Ethiopian Ten Years Development Plan: Ethiopia 2030

A Road to Prosperity through Inside — Out Approach

Written by Esubalew Ginbar

Ethiopia has been among the fastest-growing economies in Africa with an annual growth rate consistently well above the African and global averages. This outstanding performance contrasts with the slow progress in structural transformation, lack of economic diversification and weak productive capacity. In order to overcome these socio-economic and development challenges, Ethiopia has prepared and implementing ten years development plan recently.

In fact, it is over six decades since Ethiopia adopted a planned approach to development. In the last two decades, the main drivers of the economic development agenda in Ethiopia have been the five-year development plans that the country has been implementing since 2001. Altogether, Ethiopia has launched four consecutive five year development plans including the Second Growth and Transformation Plan (GTP II) (2015- 2020) — to guide the overall development of the country. The first three plans gave due priority to propoor economic sectors including agriculture, while the latest plan gives more emphasis to industrialization, particularly manufacturing. As a follow-up to GTP II, and in conjunction with the homegrown economic reform agenda, the government has prepared a ten-year development plan and ratified by parliament recently to serve as a strategic roadmap and policy direction for the coming five to ten years.

In line with ten years development plan, the homegrown economic reform (HGER) with the central objectives of sustaining rapid growth, maintaining stable macroeconomic environment by reducing debt vulnerabilities and creating adequate and sustainable job opportunities has, therefore, been domestically initiated. The economic reforms are being translated into action through policy that enhances the suppy side of the economy. The main aim and focus of the HGER is the enhancement of productivity and competitiveness of the overall economy, and a gradual transition from public to private sector-led growth. The HGER plan was classified into macroeconomic reforms, sectoral reforms, and structural reforms.

The ten-year development plan has emphasised the linkages between various sectors of the economy. The plan recognizes the high interdependence and interconnectedness of the various productive sectors, particularly, modern agriculture, manufacturing and mining through input-output linkages. Trade and logistics, as well as services, were also closely coordinated with the productive sectors of the economy in order to improve their efficiency by linking sectional products with the markets. Similarly, infrastructure development (transport connectivity, energy, irrigation, communications, etc.) were planned in such a way that the development of one sector would serve as the base for the development of other sectors, while human resources and technology, which are decisive factors for ensuring productivity, have been planned in a similar approach so that the coordination would enhance the development of all other sectors.

Additionally, taking institutional weaknesses as the major challenge of the country, the ten year development plan identifies major long-term development goals and targets on the premises of a wholistic institutional transformation over the coming years. The ten-year plan idenitifies the private sector as the leader in productivity and growth enhancement, and the promotion of the private sector as the engine of economic growth is expected to strengthen public-private partnership.

The key strategic pillars of the ten-year development plan are: ensure quality growth, improve productivity and competitiveness, undertake institutional transformation, ensure private sector’s leadership in the economy, ensure equitable participation of women and children and build climate resilient green economy.

On average, in the next ten years, the country economy is targeted to have grown by 10.2 percent. In order to bring about structural transformation of the economy, the share of the agricultural sector in GDP is projected to decrease from 32.6% in 2019/20 to 22% in 2029/30. The share of industry, on the other hand, is projected to rise from 29% to 35.9% and that of the service sector would increase from 39.5% to 42.1%. Within the industry sector, the share of manufacturing is projected to grow from 6.9% to 17.2%. The unemployment rate in urban areas is expected to down to a single digit and stand at nine percent. Furthermore percentage of population below poverty line is projected to decrease from 19% in 2020 to 7% in 2030.

The overall development goal is to achieve improved welfare of the society by improving the standard of living and quality of life that are captured in the broader national prosperity vision. These development vision and objectives will be achieved through key strategic pillars which are primarily focused on addressing the deep-rooted macroeconomic, sectoral, and structural bottlenecks of economic, social, administrative, and institutional development of the country.

Generally, the ten-year development plan lays a long-term vision of making Ethiopia an “African Beacon of Prosperity” by maintain sustainable growth and achieve structural transformation, as well as attaining equitable distribution of wealth and shared prosperity in 2030.

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This Article is previously previously published on the horn African times; under the link https://hornafrican.blogspot.com/2021/06/ethiopian-ten-years-development-plan.html