GTP II: A lost cause?
Ewnetu Haile
Even after three years into its tenure, implementation reports of the second Growth and Transformation Plan (GTP II) still prove to be the holy grail of the media. I have witnessed in quite a number of occasions that some presenters in governmental offices and even brochures deal with the performance reports of GTP I and the GTP II document itself to evade the lack of information on implementation of the current five year plan.
I was, therefore, very excited when a friend of mine told me that he got a copy of the two and half years performance report of GTP II. It is really saddening that the information is not as available as it should be. Perhaps the delay in getting the document public says something about the level of performance. Let’s look into it:
GTP II sets out to register an average annual GDP growth of 11%. The two and half years performance report, however, indicates that there was an 8% growth in the 2015/16 fiscal year while that of 2016/17 was 10.9%. The planned average growth for the two year was 11.2% and 11.1% respectively. Therefore, the economic growth plan for both years was not realized. The document raises the ill-effects of the 2016 drought and the strain on the Ethiopian export market created by plummeting international export item prices.
On a positive note, the per capita income surged from 693 USD in 2015 to 801 in 2016 and 863 USD in 2017. That is a significant gain. However, it is worth considering that the birr was devalued by 15% against the dollar in October 2017. Such a huge margin of devaluation can have a negative effect on per capita figures.
The agricultural sector registered a meager growth of 2.3% in 2015/16 although the planned growth was 8.2%. The following fiscal year, the growth rate for the sector went up to 6.7% against a plan of 8.3% for the year. The industrial sector, on the other hand, grew by 20.6% in 2015/16 against a plan of 21.8% for the year. In the 2015/17 fiscal year the growth rate fell down to 18.7% while the plan was to register a 20.6% growth. The service sector grew by 8.7% in 2015/16 against a plan of 10.3% annual growth. In 2016/17 the growth rate for the sector climbed to 10.3% against a planned goal of 10.2%.
The performance of the agricultural, industrial and service sectors over the two fiscal years indicates that they all fell short of the planned goals. Although a few of those performances surpassed the goal set by a negligible amount or fell short by a very small margin, the general point to take is that the performances are below the goals set by the plan.
The inflation rate for the 2016/17 fiscal year was 7.2%. During the first six months of the 2017/18 fiscal year though, the figure jumped up to 9.9%. The inflation rate for food items during that period was 12.6% while that of non-food items was 7%. The double digit inflation growth in the first six months of the 2017/18 fiscal year is said to be related to the devaluation of the birr in October 2017 and the hardship in disseminating food and non-food items during the political unrest in various parts of the country.
In 1996, 45.5% of the total population of the country lived under poverty. That figure shrunk down to 29.6% in 2011. The sharp descent continued as the figure hit 23.5% in 2016. The performance report indicates that a total of 5.3 million people have come out of poverty in the five years between 2011 and 2016.
The main objectives of GTP II include: 11% average annual economic growth rate, achieving economic transformation and restricting inflation rate to single digit. As discussed above, the growth rate during the two years of GTP II was below the goal set in the plan. Although the contribution of the industrial sector to GDP has increased over the first two years of GTP II, all three sectors have performed below the goals set for them. The project to realize economic transformation is not going to be feasible when the sectors are not performing according to plan. The fight to keep inflation rates to single digit has also been lost in the battles of 2017/18.
These considerations give us a gloomy picture of the performance of the Ethiopian economy over the past couple of years. However, there are some positives related to the rise of per capita income and the number of people taken out of poverty. These sizeable growth rates were achieved through the political instability of the past three years. The relatively more stable and hopeful condition created over the past four months can be used as a basis for changing things around. The high morale, sense of unity and hope that Ethiopians currently have can be used as a spring board to change the course of performance of GTP II.
The new found media freedom, the improved sense of respect for human and political rights, the improved sense of public service and the strong stand against corruption all create a suitable condition to mobilize people, increase their productivity and push developmental achievements to a new high. Accordingly, the coming two years prove to be vital towards realizing the goals set in GTP II. If garnered wisely, the huge popular support the government is enjoying thesedays can be used to orchestrate an epic developmental victory.
Finding a way to quickly put a stop to the breaches of security in some parts of the country should come first in mobilizing the people. For when peace is guaranteed along with the high morale of the past few months, the below par performance of the GTP II period will quickly be reversed.