Explicating Some Misconceptions

Agenda 2063 is Africa’s strategic framework for inclusive economic growth and structural transformation. The continent is planned in detail on how to achieve this vision over a period of 50 years from 2013 to 2063; goals are also set. This Agenda packed with seven aspirations and twenty goals, which are aligned with the United Nations’ sustainable development goals that combine the social, ecological, and economic sustainability pillars. For a number of reasons, agriculture and African development are intertwined. One of the Agenda 2063 goals commits “to increase modern agricultural production and productivity,” implying agricultural growth is decisive for Africa’s transformation. However, the low agricultural development in the continent is linked to inadequate investments on the sector to stimulate sustained growth. The structural adjustment measures adopted to cut public spending at the end of the 20th century led to a decline in state-led agricultural initiatives in Africa. Policymakers are correcting the mistakes in the past, “Africa will take full responsibility for financing its own development,” as one of the 20 goals noted. Accordingly, it is imperative to emphasize the need for development-oriented financial institutions that support initiatives that have crucial developmental impacts. This article is mainly to explicate misconceptions regarding the roles played by public development banks, in general, and to provide evidence-based performance indicators on the success of current strategic reform plan of the Development Bank of Ethiopia (DBE), a reform plan aimed to strengthen the provision of cutting-edge development banking services Ethiopia.

Structural transformation requires long-term investment to expand productive capacities, as well as infrastructure development that underpins industrial activities and reduces systemic bottlenecks. Rapid transformative growth will also require a relevant and context-based development strategy.

Three decades ago, the Ethiopian government devised an agricultural-led industrial development strategy, with the aim to boost economic growth and to foster food security. Although many experts in the field have repeatedly criticized the move stating that it is difficult to realize a sustainable economic development through fragmented land, however, there is no doubt that in the current context of Ethiopia, agricultural policy is a viable option. This is mainly due to the fact that more than three-quarters of the population is living in rural areas and agriculture is a major source of livelihood, foreign exchange earnings are mainly dependent on agricultural product exports.

The negative impact on African economies of the COVID-19 pandemic was easily evidenced by the shrinking real GDP of all countries, according to reports released from international organizations. Reports further demonstrated that the extent of the economic slowdown in most countries is linked to the level of integration to the global value-chain, particularly to trade and tourism. A drop in world demand leads to a decline in prices for many of the primary commodities. Specifically, the economic contraction is bigger for exporters of fuel and horticultures. This hugely affected production and export of all economies. African countries through the African Union (AU) are calling to the world’s creditors to reduce or cancel debt. The demand for debt reduction is mainly due to the pandemic that has a devastating effect on the continent’s economy.

Coronavirus disrupted the lives of billions across the world. From the superpowers with a huge economic hegemony to countries with less economic interaction with the rest of the world have been hit hard by the deadly virus. Both developed and least developed countries are likely to witness their worst economic recession in more than a decade. Big corporations and SMEs are reporting losses and cutting millions of jobs, exacerbating poverty and unemployment.

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