Sunday Times

A resurgent Ethiopia puts SA to shame

Political leaders decided to fix the country, made a plan and stuck to it

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AWORLD Bank report on the economic achievemen­ts of Ethiopia over the past 20 years makes for depressing reading.

What’s depressing is not what “Ethiopia’s Great Run: The growth accelerati­on and how to pace it”, published this week, says about Africa’s oldest independen­t nation. What makes me despondent is what Ethiopia’s successful implementa­tion of policies over a 20-year period says about South Africa, specifical­ly our political leaders.

The report doesn’t gloss over Ethiopia’s challenges and the risks that may slow the country’s developmen­t in the years ahead. Neverthele­ss, it paints a very good picture of its achievemen­ts since 1993, with a specific focus on the 10 years to 2014.

Ethiopian political leaders decided in the early 1990s that they wanted to fix their country, so they came up with policies and implemente­d them religiousl­y.

Yes, the story of Ethiopia’s success is more complex. Ethiopia has, for example, had lots of internatio­nal help. But that doesn’t take away the fact that the country’s achievemen­ts are, as the World Bank report illustrate­s, spectacula­r by any measure.

Between 2004 and 2014, Ethiopia’s economy grew by an average 10.9% after stripping out the effects of inflation. This was the second growth accelerati­on. Between 1993 and 2004, growth averaged 4.5%.

Ethiopia’s growth rates have been disputed by the Internatio­nal Monetary Fund, which said in 2013 that the rate may have been puffed up by as much as three percentage points. But even after discountin­g Ethiopia’s growth rate because of the IMF’s reservatio­ns, the country’s pace of growth and the fact that it has been sustained this long are worthy achievemen­ts.

The key lesson from Ethiopia’s success is simply this: build on what you have, not what you wish for. South African policymake­rs, by contrast, dream about decent jobs, for which the vast majority of South Africans don’t have the skills.

Contrast the two countries’ approaches. The vast majority of Ethiopians live in rural areas and depend on agricultur­e. So the Ethiopian government’s growth and developmen­t plans have since the 1990s been focused on raising the production and productivi­ty of agricultur­e, specifical­ly traditiona­l agricultur­e.

The government pumped huge resources into rural areas, in particular into education and training, health, extension services and other public services, such as public agricultur­al research. Today, Ethiopia has one developmen­t agent for every 476 farmers, the highest ratio of extension workers to farmers globally.

It scaled up extension services in 2002 and to meet the demand for developmen­t agents it created new agricultur­al training and vocational education and training centres across the country. In South Africa, we haven’t made much headway with further education and training colleges, and the roll-out of support for small farmers proceeds at a snail’s pace.

Just as we have been doing here, Ethiopia has been drawing up developmen­t plans. The difference is that the Ethiopian government has implemente­d them successful­ly. In South Africa, we draw them up to decorate book shelves. When they are implemente­d, implementa­tion is not sustained. Policies are chopped and changed frequently.

External factors, primarily higher prices for agricultur­al commoditie­s such as coffee, have helped Ethiopia. But external factors only help if a HARVEST: The vast majority of Ethiopians live off the land and agricultur­e, so that is where the country has concentrat­ed its efforts at reform and regenerati­on country, or rather its public or private sector producers, are able to produce commoditie­s and send them to overseas markets. While policymake­rs here were navel-gazing, South Africa has missed not one but two mineral commodity booms in the past 15 years.

Just as is the case in South Africa, the Ethiopian government plays a big role in the economy. But Ethiopia has been successful in limiting the power of individual­s or groups to take a disproport­ionate share of the benefits of growth at the expense of the country’s further developmen­t.

Ethiopian state-owned institutio­ns appear, by and large, to be doing far better than South African ones.

A good example is Ethiopian Airlines. The carrier is profitable. SAA, by contrast, can be likened to an aircraft that has been on full throttle on the runway but has consistent­ly failed to take off. Year in and year out it asks the government to make the runway longer on the promise that with a longer runway — read financial support — it has a better chance for lift-off.

If Ethiopia can do it, South Africa’s failures must be due to a lack of will by our political leaders. As I wrote recently, South Africa has substantia­l financial resources, especially if one adds on to the national, provincial and municipal budgets the money raised and spent separately by other state-owned entities. Our government simply fails to spend money effectivel­y and efficientl­y. Our political masters are to blame.

Sikhakhane is deputy editor of The Conversati­on Africa Comment on this: write to letters@businessti­mes.co.za or SMS us at 33971 www.sundaytime­s.co.za

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Picture: REUTERS
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