When the government exclusively ratified and approved the two Growth and Transformation Plan (GTP) editions, independent experts critiqued it as highly ambitious and unrealistic. The administration took ten years to acknowledge the reality. Still, the Council of Ministers approved an even more ambitious Ten-Year Perspective Plan (TYPP) in early December 2020 in a bid to chart out an economic execution plan up to 2030. Strikingly, no independent experts were allowed to forward their viewpoints and solutions regarding major hurdles persisting in Ethiopia’s economy.
Export, structural transformation, and housing are some of the major new wines poured into old glasses. Most of the superfluous figures anticipated in the document, which target achieving quality growth and elevating Ethiopia to prosperity by 2030, are planned to be executed by a similar institutional implementing capacity which was the Achilles heel of past plans. Ashenafi Endale delved into how long-term economic targets become unrealistic under politicized ambitions.

Since 2015, anti-government protests, conflict, and instability have been ravaging Ethiopia. Especially in the past two years, the breakdown of law and order has become the new normal. Thousands have lost their lives and in 2018, 2.3 million were internally displaced—a world record high. In fact, in the last two and a half years, excluding the latest operation in Tigrai, 113 conflicts have erupted across the country. As a result, the federal government’s expenditure to secure public order and security swelled from ETB14.2 billion in 2017/18 to a staggering ETB24.2 billion in 2019/20. Though without a known updated figure, the latest operation in Tigrai is sure to compound Ethiopia’s security bill. EBR’s Ashenafi Endale explores the direct and indirect costs of conflict and instability, as well as the overall economic losses.

As a developing country, the Ethiopian economy is largely characterized by the informal sector with studies indicating its expanding size. The International Monetary Fund estimates that in countries in transition, like Ethiopia, the underground economy accounts for as high as 40.1Pct of GDP. Although the government has been taking different measures to reduce the role of the informal sector, these interventions have failed to materialize. However, the government now says its latest measure of replacing currency notes with new ones is positively working in that direction. But experts disagree with the government’s concision by saying the expansion of the informal economy is highly interconnected with the formal economy’s failure to produce enough goods to satisfy national demand. EBR’s Ashenafi Endale reports.

Ethiopia, which has undergone political turbulence in recent years, has now fired a direct shot at the nation’s lingering macroeconomic imbalances by unveiling a new generation of currency notes on September 14, 2020. In addition to the replacements of the old Birr 10, 50, and 100, a new 200 Birr note was also issued by the government. The five Birr note remains unchanged and will soon be turned into a coin. While the government stress that the introduction of new currency notes is part of the ongoing economic reform in the country, critics argue the move is rather driven by politics and an assertion of power. EBR’s Ashenafi Endale explores.

Ten-year plans are not that common in the national planning endeavors of modern Ethiopia. Five-year plans, on the other hand, spell the standard for the governments that have administered the country since the 1950s. Breaking that tradition, the incumbent has formulated a Ten-Year Perspective Plan (TYPP). Ashenafi Endale looks into the five major criticisms scholars raise against the planning document.  

Cut-throat Moves to Legitimize Cutting-edge Technology

The paramount friction between science and nature resumed afresh in Ethiopia, following the government’s commercialization of GMO varieties through selected farmers and the appreciation report released by the US Department of Agriculture (USDA) in February, 2020. Following the amendment of Ethiopia’s strict biosafety laws in 2015, half a dozen farmers in Gambela and Benishangul regions cultivated Bt cotton in 2019 for the first time. The move is soon to be followed by GMO maize and Enset. Government officials and proponents of the technology argue that GMO is the silver bullet to do away with food insecurity. Nonetheless, growing anti-GMO groups are concerned over what they call ‘the irrationality’ behind the governmental rush for GMO. The poor productivity of the first GMO farms is also a major setback for proponents of the latest GMO manoeuvring around Ethiopia’s millennia old agriculture. EBR’s Ashenafi Endale investigates the debates to offer this report.

Why is it Outside the Banking System?

Just two months ago, Ethiopian Bankers Association (EBA) recommended change of currency to the government in order to reduce the amount of money circulating outside the banking system. The bankers thought this would improve the liquidity of commercial banks. However, the recommendation received a mixed reaction among the finance community. Many argue that the major reason for the sharp rise in the amount of money outside the banking system is the cash-based transaction system in the country. Economists also say that changing currencies cannot stop money laundering. They say, introducing monetary reforms is the best way to deal with the problem. EBR’s Ashenafi Endale reports.

Can it Help Africans Recover Quickly?

Africa accounts for 20Pct of the world population but only makes up three percent of the world GDP, at USD2.6 trillion. The implementation of the African Continental Free Trade Area (AfCFTA) would, however, set in motion the largest regional free trade area in the world. Signed by all African countries, except for neighboring Eritrea, the agreement was supposed to be put into practice next month. However, the Coronavirus pandemic rushed in to steal its light as it did to a number of other plans around the world. Against all odds, some argue that now is the best time to launch the agreement across the continent as global supply chains are disrupted and being reconsidered by countries across the world. Even some go far as to claim AfCFTA would help African countries quickly recover from the impacts of the pandemic. Nonetheless, many say this may not hold true for Ethiopia as a few export commodities mark its comparative advantage. Haimanot Ashenafi, in her special report to EBR, explores.

Is it Coming to an End?

It has repeatedly been demonstrated that major international events have the ability to shift paradigms. The post-cold war period identified by the emergence of the United States as the sole super power with other regional hegemons roaming their localities pushed neoliberal policies to the forefront of intra and inter-state relations. With considerable external pressure to adhere to these neoliberal approaches along with the theory’s revamped academic acceptance worldwide, states jumped on board. Accordingly, opening up markets and export promotion became widely accepted approaches. The Coronavirus pandemic has, however, shown that the hectic international trade practices centered on import and export in a highly globalized world have left states, both developed and underdeveloped, a long way from self-sufficiency. EBR’s Ashenafi Endale looks into the impending rise of import substitution in a post-COVID-19 Ethiopia.

When news of a new strain of Coronavirus came out of China almost four months ago, the world seems unimpressed with the potential danger it posed. It has, however, taken the invisible microbe less than three months to literally make the whole world its empire. Its social, economic and political impacts have poured water on other burning issues of the world and left them on the backburner. Especially the world economy has been hard hit by the pandemic. The fates of businesses and potentially billions of employees hangs by the balance. Different sectors of the Ethiopian economy have also faced the wrath of the invisible microbe. EBR’s Samson Berhane and Ashenafi Endale delve into the global, regional and national economic impacts and emergency measures.