Ethiopia’s fast-paced growth has defied Afro-pessimists, but a strong economy is not a panacea to all of the nation’s woes

Ethiopia’s fast-paced growth has defied Afro-pessimists, but a strong economy is not a panacea to all of the nation’s woes

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 ‘No one can blame Africa for the weather, but most of the continent’s shortcomings owe less to acts of god than to acts of man. These acts are not exclusively African… but African societies, for reasons buried in their culture, seem especially susceptible to them.’

This excerpt was lifted from an article by The Economist in 2000 entitled ‘Hopeless Africa’. It was jarring. Jarring not least because of the thinly veiled colonial attitudes reminiscent of Kipling’s ‘White Man’s Burden’, but the fact that it came from a publication as reputable, and mainstream, as The Economist.

Much of the continent’s shortcomings were indeed caused by acts of men, but the roots of fear, brutality, and despotism in its culture trace back towards its European predecessors, not its African rulers. Men like King Leopold II of Belgium, the orchestrator of the ‘Congo Horrors’ or Lord Salisbury, the overseer of the Boer concentration camps, tore apart the very social fabric of Africa and left the continent in a perpetual state of indigence.

Eleven years after the publication of the article, The Economist rebutted its former stance and struck a far more positive tone in its 2011 piece ‘Africa Rising’. Citing a growing middle class, cross-border commerce, and strengthening infrastructure, The Economist singled out Ethiopia as the continent’s success story.

Ethiopia is Africa’s second most populous country with 102 million inhabitants located in the Horn of Africa. It is landlocked by six other countries but its access to the Nile ensures that it is not fully sequestered from the global market. Between 2005 and the year of The Economist’s article in 2011, Ethiopia’s economy grew by an average of 10.5% per year (double that of the regional average). Since 2011, Ethiopia has largely maintained this level of GDP growth, averaging a slightly lower 7.6%.

Ethiopian leaders have professed a bold ambition to fully modernize its economy by 2030, and according to UN representative Eugene Owusu, this objective “is what drives everything the government and people are doing”. The country has made great strides in a number of key human development areas: child mortality has halved, those with access to clean water has doubled, the number of people living in abject poverty has dropped by 20%, and as of last year, Ethiopia entered into phase II of its Growth and Transformation Plan, a national five-year-plan seeking to push GDP growth above 11%. To achieve this goal, the government plans to expand its physical infrastructure through public spending.

Yet, the government’s dogmatic efforts to increase GDP growth risks the charge of parochialism. A more serious concern for the government is the stubbornly highly level of unemployment in the country, which has persisted since the 1990s. Currently, unemployment in Ethiopia is 16.5%, down from 26.4% in 1999.  While this 10% decline is commendable, there are deeper-lying issues in the labour market that are yet to be redressed.

Paradoxically, it is sweeping improvements in education that have exacerbated the unemployment problem. To give a statistical snapshot, the number of primary school enrolments have quadrupled, three out of every four children are now literate, and over 150,000 Ethiopians graduate from university each year. This high number of graduates is problematic for the Ethiopian government. Ostensibly, more graduates entering the workforce is beneficial for the economy because there is a greater supply of high-skilled labour in the market. However, in a manufacturing-based economy like Ethiopia’s, there is very little demand for such high-skilled labour. As a result, there is a mismatch between skills and job requirements, leaving a vast number of graduates unemployed.

Youth unemployment is not a problem unique to Ethiopia. The World Bank estimates that under-25s account for 60% of Africa’s unemployed, a figure that is especially disconcerting when a survey led by the same group in 2011 found that 40% of those who joined rebel or terrorist groups did so out of a frustration at a lack jobs. In Ethiopia, terrorism is nowhere near as rife as it is in the neighbouring Somalia but a latency remains. The Somalian terrorist group Al-Shabaab presents a threat across the East Africa region and there have been bomb explosions in the capital this year that have been linked to the group. The most effective deterrent that the Ethiopian government could employ would be to, well, employ. There have been huge levels of Chinese investment into major federal projects in Ethiopia. Most notably, the construction of the Grand Renaissance Dam, a hydroelectric dam that will be the largest of its kind in Africa, has created over 6000 jobs in the country. By mobilising and training Ethiopia’s unemployed youth towards public works programmes like these, the government can reduce the allure of radical groups.

A rendition of the Grand Renaissance Dam

With projects as expansive as the Grand Renaissance Dam, it is easy to lose sight of the fact that Ethiopia is still a very poor nation, ranking 173rd out of 186 in the world. Contrary to the argument forwarded by the now-infamous Economist article, acts of God have played a particularly destructive role in Ethiopia. Over the past century, there have been seven major famines, the most recent of which began in 2015 and its effects have lasted to this day. In spite of the country’s capacity building and updated infrastructure, the government could not cope with the severity of the crisis, enduring three successive seasons without rain. Such was the impact of the drought that approximately 8.5 million Ethiopians became dependent on food aid. Earlier this year, Bill Gates argued in an interview with CNN that the productivity of African farmers was less than one-fifth of their American counterparts, borne out of lack access to information. By reducing this information deficit, Gates asserted that Africa could replicate the green revolution of the 1960s in South Asia and prevent future food crises from occurring.

Ethiopia has reached a critical juncture in its history. High levels of public and private investment remain integral to Ethiopia’s elevation towards a modernised economy but the government, as with many others, must find a way to exploit its young workforce. It would be reductionist to liken the issues facing Ethiopia to the continent as a whole, but what is beyond doubt is that Africa is not a ‘hopeless’ continent. The future for both country and continent appears bright, not bleak.

 

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