The Need for Evaluation Mechanisms in the Public Sector

Ethiopia’s public-led growth model, while partly responsible for the country’s rapid economic growth, isn’t without its faults. Project delays, cost overruns, and potential corruption all plague large-scale public infrastructure projects. Some economists recommend an evaluation mechanism that allows public entities to better track the progress of their projects. But these, too, aren’t always foolproof. EBR’s Ashenafi Endale spoke with experts to learn more about the promise and limits of employing evaluation mechanisms in the local context.

Even though Ethiopia’s economic growth is continuously lauded by international organisations, unemployment rates among young people remain high, reaching as much as 44.9Pct for people aged 20-24. Experts argue that the causes are multifarious and require comprehensive solutions. If not, then the long-term consequences may prove detrimental for the nation’s economic growth and image. EBR’s Tamirat Astatkie spoke with researchers to learn more about the challenges of youth unemployment and what’s being done to mitigate its potential effects.

Numerous multilateral organisations, including the World Bank and African Development Bank, note that corruption is a severe hindrance to a country’s development goals. Despite this reality, corrupt practices manifest themselves in a number of ways in Ethiopia – perhaps most notably in the misuse of public funds used for mega construction projects. In some cases, monies that were given to these projects go missing, unaccounted for, or are misallocated, resulting in delays or overspending. These phenomena are especially problematic, as publicly funded projects are meant to benefit the general population and are usually beholden to strict deadlines and budgetary constraints. In fact, according to the Auditor General’s Report, the Ministry of Education and a number of public universities have mismanaged around ETB2.08 billion in the 2014/15 fiscal year. EBR’s Ashenafi Endale consulted stakeholders and research to gain more insight into the potential mishandling of public funds and offers this report.

The last version of the Addis Ababa Master Plan spurred riots in the State of Oromia due, in part, to accusations of unfair land acquisition. The latest draft version of the Plan, which will likely be ratified, has many residents in the capital upset, especially those who’ve had their homes demolished in the name of development. Of course, any drastic development plans are likely to receive mixed reviews from the public – but is the Addis Ababa City Administration handling its development and expansion efforts in the most efficient manner? EBR’s Ashenafi Endale spoke with government representatives, experts and residents to find out.

A country’s broad money supply refers to money in its various forms – be it notes, coins, currency deposits or even credit from banks. When the supply is increased, it can have beneficial or disastrous effects, from spurring economic growth to increasing inflation to astronomical levels, which has a deleterious impact on quality of life, especially in developing countries. As Ethiopia aims to continue its path of double-digit economic growth, EBR’s Samson Hailu spoke with economists and government officials to learn more about the debates surrounding broad money supply and where it fits in to the country’s overall development aims.

For developing countries, foreign currency is a necessary component to the success of manufacturing, overall industrialisation and greater inclusion into the global economy. Specifically, manufacturers, the purported backbone of what the Ethiopian government hopes to be a robust industrial sector, need foreign currency to import materials that are central to their enterprises. However, the country is facing a severe shortage of these funds, a dynamic that isn’t likely to change soon. To put the demand in perspective, the Commercial Bank of Ethiopia approved USD3 billion in foreign currency requests in two months, whereas the Bank earned that amount in the first six months of the current fiscal year. Furthermore, the government has meagre foreign currency reserves. So what’s being done to mitigate the situation? EBR’s Ashenafi Endale spoke with key insiders to learn more about the implications of the shortage and its potential solutions.

Ethiopia’s Commercial Code was enacted in 1960 and many argue that it’s time to revise it to better reflect the changes the country has experienced and current international economic and political dynamics. But what’s the best way forward? Government officials state that they’re working to codify new laws that will govern business practices – and that they’re drawing on internal experts to do so. However, others argue for better transparency and that calling upon international experts from more sophisticated economies – whether they’re Ethiopian or foreigners – will only help to better align the policies with the best practices of other countries. EBR’s Bantayehu Demile spoke with leading experts and researched the nuances of the issue to explore the tensions around the possible revision of the Commercial Code.

Hoarding refers to the deliberate withholding of goods from the market, usually to create false demand and raise prices for certain commodities. According to the Addis Ababa Chamber of Commerce, the practice is prevalent throughout the country. While fairly common in developed nations, hoarding can be problematic for fragile economies like Ethiopia, where the Consumer Price Index is heavily impacted by food inflation. In order to exert more control over hoarders, the government is enacting a number of plans to quell the practice and its negative effects. EBR’s Bantayehu Demlie spoke with stakeholders and researchers to learn more about the problem, its implications and what’s being done to prevent it in the local economy.

Remittances have proven to be a viable way to earn foreign currency. Last fiscal year Ethiopia earned USD3.8 billion this way, which is 27Pct more than export earnings. By some estimates, the country could earn nearly USD21 billion from remittances in five years. This can help fund financing gaps that emerge due to poor export performance, decreased bilateral funding as a result of recessions in developed countries, and meagre foreign direct investment (FDI). Experts note that remittances have the added benefit of exposing more people to formal financial systems. To that end, a number of banks are working to improve their services to bring in more foreign currency. Some people, however, feel that the ambitions of the banks and the government may be premature. EBR’s Fasika Tadesse researched the nuances of the issue to gain greater insight into the potential of remittances as a means of financing Ethiopia’s ever-expanding development.

Eyeing the Stars Ethiopia’s Space Programme

Astronomers have made great strides in understanding and accessing space within the last century. In particular, the development of satellite technology has helped in the growth of technologically and economically advanced countries. This is because satellite technology assists in the development of telecommunications infrastructure and disaster preparedness, among other things. Now, Ethiopia is hoping to benefit from satellite technology through the advancement of its own space programme. The government says that this will aid the country’s aspiration towards development. However, critics say that it’s too soon for Ethiopia to pursue such an ambitious plan and that the country has other pressing concerns to manage. EBR’s Ashenafi Endale spoke to key stakeholders on either side of the debate to learn more about the country’s nascent efforts to develop a space programme – and the potential challenges and benefits that lie ahead.