After MDGs, Ethiopia

After MDGs, Ethiopia Plans to Move Forward

The year 2015 marks the end of the Millennium Development Goals (MDGs) – a set of global targets that mainly aim to reduce global poverty by half and improve the livelihoods of impoverished communities. Despite marked improvements in the reduction of poverty in some countries, there’s still much work to be done to achieve the goals set in 2000. That’s why global leaders are convening a series of meetings to establish the Sustainable Development Goals (SDGs) in order to build on the achievements of the MDGs. In Ethiopia, the work is already being planned, as the government has allocated ETB12 billion for the 2015/16 to meet the soon-to-be completed MDGs. The government is expected to use these funds to finance a number of programmes aimed at poverty reduction and improving access to health care throughout the country. However, critics say that these programmes are not sustainable and create an atmosphere in which people become reliant on aid. EBR’s Samson Hailu takes a closer look at what the Ethiopian government is doing to meet the global call to reduce poverty and the debate that surrounds the efficacy of these efforts.

It was in September 2000 that the United Nations General Assembly, representing 189 countries, unanimously adopted the Millennium Declaration, which outlines 8 goals, 18 targets and 48 indicators under the Millennium Development Goals (MDGs) to be met by 2015. With the target approaching, many developing countries’ performance, including that of Ethiopia show mixed results.
Ethiopia’s substantial progress towards many MDG targets is notable. The recent assessment of the UNDP also stipulates that the country is on course to achieve six of the eight goals. However, serious challenges are still evident. Today, translating economic growth into decent job opportunities, providing quality service and improving service delivery have become the most critical challenges for the government.
In the past, Ethiopia’s slow progress has been linked to policymakers’ and stakeholders’ inability to dedicate enough finance for the achievement of the goals. Understanding this gap, the federal government began to allocate additional funds to all regions in order to support their efforts to achieve the MDGs since 2010/11.
“There has been a clear vision and political commitment to accelerate growth and reduce poverty,” says Haji Ibsa, public relations and information director at the Ministry of Finance and Economic Development (MoFED). “This is why the government is allocating an additional budget subsidy for regions to finance interventions aimed at accelerating progress towards MDGs that have either recorded slow progress or are off-track.” The budget, however, is in addition to the budget subsidy the federal government allocates to regions for the realization of the goals and other targets, as well as the budget that will be allocated by the regions themselves.
Since 2010/11, the government has been allocating an additional ETB15 billion to nine regions and the Dire Dawa City Administration, except for 2011/12, in which the budget rose to 20 billion. However, the appropriation formula for this budget support differs from that of regional subsidies, according to Haji. A region with the lowest performance receives more funds in order to scale up its performance and catch up with other regions.
Based on this formula, the Oromia region has been receiving the largest share of these funds. In the just ended fiscal year alone, the region received ETB4.87 billion out of the ETB15 billion distributed to regions, followed by the Amhara; Southern Nations, Nationalities and Peoples; and Ethiopian Somali regions, with ETB3.47 billion, ETB3.1 billion and ETB1.2 billion, respectively, according to MoFED. The rest of the regions divide the remaining budget of ETB2.25 billion, which is 15Pct of the total budget support.
For this fiscal year, which will mark the end of MDGs and the coming of Sustainable Development Goals (SDGs), the government allocated ETB12 billion. Just like the past four years, the Oromia region will take the largest share – 34.5Pct of the funds.
In the past, efforts were made to boost domestic resource mobilization in order to create the fiscal space needed to scale up pro-poor public expenditures, including on social protection and building economic and social infrastructure. This fiscal year, the government budget allocation to pro-poor programmes (including MDGs) reached ETB117.3 billion (a sum equivalent to 72Pct of the federal budget).
Such government support enabled the country to be on track for achieving targets like reducing poverty by half, according to a 2014 UN MDGs report. In fact, Ethiopia is among four African countries – along with Swaziland, Uganda and Mauritania – that are less than 5 percentage points away from reaching the target.
Recent data published by both the government and international organizations shows that the proportion of people living below the poverty line in Ethiopia has declined from 45.5Pct in 1995/96 to 29.6Pct in 2010/11. This represents a significant reduction during the last 15 years.
For this to happen, interventions like the flagship Productive Safety Net Programme, which reaches 8 million beneficiaries by providing cash and food support through public works in areas affected by drought, is partly responsible.
But experts and stakeholders stress that such programmes create foreign aid dependency. During a meeting in June sponsored by the UNDP, Ahmed Seid (PhD), head of the Department of Management at Addis Ababa University (AAU), argued that the MDGs tend to be dependent on finance from donors, which is creating a sense of dependency on the receivers’ side. “Focus should be given to unleash the potential of local resources so as to avoid such reliance.”
The Ethiopia Poverty Assessment report released by the World Bank at the beginning of this year states that poverty still remains widespread in Ethiopia, while the poorest households have become poorer than they were in 1995, due to increasing food prices. In fact, the report states that 14Pct of non-poor households in the country consume only just enough to live above the poverty line, which makes them vulnerable to shocks that can make them fall into poverty easily.
In addition to this, some remain skeptical of the success registered in halving the number of people whose income is less than USD1.25 a day between 2000 and 2015. In order to attain and maintain these changes, the country needs to create more productive and decent jobs that can raise the income of individuals over time, according to Tadele Ferede (PhD), assistant professor of economics at AAU. “Most workers are employed in vulnerable jobs with low wages and low productivity,” he told EBR.
However, data obtained from the Ethiopian Federal Micro and Small Enterprise Development Agency states that four years into the first phase of the Growth and Transformation Plan (GTP), 5.7 million jobs were created, which exceeded the target for the whole GTP period by 2.7 million.
But based on internationally accepted definitions of labour, the types of jobs generated through these kinds of development programmes leave much to be desired. According to the International Labour Organization’s definition, decent work involves opportunities for work that is productive and delivers a fair income, security and social protection for families.
Tadele also has concerns regarding the correctness of the measurements. “Currently, measures of poverty are based on income,” he argues. “However, measuring poverty using income alone ignores the wider human and social aspects of poverty.”
The ambiguities also extend to the health services front. Reports reveal that Ethiopia has also done quite well in terms of meeting the goal of reducing child mortality during the last decade. The country also exhibited much progress in combating HIV/AIDS, malaria and other diseases.
Ethiopia has recently reported progress in reducing maternal mortality by using low-cost interventions. The programme has succeeded in bringing services closer to the people, particularly rural dwellers who historically have had challenges in accessing health services.
However, a UNDP report reveals that Ethiopia, together with Niger and Sudan, has the scarcest access to skilled health attendants in the continent, which threatens the sustainability of the progress.
Indeed Ethiopia has come a long way since 2000, making substantial progress towards a number of MDGs. Yet, these progresses may not be enough to reach some of the targets by the end of 2015.
This is why the UN is in the process of launching the Sustainable Development Goals (SDGs), which are a new, universal set of goals, with targets and indicators that UN member states are expected to use to frame their agendas in the next 15 years, according to Alessandra Casazza, programme advisor at the UN, who attended the UNDP-sponsored meeting at AAU. She told the participants that MDG has many limitations, including ignoring the quality and social aspects of economic development.
Such shortcomings are the reason for the UN to work with member countries to replace the MDGs with SDGs, which will have 17 goals, including the MDG goals that are not met by 2015.
The targets were identified after the UNDP and Organization for International Development conducted a survey using the responses of 7.1 million people globally, in which 2 million and 20,000 of the sample drown from Africa and Ethiopia, respectively, according to Casazza.
“Almost all respondents’ responses were the same,” said Casazza. “When put in ascending order, people prioritize access to the best education, provision of decent job opportunities and health care, as well as having responsive government. These are the bases for SDGs.”
These post-2015 goals are expected to cost up to USD7 trillion per year and are likely to be approved in September at a UN meeting in New York. Before that happens, however, the UN is working hard to secure the required financial commitment from world leaders.
And this is why the UN will hold the 3rd International Conference on Financing for Development between July 13-16, 2015, in Addis Ababa, which will be attended by high-level representatives of governments, as well as international and non-governmental organizations and private sector leaders.
It is with such preparations and new hope that world leaders are looking towards a novel development agenda beyond 2015, as they are faced with unfinished business.EBR

3rd Year • July 16 – August 15 2015 • No. 29


Leave a Reply

Your email address will not be published. Required fields are marked *

Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.

2Q69+2MM, Jomo Kenyatta St, Addis Ababa

Tsehay Messay Building

Contact Us

+251 961 41 41 41