Ethiopia Registers Double Digit Growth So Far during the Growth and Transformation Plan (GTP)

Photo: Girma Birru, Ethiopian Ambassador to the USA

By Tsehaye Debalkew
Washington D.C.
March 04, 2013

During the past two Ethiopian Fiscal Years (2010/2011 and 2011/2012) real GDP growth of 11.6% and 8.5% have respectively been registered. The share of industry in total GDP has increased from 10.8% at base year to 15% in 2010 / 2011. The average double digit growth that has been registered puts Ethiopia in the list of fastest growing countries of the world.

The foregoing statement was made by Ambassador Girma Birru, during a presentation he
made @ the African and Middle Eastern Division at the Library of Congress in Washington D.C. last Thursday.

In his presentation entitled “Growth and Transformation Plan/GTP/ of Ethiopia/ 2011-2015/ Prospectsand Challenges”, the Special Envoy and Ambassador Extraordinary and Plenipotentiary of Ethiopia to theUS and resident envoy to Canada and Mexico briefed an audience of intellectuals and experts who conduct research and studies on Africa, the Middle East and Ethiopia.

In the course of his presentation the Special Envoy recalled that Ethiopia had strongly pursued a developmental state economic governance model by inking 11.2% continuous annual growth for over seven years prior to anchoring on the GTP. This background experience to which Ethiopia had correctly leveraged served it as a launching pad to anticipate its growth trajectory by resorting to two options that of the base and high case scenarios of 11.2% and 14.9% respectively.

Dwelling on the significance that is attached to agriculture during the period of the GTP, Ambassador Girma re-iterated that agriculture will continue to be the major source of economic growth with the main focus of productivity increase and the increase in crop production which he said is crucial for the country’s endeavor to attain food security and increase export earnings.

By way of presenting some of the salient sectors that the GTP anticipates to make a lasting impact the Special Envoy cited some figures to illustrate his contention. In this regard he enumerated that the country envisions to generate over 8000 MW of energy and laying 132000 Kilometers of new electricity distribution lines and expanding access to power to 75% of the population by the end of the plan period, he emphasized.

Building of 97,500 kilometers of new roads including all weather roads to connect villages to main roads, constructing close to 2,400 kilometers of new railways linking the country to the main port and growth corridors, raise the number of cell phone users from 10 to 40 million, expanding water supply infrastructure to 99% of the population and drilling of some 3000 water wells per year are some of the huge tasks to be achieved through the implementation of the GTP, he added.

Continuing with the anticipated results in different sectors, Ambassador Girma apprised the renowned attendants that increasing the increase in net primary enrollment to 100% and raising the number of university students to half a million is the target set by the GTP, he underscored. As pertains to the health sector he pointed out that the outcome will be 100% primary health service coverage and assured the audience that Ethiopia which is identified as one of the countries to meet the Millennium Development Goal / MDG/set by the UN is on track to attain the target of the MDG in both health and education programs.

Briefing the congregation the Ambassador revealed that micro, small and medium size industries that create more employment are priority sub sectors in the program period. Mega public and private strategic projects in metal and engineering, fertilizers, sugar production, textile, cement, etc are considered for structural transformation, he underlined. In absolute terms he argued that, tax revenue has doubled in the first two years and domestic savings rate increased from 5.2% in base year to 16.5% in 2011/12. Referring to investment he indicated that the rate increase from 24.7% of GDP at the base year to 34.6% in 2011/12 has been very encouraging.

In relation to the benefits of the GTP in the creation of new jobs he said that about 1.5 million people were employed in major cities and small towns during the first two years. Ambassador Girma categorically pointed out that, low implementation capacity in the private and public sector, low private investment response particularly in manufacturing, low domestic savings, inadequate tax revenue and meager export earning that runs below target, risk of high inflation and the widespread traditional cultural element that keeps maternal mortality rate high are some of the grueling challenges that warrant particular attention in the coming years.

Ambassador Girma expressed a firm optimism that the GTP is well underway and generally looks going at least in line with the base case scenario, he stressed. The Special Envoy appreciated that the first two years of implementation have been a very good source of experience and achieving the base case scenario target is a good result and emphasized that there remain serious challenges that require attention in the course of implementation of the GTP during the ensuing period, he retorted. Ambassador Girma made good of the engaging question and answer session which saw the active participation of the attendees towards the close of the presentation.