A resurgent Ethiopia puts SA to shame
Political leaders decided to fix the country, made a plan and stuck to it
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