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Indefatigable effort to sustain economic dynamism
Fekadu Wubete
Ethiopia is indeed galloping ahead! High time for friends of Ethiopia and well-wishers to say gee up! According to recent document published by the United Nations Conference on Trade and Investment (UNCTAD), Ethiopia has managed to rank top in the FDI attraction record of the world for the fourth consecutive year, contrary to slump in the Foreign Direct Investment (FDI) in many of the African countries.
World Investment Report of UNCTAD 2017 confirmed that, Ethiopia has drawn noteworthy 3.2 billion USD until last January. Its foreign currency reception capacity has grown 46 percent, compared to its position in 2015. The amount of FDI has scaled up constantly since 2012 while the volume of FDI is showing a moderate decline in many African countries.
Unceasing effort in the construction of Industrial Parks (IPs), investment, construction and agro-processing has enabled the country to miraculously scale up the economy. Hence, the country’s per capita income has increased to 794 dollars from 396 dollars six years ago, while domestic saving capability also registered a remarkable increase during its 2016/2017 budget year by 22.4 percent compared to 17.2 percent six years ago.
The amount is projected to reach 1,777 USD in 2020. And it is a big hit to improve the living standard of citizens and help Ethiopia join the level of middle income countries. This projection glaringly witnesses that the nation is dedicatedly striving to alleviate poverty (and more mesmerizing results are anticipated to be recorded soon).
These days it is uncommon to hear about Ethiopia being praised for its dynamic performance in the economy. Its investment friendly atmosphere has also enabled it to attract more FDI than most African countries below the Sahara. This FDI attraction capacity has resulted in a sizable change in the industrialization and improvement of infrastructure (however, some fear that this huge investment reception capacity may at some point be beyond the absorption level of the country unless it improves the power supply capacity with time, put in place well-managed tax collection system and actively follow up foreign investments).
Paramount achievement is also stemming from investments in infrastructure and manufacturing. Most importantly, the pro-poor policy of the government has enabled to invest huge amount of money on multi-pronged economic sectors that benefit the greater public. This effort is serving as driving force of development to involve domestic and foreign investors. Significant development is also being recorded due to the construction of industrial parks and the efficacy of one-stop shop services.
Commendably, Ethiopia is still leading the way in Africa regarding attracting foreign investors and hard currency amid economic downturn in the international level and sluggish economic performance of countries; witnessing the nation’s unwavering bid to enhance flow of investment, employ thousands of citizens and alleviate poverty.
Ethiopia has attracted a great deal of FDI since its implementation of workable investment policy (that enabled to create jobs for millions of citizens). Currently, the nation is being visited by delegations of multi-national companies and high-profile investors interested to assess investment opportunities and start investment activities in Ethiopia.
Meanwhile, Prime Minister Haile-Mariam Dessalegn with an entourage of high-profile government officials, town mayors, administrators and journalists, among others, had visited the Hawassa Industry Park targeted to herald the official inauguration of the Park. The visitors witnessed the park is unparalleled in the manufacturing history of Ethiopia, in its vastness and diversity of industries.
The PM said the indefatigable endeavor of Ethiopia to extricate itself from grinding poverty has started to gather momentum following the construction of IPs across the country. Particularly, the Hawassa IP has become a model plant to all industrial parks being constructed on all corners of the country. It is the reflection of the country’s policy to accelerate industry-led economy and national vision to protect the environment from pollution; boost pollution-free production; undertake development in an environment friendly manner.
Among the various plants visited were factories that produce shirt and socks. I, the writer, who was present during the visit, would like to testify the very fact that thousands of workers were busy operating machines and discharging their duties. Their way of production from beginning to end is very much sophisticated, speedy and organized. No time and material to waste. The visitors were marveling at the quality of produce being readied to be exported to Norway, Germany and other foreign markets; the site had witnessed the endless endeavor of the country to transform itself from agriculture-led economy to industrial one in the near future and eradicate poverty.
Manufacturing activity being undertaken in the park is tightly managed in line with strict environmental safety laws. It has eyed at protecting the ecosystem without any discharge of pollutants and contaminants in the area. The IP has included state of the art installation, the first in its kind in Africa, erected to recycle liquid waste being released from all factories; the plant has been erected to treat effluent from all factories in a zero-discharge manner, without any leak to the environment. The space age waste treatment plant enables to treat 11 million liters of effluent discharged from all factories in the IP. It also has the capacity to recycle over 90 percent of the liquid waste in a daily basis and purify it for reuse.
The park has a capacity to house over 37 factories and generate revenue of two billion Birr after two years. Earlier, it had been said that the park could generate one billion USD in one year(however, recruiting and employment of workforce, training and other unfinished matters have prolonged the maturity and productivity time of the park up to two years). Whatever the cause, nation is working sedulously to strengthen the productivity of industry parks.
So far, 18 factories had settled in the IP, of which six have started production and are exporting their produce to Europe. The factories that have started production have created jobs to 10,000 citizens. All the plants are expected to create over 60,000 jobs upon starting full operation.
And many more IPs throughout the country are expected to employ thousands of citizens, which is a big relief to their worrying families and jobseekers themselves and means of poverty alleviation in the country. This effort is tangibly enabling the country to shake itself off the quagmire of poverty and ease the sting of abominable poverty in a meaningful manner.
The fathomless endeavor to construct as many IPs as possible has continued unabated. Two parks being constructed in Kombolcha and Meqele towns will start operation by the coming two months. The parks, being constructed by CCCC and CCECC companies in China respectively, had cost over 250 USD.
Both IPs are designed to engage in production and export of apparel and costumes. The factories are believed to exploit the potential of Ethiopia in the production of textile outputs and realize a national vision to generate one billion USD from textile and garment export by 2020.
The construction and inauguration of the Hawassa has initiated the construction of many same parks in almost all regions. Accordingly, the construction of four IPs is expected to be finalized by the end of 2017. The Industry Parks are expected to accelerate nation’s target to become an industrial nation in the near future. In addition, it will help the country to shift from agriculture-led economy to manufacturing and export-oriented one.
Development efforts of the country in the past 26 years have coerced the international community to reckon Ethiopia as one of the fastest growing non-oil economies of the world, which is a remarkable achievement. Furthermore, to successfully realize the MDGs set by the UN, in addition to regular budget being earmarked for infrastructure and basic service expansion, Ethiopia has generously earmarked 12 billion Birr (which is enabling to gain dazzling results).
Similarly, over 70 percent budget of the country is being allocated to prioritized sectors of development that play indispensable role to poverty alleviation, including agriculture, health, and education. To further enhance growth, nation has been implementing the 2nd five-year Growth and Transformation Plan (GTP-2), which has incorporated broad-based development program to achieve the MDGs; rapid economic growth, targeted for 11 percent per year at low and, 14.5 per cent at best case scenario (eying to double the size of the economy by 2015).
Despite all achievements, however, nation understands there is no silk road of development. While starting to see the light at the end of the tunnel, there are challenges and stumbling blocks that should be improved with indefatigable effort; for instance the current growth has been registered through shortage of capital, skilled human power and other valuable resources. And hence, efforts should be exerted to sustain the current level of development and reinvigorate it further; it has become a must for the country to daringly walk the long way to development tirelessly and resolutely.
Undeniably, be it political, economic and social development, the current level of growth being enjoyed by the country can serve as a springboard to catalyze further prosperity. So far, even though the road of prosperity has been bumpy, unparalleled effort of Ethiopia to enhance investment and industrialization has enabled to register double-digit growth for many consecutive years and the nation has to keep the momentum of its economic dynamism.
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