetted in slowing down the severity of extreme poverty and steer gradual changes in the economic structure. Some economic figures will be mentioned here qualify the argument.

The GTPs had intended in transforming Ethiopia’s economy from an agrarian to an industrial one. Ten years later Ethiopia remains to be a predominant agrarian country with some 80 percent of the entire population being dependent on subsistence farming. For instance, GTP-II targets to achieve universal electricity coverage by 2025. However, at the end of this fiscal year, 56 percent of the Ethiopian population does not have access to electricity.

In fact, it is incontestable that both of GTPs proposed very bold targets. The plans incorporated massive projects that required an enormous amount of capital, human resources and financial outlay. It was during the GTPs that Ethiopia was introduced with the standard gauge railways (SGRs) the Kenyans often refer to it as a major infrastructural achievement. It was during the GTPs that the country had become one of a few countries in Africa that implemented the service of light railway transit.

It was again during the GTP that Ethiopia introduced a grand hydroelectric power project on the Nile River. Initially dubbed Millennium Dam, the country’s flagship project, the Grand Ethiopian Renaissance Dam (GERD), once completed, will generate some 6,000-megawatt hydropower. One of the achievements of the GTPs with regards to infrastructures is the total network of roads. A decade ago close to 40,000 kilometers of all-weather roads have now stretched to cover 130,000 kilometers. The list can go on. The education sector has shown elapsed growth and expansion and currently there are close to 50 universities as oppose to a few a decade ago.

Sugar projects, fertilizer processing plants, several hydroelectric dams, agricultural sector growth leading into having a surplus export merchandize trade, considerable reductions of poverty rates, schoolings and expansions of health care systems, availabilities of potable water across rural and urban areas, massive infrastructural expansion and spending were planned and projected during the GTP periods.

However, let alone lack of financial and capital requirements, the government did not have the right ingredients to implement GTP targets and it starts with allocation of inappropriate human resources and expertise. The widely admitted set back is related to its inefficiencies in areas of project management and executions. For instance, the ambitious GTP-I was supposed to lay down some 6,000 kilometers of railway lines. Later it was readjusted and the targets were set at a more realistic 2,000 kilometers. Yet, that was not achieved either.

Back in 2018, a mid-term review was done by the National Planning and Development Commission which was headed by Yinager Dessie (PhD), the current Governor of the National Bank of Ethiopia. The mid-term review was focused on evaluating the achievements of GTP-II during the first two and a half years of the planned period.

According to the review, GTP-II failed short of achieving most of the targets. No doubt that the targets have produced some results but not as it was planned in the policy document. For instance, the macroeconomic performances of the targets have showed that the GDP growth set for 2017 was at 11.2 percent and the actual growth registered was eight percent. Similarly, for 2018 the GDP was expected to show an 11.1 percent growth and had achieved nearly 11 percent, by growing at 10.9 percent. However, when one zooms in on specific sectors, the achievements appear to be a bit skewed. For instance, agriculture was expected to show an 8.2 growth but achieved only a 2.3 percent growth in 2017 and a 6.7 percent growth in 2018. Industry was growing at 20 percent against the 21.8 percent targets and 18.7 percent against the 20.6 percent targets for the same years, respectively.

The excuses the Commission has indicated for lower than the targeted achievements included the recurrent drought and with the declining trends and downward movements of the global market. That significantly affected the export subsector which is also part of the GDP computations.

Sizable positive achievements have also been shown in the process. The per capita income, which was USD 693 four years ago, grew to be USD 801 in 2017 and further moved up to be USD 863 in 2018. Some five million people have moved out of absolute poverty in those years and currently the national poverty stands at some 19 million people, out of the 110 million population.

Tadele Ferede (PhD), senior economic expert and president of the Ethiopian Economics Association told The Reporter that it is highly unlikely that one can easily finds overall assessments and evaluations on the GTPs. Noting that annual progress reports have been prepared, yet he argued that that does not necessarily reflects the aggregate achievements monitored. According to Tadele, the national economic plans need to be evaluated by an independent entity and not by the planning commission emphasizing that this government body could not assume such roles as it is the body that formulates the plans.

Furthermore, he challenged the centralized style of formulating the national plans to be reconsidered and changed. “It should be an interest driven, bottom up approach planning mechanism, which is essential to arrive at achievable targets”, Tadele argued. Prior to drafting economic plans, the expert advises that agencies should prioritize conducting “needs assessment” as an initial process in preparing plans. Secondly, “development needs and demands should be well studied,” he noted. “Lower level administrations and regional states must be approached to understand their needs and priorities when the central government formulates national plans,” he said. Tadele also advises that the new development plan should consider a similar approach.

While it very early for the likes of Tadele to comment on how the draft planning document was prepared, the National Planning and Development Commission is publicizing the long-term plan dubbed: “Ethiopia: n African bacon of prosperity”. Some of the grand targets set for the coming ten years perhaps seem merely ambitious as were the GTPs. For instance, by the end of 2030/31, the existing 19 percent national poverty rate is projected to be reduced to seven percent with an annual per capita income growth rate of 8.2 percent. During the coming decade, the GDP growth rate is set to grow at 10.2 percent per year.

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