Shifting from agriculture to industry
Gemechu Tussa
Surprisingly Ethiopia moved some steps forward amid a number of challenges it encountered with. It’s political, social and economic gains in the past two decades in general and the first Growth and Transformation Plan in particular is so remarkable, which also enhanced human development.
The experience gained in those years could be used as an input in implementing the country’s second Growth and Transformation Plan. One of the major ingredients in the second national plan is working industriously so as to complete some of the mega projects that have launched in the first national plan. Besides, there are three major pillars in the Sustainable Development Goals that seek to foster economic and social development as well as environmental protection goals.
What is most significant in the first and the second national plans could be the major focus that agriculture and industry are the principal targets of the two plans respectively. The second GTP gave greater emphasis to industrial growth, particularly to the manufacturing sector.
Ethiopia is an agrarian economy. It has a large number of manpower. That is why the government gave priority to invest on the agricultural sector and then integrate it with industry. The first GTP has taken that fact into consideration while focusing on agricultural development.
The implied notion in preferring agricultural led industrialization policy is the fact that more than 85 per cent of the people live in the rural area and rely on agriculture. Therefore, the need to invest on agriculture first emanated from this fact and considerable endeavors have made to transform the agriculture sector.
The past twenty five years witnessed that the number of farmers who transformed themselves is so momentous. They managed to produce high yield crops through irrigation, water harvesting and using fertilizer. While the agricultural productivity increased from time to time, efforts to integrating it with the industry has also considered seriously its development has been showing an upward trajectory.
Due to this integrated effort of raising agricultural products and developing the industry along with the leading agricultural productivity enabled the country to reduce its poverty stricken people from time to time that poverty has fallen from 40 per cent in 2010 to 26 per cent in 2013.
The struggle to alleviate poverty and ensure sustainable economic growth has continued. It will also continue in the future as the people have considered poverty as their arch foe. They have determined to work indigenously in order to meaningfully alleviate poverty. In doing so, the country has also already identified some gaps that would have to be addressed in the second to provide more opportunities for the youth and women.
In the second GTP, Ethiopia aspires to become successful in light manufacturing including textile, apparel, leather and agro processing, which he termed as key areas where Ethiopia wants to secure more support. That is why the government has been aggressively working in expanding industrial parks to facilitate the sectors development.
Developing the industrial sector contributes to diversify export. In this regard, the country targets to increase its export revenue to 12 billion USD in the next three years. The government targets to boost export revenue by 29 percent in each year of the second Growth and Transformation Plan.
The national plan also incorporated improving health situations as its major pillar. There will be a plan to improve the quality of health services. In this regard, the government will do its level best to ensure quality and equitable health services in the second Growth and Transformation Plan period.
The ultimate goal is to develop the industrial sector so that the government has planned to reduce the shares of the agricultural sector in the Gross Domestic Product to 36 percent from its current level of 40 percent its sectors in its second national plan. Therefore, investment will represent 41.3 percent of the GDP in the GTP period that lead the industrial sector to grow by over 18 percent.
Economic analysts argue that the manufacturing sector will play a major role to attain the objectives of developing exports. Besides, air transportation and tourism will contribute considerably to fetch hard currency. The manufacturing sector will also focus on light industries, while the government has planned to give special attention to heavy industries.
In Ethiopia, the agricultural sector will continue to be a major contributor to GDP in the coming years as well. It is expected to grow to 406 million quintals by the end of the second five year plan through fostering irrigation systems that will be developed over four million hectares of land.
The attempts done so far aimed at developing the agriculture sector and enable the people feed themselves, thereby, integrated it with the industry. In the first national plan there were a number of mega projects that aimed to lay basis for structural transformation. The hydro power dams, the sugar development projects as well as the booming investments are believed to facilitate the economic transformation.
In this regard the execution of the second GTP will play a significant role. It will help to develop the industrial sector by far what it looks like now and improve participation of the people in all social and economic engagements. In the second GTP, ensuring quality of education is also one of the priorities that the government considered. This could in turn help the country to have well skilled manpower that could shoulder the structural transformation.
The expansion of industry needs well trained manpower. That is why ensuring quality education has considered as one of the pillars in the second national plan. Along with it the health sector is not also ignored. It is an integrated approach that helped the country to transform its agriculture led economy to industrial led economy within the shortest possible time. Shifting from agriculture to industry though not easy is inevitable. Ethiopia is working hard to transform its economic structure and surely it will attain it.