African business, politics and lifestyle
Is Ethiopia’s development plan too “ambitious”?
Ethiopia’s Prime Minister Meles Zenawi seemed to anticipate this week exactly what a lot people were thinking about his government’s plan to double the poor country’s GDP and wean it off food aid within just five years.
“I think that this is a very ambitious plan,” he said.
“This is indeed an extremely ambitious plan,” a few minutes later.
And, once more for luck, “We have put in place a high-case scenario which is clearly very, very ambitious.”
So far, so ambitious.
But, after those disclaimers, a man many see as Africa’s most economically literate leader didn’t shy away from saying he thought Ethiopia could get there.
The “base-case” scenario of 11 percent average economic growth over the period was “doable” and the “high-case” scenario of 14.9 percent was “not unimaginable”.
On food aid: “In the future, we will feed ourselves.”
The targets are contained in “Growth and Transformation”, the country’s latest five-year development plan.
A doubling of agricultural output, it says, is what will fire the growth. The government will urge investors to pump money into the sector and it will dole out more licenses for large-scale farms. It will also help millions of small-scale farmers — upon which the country relies — to access markets.
But, while agriculture is the focus now, the plan also envisages eventual industrialisation.
Meles based much of his optimism on Ethiopia’s recent economic performance. The country has posted an impressive average annual growth of 11 percent over the last five years, something the prime minister says it will have no trouble repeating.
The only problem with the growth figures is that some people don’t believe them. The opposition in Ethiopia doesn’t and the Financial Times this week called them “dubious”. A new Oxford University index shocked many Ethiopians after it said the country was the second poorest in the world, ahead of only famine-hit Mali and behind even war-torn Somalia.
Still, Ethiopia is undoubtedly attracting some foreign investment in agriculture and oil and gas exploration and a small middle class is emerging. Even the IMF, though less optimistic than the government, predicts healthy growth of 7 percent this year.
But it was the claim that the country won’t need foreign food aid at all within five years that raised most eyebrows in the cafes and bars of the capital Addis Ababa.
Six million Ethiopians needed emergency food aid last year and about another 7 million chronically hungry people are on a long-running food-for-work scheme.
When I questioned Meles about how Ethiopia planned to feed these people, he drew a clear distinction between the food-for-work scheme (known as the “Safety Net”) and emergency aid.
Though the Safety Net is now foreign-funded, Meles said he thought Ethiopia could maybe fund it alone at the end of the five years. But he saw it continuing as a “form of social welfare.”
Emergency aid would not be needed, except for “unheard of types of calamities”.
“Normal emergencies, we should be able to manage within five years,” he said.
So is this plan realistic or is it just wishful thinking? Why set goals that many think impossible? Could Ethiopia double agricultural output? Through what sort of farming? Who will invest? And what is the best way forward for Ethiopia’s development?