It has been widely recognized that the Ethiopian international trade has been in trouble for so long despite the growth it has been registering. The time consuming and costly customs clearance process, the weak and poorly coordinated logistics and transport services and the underdeveloped warehouse and inspection mechanism among others have been obstructing the performance of the sector.
Zewde Zeleke (PhD), general manger and owner of Biyo Agricultural Development, has received 6,749 hectares of land to develop a commercial farm in Benishangul Gumuz regional state, almost a decade ago. The farm was profitable and earned him an award for the export crops he grew. He created more than a thousand jobs for the local community and provided supports including building roads and helped train residents in new farming technologies. This is what the government had in mind when it encouraged local investment in commercial farming.
In May 2000, The Economist, the English weekly, came out with “Hopeless Africa” as its cover page story. The article depicts Africa as a messy place. It goes as far as painting corruption, brutality and despotism as part of the culture of African societies. A decade later, the magazine changed its pessimistic outlook and came out with a positive story: “Africa Rising: The Hopeful Continent,” and explained why the future is Africa.
In recent years, Africa has undergone major changes and these positive economic changes are humbling those who thought otherwise.
Liyualem Wubante, 20, completed her high school studies at Limat Minch High School in Lideta district in 2011. When she discovered her results were not good enough to get a university education, she applied to Ethiopian Catering and Tourism Training Institute (CTTI) and enrolled after she survived a written and oral entrance exam. She is now a second year student of Food and Beverage Management.
“At first I really regretted that I was going to school here and not in one of the major universities in the nation like my peers. However, I now realize there are huge opportunities in the hotel business and it is easy to get a job,” says Liyualem.
Yonas Gebrekidan 38, whose name has been changed, is one of the printer cartridge importers in Addis Ababa. He has been doing this business for the past five years. As the business has been expanding, he has lately opened shops in regional towns. But recently, his business has been seriously challenged. “Business has come to a ground halt” he said. “The banks have not been allowing enough foreign currency to import the necessary materials we need.”
Oromia Insurance Company (OIC) has recently launched a new product dubbed Index Based Livestock Insurance (IBLI) for pastoralists in Borena Zone, Oromia National Regional State. For farmers and pastoralists in Ethiopia’s drought vulnerable zone, the launching of IBLI is very good news.
Borena has been affected by drought recurrently over the past couple of years. According to the United Nations Office for the Coordination of Humanitarian Affairs, in 2010 and 11, drought in Borena caused serious damage to the rich livestock resources of the region. As a result 412,000 out of a total of 1.29 million people in the region were receiving food assistance including aid provided under the Productive Safety Net Programme.
The direct relationship between export and country’s economic growth is apparent. Economists also insist that if export figures (quantity or earning) fluctuate year after year, uncertainties will emerge in the economy. In turn, these uncertainties build unfavourable pressure on investment. These might, in the end, have negative repercussions on overall growth. Balance of payment crisis also turns out to be the other effect.
In mid February 2010, Ministry of Finance and Economic Development (MoFED) representatives attended a workshop in Mombasa, Kenya. The Workshop was about Integrated Financial Management Information System (IFMIS), which MoFED had planned months earlier.
IFMIS, which is expected to raise efficiency, effectiveness and transparency in financial sector has “successfully” finished its pilot phase, after two years. The pilot project, which consumed USD 19 million, had been running under close supervision of MoFED. Since last September, the project has been moving to implement the system in selected ministries, federal agencies and regional bureaus.
Macro policy is not made in a political vacuum. The political economy context, both internal and external, in which macro policy is formulated, has a strong bearing on the resultant macro policy and hence the macroeconomic environment that private economic agents do face.
Macro Policy making in Africa has been primarily driven by the influence of the World Bank and International Monetary Fund (IMF) (International Financial Institutions, IFIs henceforth) for the last three decades. This is complemented by the political and intellectual support of IMF to the bank. The macro policy that emerged from the IFIs, termed as ‘Structural Adjustment Programs [SAPs]; and ‘Poverty Reduction Strategy Papers [PRSPs], was, and still is, effectively implemented in the continent. This is mediated through aid conditionality.
Berihun Mekonnen
Addisu Deresse
Mikias Merhatsidk
Mango B
Amanyehun R. Sisay
Abiy Wendifraw
Alemayehu Geda (Prof.)