Ministers say GTP-II targets “likely unattainable”
Planning C0mmission mandated to approve future plans
Currently in its mid-term, the Growth and Transformation Plan (GTP II) – launched in 2016 to run for a span of five years – is feared to be “likely unattainable”, ministers and other government officials said during the week.
At an evaluation meeting held on Wednesday, Getachew Adem (PhD), deputy commissioner of National Planning Commission, in his assessment report told MPs, ministers and others officials that most of the set targets in the GTP II, which were deemed to be achievable by the end of 2020, were found to be way farther from attainment.
Getachew detailed that grand railway projects, road network expansions, sugar development projects and the like have been some of the areas that remain behind the GTP-II targets.
The road projects were expected to reach 220,000 km in network across the country. However, until last year, the road network reached to 121,196 km with a 100,000km gap which Getachew sees mostly unattainable during the remaining GTP II years. Woldia/Hara Gebeya railroad project stagnated at 64 percent construction as external financing could not be secured for the project. Woldia/Hara Gebeya/Mekele rail project is facing similar setbacks.
Agricultural outputs were set to yield 406 million quintals while until recently, some 302 million quintals is believed to have been harvested.
He pointed out that trade balance deficits, debt sustainability stresses, national savings with respect to demand for investments, declining share of domestic revenues with respect to GDP; showed stress over the past three years.
Yinager Dessie (PhD), former commissioner of NPC noted that dwindling exports, mounting debts and debt servicing burdens are weighing pressure on targets and economic performances. He warned that the economy is at a state of serious challenges and it is an alarming situation.
Ministers have also echoed for the bid to revise anchor targets and consider realities on the ground. Getahun Mekuria (PhD), Minister of Science and Technology argued that Ethiopia could not beat trade deficits unless it promotes value additions to primary commodities. He mentioned that a healthy trade balance is secured when export to GDP ratio hits a 30 percent share and unfortunately, Ethiopia's export share to GDP remains at 3.3 percent and that takes the country nowhere, the minister argued.
Yinager Dessie (PhD), former commissioner of NPC and incumbent governor of the National Bank of Ethiopia (NBE), warned officials that Ethiopia’s economy will be at a greater danger if performances and achievements continue to be as usual. According to the new governor, GTP-II has based some of its estimation on wrong footings and the government has failed to anticipate and predict the occurrence of drought and its potential impact.
He went on to say that the plan failed to anticipate possible political uncertainties that resulted in massive wave of unrests across the country. The central governor said that the economy is at a crossroads due to the declining export performances, an acute shortage of hard currency, inefficiencies to bring about structural transformation and others. “Such outcomes have somehow influenced the performance of the plan but seriously altered the normal course of the economy,” Yinager told the ministers.
Getahun Mekuria (PhD), Minister of Science and Technology waved serious criticisms against the three major sectors of the economy. While reasoning the status of the economy, the minister pointed out that agriculture is the least performing sector. He substantiated his argument with figures. According to Getahun, Ethiopia has a 36 percent of arable land out of the vast expanse of 110 million hectares. The productivity per unit of hectare is an additional line of argument, Gethanu stressed on. The global average productivity per hectare, he says, is somewhere at 6 tons while Ethiopia’s productivity remains at 2.4 tons per hectare.
His assessment of the industry sector sets off from the view that labor intensive industrial policy’s negligence to incorporate wealth creation is one major pitfalls. In addition to that, the likes of textile and leather subsectors were found to be the least performing areas of the industry sector. Though the share of industry to the GDP was reported to reach somewhere around 25 percent, more than 20 percent goes to the contribution of the construction industry and that according to Getahun, is a misleading figure.
The ministers reached a common agreement that the most anticipated manufacturing sector has not yet been able to play a role in the growth and transformation process of the country. The widely gapping trade balance of Ethiopia has reached to a point where debt sustainability stress has stifled major projects leading to shelving some.
Close to USD 2.9 billion is the total revenue generated so far, while the import bills have mounted to USD 15 to 16 billion which Getahun argued is very unhealthy. “To have a healthy economy, exports should contribute to 30 percent share of GDP.
Other ministers followed suit and showed the shortcomings of the economic plan of the government. Following the discussions, the plans and targets for the upcoming fiscal year, the government has allocated 346 billion birr budget yet stating there will not be new projects to be executed. However, the new administration came up with the idea of signing an agreement with MPs on targets the executive set to achieve. The idea is, when they fail to deliver, they will assume direct accountability.
That in the making, Eyob Telkalign, the commissioner of NPC told reporters that from now on, every public office will be required to get the approval of the commission before executing any budgetary plans ahead. According to Eyob, public agencies will be regularly evaluated and will be timely checked for progresses they have made in accordance to the plans and targets they have agreed to execute.