J Bonsa analyses Ethiopia’s economic growth over the last ten years.
More than 70 people have been killed and dozens wounded in an ongoing crackdown on peaceful protesters in Oromia. One of the underlying causes of the prevailing tense political situation is Ethiopia’s bogus claim about “miraculous” economic growth in the last decade.
The youth is not benefitting from the country’s supposed growth and doesn’t anticipate the fulfillment of those promises given the pervasive nepotism and crony capitalism that underpins Ethiopia’s developmentalism.
The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) came to power in 1991 and briefly experimented with democratic transition. However, a little over a decade into its rule, the party’s former strongman, the late Meles Zenawi, realized that their pretentious experiment with liberal democracy was not working. Zenawi then crafted a dubious concept called, “developmental state.”
Stripped of the accompanying jargon and undue sophistication, Zenawi was simply saying that he had abandoned the democratic route but would seek legitimacy through economic development guided by a strong hand of the state. This was a ploy, the last ditch attempt to extend EPRDF’s rule indefinitely.
Using fabricated economic data to seek legitimacy and attract foreign direct investments, the regime then advanced narratives about its double-digit economic growth, described with such catchphrases as Ethiopia rising, the fastest growing economy in the world and African lioness. The claims that EPRDF has delivered economic growth at miraculous scales has always been reported with a reminder that it takes several decades to build democratic governance. The underlining assumption was that, as long as they deliver economic growth, Ethiopia’s leaders could be excused on the lack of democracy and human rights abuses associated with the need for government intervention in the economy.
EPRDF spent millions to retain the services of expensive and well-connected Western lobbying firms to promote this narrative and create a positive image of the country. These investments were also accompanied with a tight grip on the local media, including depriving foreign reporters’ access if they cross the government line. Ethiopia’s communication apparatus was so successful that even serious reporters and analysts started to accept and promote EPRDF’s narrative on rapid economic growth.
However, a few recent events have tested the truthfulness of Ethiopia’s economic rise. Drought and the resulting famine remain the Achilles heels of the EPRDF government. The government can manipulate data on any other sector, including the aggregate Gross Domestic Product, and get away with it, but agriculture is a tricky sector whose output is not so easy to lie about. The proof lies in the availability of food in the market, providing the absolute minimum subsistence for the rural and urban population.
The sudden translation of drought into famine raises serious questions. For example, it is proving difficult to reconcile the country’s double-digit economic growth with the fact that about 15 million Ethiopians are currently in need of emergency food aid.
Except for some gullible foreign reporters or parachute consultants, who visit Addis Ababa and depart within days, serious analysts and students of Ethiopian economy know that authorities have often fabricated economic statistics in order to generate fake GDP growth. To the trained eye, it does not take a lot to find inconsistencies in the data series. In fact, Ethiopia’s economic growth calculus is so reminiscent of Enron accounting. (See my recent pieces questioning EPRDF’s economic policies, including anomalies in the alleged achievements of millennium development goals, crony businesses, devaluation, external trade and finance.)
The tacit understanding in using GDP as a measure of economic growth is that responsible governments generate such data by applying viable international standards and subjecting the data to scrutiny and consistency checks.
Unfortunately, these standards are not foolproof; irresponsible governments with mischievous motives can abuse them. There is credible evidence that shows Ethiopian authorities deliberately inflated economic statistics to promote feel-good, success stories.
Let’s take the agricultural data, which is timely and topical given the ongoing famine. This came to light recently as the European Union tried to understand anomalies in Ethiopia’s grain market, particularly persistent food inflation which the EU found incompatible with the agricultural output reported by the Central Statistical Authority (CSA) of Ethiopia.
The EU’s Joint Research Centre (JRC) then developed the technical specification for studying the scope of the Cereal Availability Study in order to account for the developments in the Ethiopian cereal markets. The International Food Policy Research Institute (IFPRI) was selected to carry out the study.
Figure 1 (above) compares the EU-sponsored survey and the Ethiopian government’s survey produced by the CSA. I am using the data for 2007/08 for comparison. The negative numbers indicate that the IFPRI estimates were consistently lower than the CSA data. For instance, CSA overstated cereal production by 34 percent on average. This ranged from 29 percent for maize to 44 percent for sorghum. The actual amount of Teff produced is lower by a third of what’s reported by the CSA.
The research team sought to explain this “puzzle” by examining the sources of the confusion, the methodological flaws that might have led CSA to generate such exaggerated economic data. Toward that end, they compared CSA’s crop yield estimates with comparable data from three neighboring countries: Kenya, Tanzania, and Uganda (see Figure 2).
From 2000 to 2007, the average increase in cereal yield for these countries, including Ethiopia, was 19 percent. Yet the CSA reported a whopping 66 percent for Ethiopia’s yield growth. The country was not experiencing an agricultural revolution to justify such phenomenal growth. It is unrealistic that Ethiopia’s yield growth would be greater than the neighboring East African countries, particularly Kenya, where the agricultural sector is at a much more advanced stage. If anything, the reality in Ethiopia is closer to Uganda, which did not report any yield increase during that period.
This reveals the extents of data manipulation by Ethiopian authorities to create an inexistent economic success story and seeks political legitimacy using a bogus record. We now know the widespread distortions in official statistics on cereal production thanks, in no small part, to EU’s intervention in sponsoring a study and explaining the disparities. Cereals represent only a sub-sector in the agricultural realm. It is likely that worse distortions would be revealed if similar studies were done on Ethiopia’s growth statistics in other sectors, including manufacturing and service divisions.
The IMF has praised Ethiopia for achieving accelerated growth with a focus on equity and poverty reduction, a challenging dilemma for most countries. However, a closer look at three interconnected facts turns this claim on its head.
First, as noted above, Ethiopia’s agricultural output has been inflated by 34 percent on average. Second, a 33 percent poverty reduction since 2000 is widely reported. Third, there is a consensus that poverty reduction has happened mostly in rural Ethiopia. Now we put these three facts together and apply a simple logic to establish that the 33 percent poverty reduction is explained by the 34 percent exaggerated agricultural outputs. Notice that it is not by accident that the two percentage points are almost identical. Therefore, the ups and downs cancel each other out. In the best-case scenario, poverty rate must remain at the same level as in 2000.
The World Bank, IMF and other donors have often anchored their conclusions on poverty reduction on alleged changes in the agricultural sector, where the bulk of the poor live and work. Little do they know that the data they used to compute the poverty index comes from agricultural statistics with hugely inflated yield assumptions as shown above.
This raises the question: where has the billions of dollars in bilateral and multilateral aid pumped into Ethiopia in the name of poverty reduction and the millennium development goals gone?
‘The enclave economy’
The ‘Ethiopia rising’ storyline is a standard set by foreign correspondents who often repurpose official government press releases, or reports based on the construction projects in the capital, Addis Ababa.
For example, Bloomberg Africa’s William Davison, often uses the proliferating high-rise buildings in Addis Ababa as tangible evidence of Ethiopia’s double-digit economic growth. In his latest whitewash, Davison writes, “such growth is already visible in parts of the capital, where shopping malls and luxury hotels are sprouting up.” That a veteran reporter for a business website unashamedly passes judgment on economic success by referring to heights and width of buildings underscores his shallow understanding of the country’s social and political fabric.
Here are some of the questions that reporters aren’t asking and seeking answers for: Who owns those building? Where did the investment money come from? Are there any firm linkages between these physical infrastructures and the rest of the Ethiopian economy? I have partially answered some of these questions in a previous piece and will soon provide additional insights.
For now, I would like to draw attention to the existence of an “enclave economy” within the mainstream Ethiopian economy. This enclave is made up of highly interconnected crony businesses, which are owned and operated by Tigrean elites, who also have a tight grip on the political and military command structures. Take, for example, the Endowment Fund for Rehabilitation of Tigray (EFFORT), a business conglomerate affiliated with the Tigrean People’s Liberation Front (TPLF). EFFORT has its humble origin in the relief and rehabilitation arm of the TPLF. However, it has undergone amorphous growth and now controls the commanding heights of the Ethiopian economy. By some estimates, EFFORT now controls more than 66 business entities.
The EFFORT controlled enclave and related military engineering complexes have created a semi-autonomous economy in Ethiopia. They made smart choices and specialized in engineering and construction businesses. This means they do not have to rely on the Ethiopian public for their products; instead, each specialize in separate industrial branches and buy from each other and also sell to the government, which is also in their hand. The huge government infrastructural projects necessitated by the “developmental state” model create business opportunities for these engineering companies.
The enclave economy is only loosely linked to the mainstream economy and it does not benefit the bulk of the Ethiopian people in any meaningful way. The luxury hotels and supermarkets that Davison refers to cater for the needs of the affluent business classes, their families, and the expatriate community.
In other words, Ethiopia’s miraculous economic growth, if it in fact exists, must have happened only in the enclave economy. Statistically, it is possible to generate a double-digit economic growth at the national level through a combination of some real astronomical growth in the enclave component and stagnation or declines hidden, through some accounting tricks, in the rest of the economy.
Lock-in style of reporting
Unfortunately, the unquestioned reporting on Ethiopia’s economic success has continued. Even the EU study appears to have been shelved, or deliberately ignored despite the significant findings. Even as a fifth of the population is in need of emergency aid, the World Bank is sticking with the outdated data and has recently released a sensationalized report entitled “Ethiopia’s Great Run: the growth acceleration and how to pace it.”
The ensuing famine has shaken the foundation of Ethiopia’s growth narrative, yet western NGOs and media outlets appear to suffer from the lock-in effect in adopting consistent storylines. They continue to link and refer to the World Bank, IMF and others reports and indexes by multilateral organizations.
That’s why we continue to see comical headlines such as “Ethiopian Drought Threatens Growth as Cattle Die, Crops Fail,” which assumes that Ethiopia’s growth is actually occurring. This acquiescence does not only display ignorance, but it also underscores an effort to evade accountability for previous mistakes and failure to report accurate information.
In a recent interview with The Ethiopian Reporter, Prime Minister Hailemariam Desalegn made a rare and fateful admission: “if we crave for too much praise for our achievements, we might run the risk of undermining the challenges we are facing. These challenges could grow bigger and become irreversible and that would be detrimental.”
Over the past 25 years, the EPRDF worked tirelessly to create a distorted image of the country and began craving and lobbying foreigners for praises.
Enron’s success involved an elaborate scam, but the firm was named “America’s Most Innovative Company” for six consecutive years. This fame did not stop Enron from crumbling. EPRDF’s fate will not be any different. The Oromo uprising has already started the unraveling of its elaborate scams devised to attain legitimacy on the back of non-existent economic and democratic advancement.
J. Bonsa is a researcher based in Asia.
This article was first published on OPride.
The views expressed in this post are those of the author and in no way reflect those of the Africa at LSE blog or the London School of Economics and Political Science.
I wonder when the Ethiopian government say that it achieved economic growth. but, the really is different. The first thing is There is no development at all. the country is best explained as with rampant corruption, State terrorism, human right abuse, and dictatorship. Unfortunately the regime managed to receive Billions of western aid in the name of hungered peasants and oppressed people. unemployment and poverty , the country is more expressed. There are many young people who migrate from their country to Arab world, south Africa,Sudan and Europe because of lack of opportunity and brutal regime governance. The country really become cruel and cursed since the regime took power in 1991. I always pray to my almighty God to End this Evil regime.
You are delusional J. Bonsa. No matter what, Ethiopia is fighting poverty and is going to be great again. So is Africa. Just read em and weep. How dare you call the economic growth fake ?
You just wait and see. You are going to eat your own words.
Did this comment age well i wonder?
The democratic transition may be fictitious, but so are all the tall claims made by the author nicely summarised in a conspiracy-inspiring headline. Claims but no facts. Waste of time and worse, misleading, misguiding and seriously destructive criticism. Author’s most serious references are, not unsurprisingly, his own articles. He uses words like crony capitalism and parallels with ENRON to discredit the government he may or may not have a reason to have gripes with, and then displays his ornamentaly fallacious argument with phrases like “The enclave economy is only loosely linked to the mainstream economy” only to say, a few sentences later there is no growth occurring in Ethiopia (economy).
Criticism is needed, but articles like this will only make matters worse. For a truly balanced opinion (but that, perhaps, was not the intention), the writer, who we are given to understand is based in Asia, ought to have interviewed the small businesses, the entrepreneurs, the numerous very small scale industries (including foreign entrepreneurs) in the capital, and all the urban population who live within a short distance of the quickly improving/ expanding road (and soon to be functional) rail networks, to better understand the remarkable difference the lose link between the “enclave” and mainstream economies. Things are far from perfect but nowhere as erroneous as J Bosna would have us believe. As for the drought, a country which depends on agriculture, is vast and only loosely connected through roads and 90% of that agriculture is perennial, neither technical miracles nor economic growth (even real, very tangible one) can prevent droughts in the short term.
It is very very unfair to say “claims but no facts!” What is going on? What more evidence do you want? The facts are plainly laid out in front of you, e.g. graphically displayed in those bar charts! Those facts were dug out by well designed survey based scientific study.
For your information, surveys are scientific methods of data gathering. And I do not have to rediscover the will, if facts were already gathered, I can just use them. Using secondary data are standard methods in social science research.
Apparently, you want us to recalculate the entire GDP of Ethiopia, covering all sectors including SMEs, just to convince you, otherwise, it looks you would have none of the arguments. You seem to refuse accepting any partial evidences.
Good try but that is not the way intellectual discourses take place. There is something called logic and commonsense, which we have to apply to triangulate issues and close gaps. Ever heard the term deductive methods, which enables you to reach some conclusions by carefully thinking through known facts.
I am replying for the benefit of other readers, otherwise, I know you are interested in applying the usual tactic of moving the goal post. The regime cadres are trained in offering familiar delay tactics – when challenged on lack of progress in democratic governance, then your familiar excuse is “it takes long time”, forgetting that it is already long time – 25 years! Any dissent on lack of economic progress, then you would argue back provide “full evidence”, all fro the sake of buying time, extending EPRDF’s tenure in power. It may not work any more, you cannot continue to win a chess game, repeating the same moves.
If the economic miracle was true, I do not mind eating my own words. But you and I know very well that there is no meaningful “economic growth” in Ethiopia. None whatsoever!
For instance, the share of manufacturing (at constant prices) in Ethiopia’s aggregate GDP was 3.4% in 1991 and 3.7% in 2012, i.e., 0.3% rate of structural transformation in the Ethiopian economy in over 25 years (for further details, see my piece entitled Is devaluation of birr the answer to Ethiopia’s economic troubles? http://www.opride.com/oromsis/articles/opride-contributors/3771-is-devaluation-of-birr-the-answer-to-ethiopia-s-economic-troubles). Are you proud of this? If manufacturing is in this dire state, what the hell has been growing then? People who do not care about substantive growth, rooted in sound structural transformation of the economy, throw around numbers related to growth occurring in agriculture and services. Even the most diehard EPRDF supporter accepts the fact that manufacturing is stagnant but the “growth miracle” is taking place in the service and agricultural sectors.
In this piece, I have provided credible evidence that agricultural growth has been calculated replying on ENRON style accounting, and for very obvious reasons, to cheat donors that “poverty has been falling rapidly”, etc. The growth in the service sector does not need any study of the type EU sponsored for agriculture. It is pretty obvious. The new millionaires are engaged in frantic construction works to stay afloat. Their client is the public sector, through which the Ethiopian people are forced to buy unwanted commodity from crony businesses, through dubious deals mediated by a government, which they never elected in the first place.
What else is changing in the service sector? Two candidates. The bloating public sector. A huge amount of financial and manpower resources are engaged in building up security apparatus, in 1:5 ratio, multiple layers of administrative structures, down to extent of grouping community members in groups of 5 individuals, each group being controlled by a security agent. And the security agent is a salaried personnel and such data enters GDP with a fancy name, “compensation of employees”.
Yes, GDP can get inflated through proliferation of such economically meaningless activities in the enclave economy and the public sector, sidelining the rest of the Ethiopian economy and with no benefit accruing to the Ethiopian people at large. The other obvious non-productive public sector is military expenditure. It is such bogus stuff that are being counted as GDP which growth in double digits.
I’m also guilty of being an Addis hotel analyst as that’s the limit of my exposure to Ethiopia.
But one thing I can say as a Kenyan, is that Ethiopia and Rwanda have some attraction for new investors in that when either of those governments makes a promise to a foreign corporation, they will are more likely to be be delivered – e.g. land will be availed, work permits will be issued, and other concessions will roll out from the state. Whereas in Kenya, the investor has to navigate and negotiate with many independent authorities – local government, immigration, environment, land buys ( i.e. more red tape)
First of all i would like to commend you on your well articulated words. But unfortunately the data that sits behind those words is utterly wrong and by far not correct. To give you some idea about where Ethiopia has been through for the last 25 years, as some one who lives and sees the truth first hand,
many properties owned by the government during the previous regime have now been privatized and are in the process of privatization, Except certain sectors such as telecommunications, financial & insurance services, air & land transportation services and retail, which are considered as strategic sectors and are expected to remain under state control for the foreseeable future.
The Derg regime killed this country with communism ideology from the USSR, which did not do well for the USSR themselves. If you do proper studying from the Haile Selassie era to the current regime, the economic graph starts improves to its peak during the royal era and decreases to its lowest point during the Derg regime. Over the past 25 years, it is clear to see that EPRDF with its economic architect Meles Zenawi, struggled and worked hard to bring this country back to where it should be. To clarify the truth for you, the Gross Domestic Product (GDP) in Ethiopia was worth 54.80 billion US dollars in 2014. The GDP value of Ethiopia represents 0.09 percent of the world economy. GDP in Ethiopia averaged 15.67 USD Billion from 1981 until 2014, reaching an all time high of 54.80 USD Billion in 2014 according to reports by the World Bank. Whether you like it or not, that is the truth. I do not know where you got your data, but you certainly did not collect it from here personally.
Here is more data from African Development Bank and a link as proof.
In 2013/14, Ethiopia’s economy grew by 10.3%, making the country one of Africa’s top performing economies and this strong growth is expected to continue in 2015 and 2016.
Owing to a co-ordinated prudent fiscal and monetary policy stance, inflation has been contained to single digits since 2013.
Federalism and devolution of power to the regions are paving the way to overcoming geographic and socio-economic barriers to inclusive growth and structural transformation.
The International Monetary Fund (IMF) ranks Ethiopia as among the five fastest growing economies in the world. After a decade of continuous expansion (during which real GDP growth averaged 10.8% per annum), in 2013/14 the economy grew for its 11th consecutive year posting 10.3% growth. Over the 12 months from July 2013 (the country’s fiscal year runs from July-July), all of the economy’s main sectors performed well. Agriculture (which represents 40.2% of GDP) grew by 5.4%, industry (14% of GDP) expanded by 21.2% and services (46.2% of GDP) rose by 11.9%. This positive growth should continue for the coming two years, although constraints on private sector development could slow its momentum.”
You can read more on http://www.afdb.org/en/countries/east-africa/ethiopia/ethiopia-economic-outlook/
Can you send me a credible link which shows the source of your data?
Ethiopia’s tragedy these days is multi-faceted. It is not just EPRDF blocked opportunities for democratic governance, not just that the country could have only a fake economic growth. The severity of Ethiopia’s brain-drain means there aren’t that many professionals left behind with whom to have an informed and sensible debate.
In his own way, Daniel is trying his best to engage in an intellectual debate but it is not working. The issue we are talking about here is rather complex but he brings it down to some infantile level. Did I say there is scarcity of references on Ethiopia’s fake economic growth?
The essence of my argument in the piece above is all about Ethiopia’s economic growth accounting is based on ENRON style bookkeeping, numbers are cooked up! The fabricated numbers are not only used domestically but also proliferated all over the world, including entering databases and publications of multilateral agencies, like the African Development Bank.
Now you quote back to me the recycled lie, as if you are making a reference to a scripture. You ask me to provide you with similar links, which suggests to me that perhaps you do not know that the texts in the red font in the article are LINKS which are supposed to be clicked to access the underlying sources.
At the very least, they should have informed trainees such things during a week or so crash ICT course that the regime provides before it dispatches its army of internet warriors.
When you deny data from some of the most credible financial institutions in the world, then you are either turning blind eye or are more disillusioned than I had initially anticipated. You share some news link and propagate wrong data from human rights watch and etc. provided to you by those outsiders with their own agenda.
First of all, I provide real data from credible sources. Secondly, I live here and experience all these things first hand. Do you live here? NO! Do you have access to any real data arising from here? NO!!! All you have is some link you shared from some news sites.
And for your information, the government has done its best to provide education for the masses with what this poor country has. It provides opportunity and anyone who uses it wisely will benefit. You talk about red fonts and links? You make me laugh. i am fluent in five programming languages(three of which are internet programming languages). I compete with anyone and excel in any technology from anywhere in the world, still with fewer resources. This generation is so much smarter than you. We do not have the time to engage you in a debate.
I hope that donors and reporters will one day wake up and do their due diligence instead of echoing wayane’s narratives just because they are easy and sound good.
Why do i have a feeling that you did not read the article?
@Anwar; It is clear i have to read the article enough to be offended and angry enough to take time from my busy day-to-day work and say something about what these so-called ‘analysts’ write. I am an Ethiopian who lives in Ethiopia and sees first hand what is being done in my country. I refuse to let my Ethiopia being used by these so called academicians and writers and analysts to earn a few dollars by entertaining the interests of Ethiopia’s enemies.
But the good thing is, Ethiopia is rising again and whether they like it or not, we will make it!!! We will be great again, the dam will be complete, we will have great economic ties with our neighboring countries and poverty will be eradicated one day.
Well it is well written article. I can see some of your points are viable however, for one to state there is no Economic growth in Ethiopia, whatsoever is i believe a little hasty generalization.
You mentioned ENRON accounting system and how they (the government) manipulate the numbers to cheat donors that “poverty has been falling rapidly”, etc. Really? If the donors are that stupid Kudos to the Ethiopian Government.
I don’t know how you looked at it but even though industrialization is a means to spur ones economic growth, in a country like Ethiopia where there is a large fairly educated youth people on the rise, and being second most populous nation in Africa, service sector has a huge role for the economy, including our Defense Engineering.
That being said it’s not that we are marginalizing our potential to see what we can achieve as a nation…we are at the baby stage where a trial and error method is still visible in the country. That’s why they refer it the”Ethiopian Way” model where we have seen growth in FDI, local small Businesses, and increase purchasing power from our farmers.
You can name few such as Ethiopian Commodity Exchage, ECX, as a model that helped farmers to have the most upto date info on the price of grains and commoditis traded on ECX. That in return benefiting everyone specially the farmers to lead a better life. Is it enough? May be not but it’s a progress.
Also, a lot of people have invested in different businesses to increase their Assets through company ownership program. An idea of modern stock market in a traditional way of doing businesses.
Schools have been another factor worth to mention that is impacting how the citizens of the country value the importance of education in order to increase their income.
Overall, we are in place where the people of Ethiopia spends close to $6M USD in the last 5 yrs on artificial Christmas Trees and ornaments from being refereed as “Do they know it’s Christmas ” on a famous or infamous live AID concert some 27 years back.
The real evaluation and judgment of a country’s economic performance would have rightly come from the heart and mouth of the citizens who are living it. If the Ethiopian economy has been growing by the said rate during the last 25 years, why would Ethiopian risk engaging in a desperate migration at all cost, risking their life? Over the last many years, annually tens of thousands of girls and women in their young ages have been migrating to the Middle East countries to earn meager income form themselves and their families back home. Thousands of young men have crossed the border and took a dangerous journey of weeks and moths all the way through east and southern African countries to reach South Africa. If the economy grew well it should have been possible for the millions of Ethiopian families that are currently facing draught as effect of the weather calamities, to have a backup or saving to bridge the gap for some months of the year in the event of harvest failure faced this year. Even in the normal weather cropping years, in a popular food security related program that has been running over the last 15 years in different forms (like the Productive Safety Net Program), food security of over 7 million Ethiopian have needed a foreign support every year. A study report entitled ‘Ethiopia: An analysis of recent economic growth and potential challenges’ (http://www.pambazuka.net/en/category.php/features/90435) states that in addition to its reliance on food aid, Ethiopia is highly dependent on external economic assistance. In 2011, Ethiopia was the world’s fifth largest recipient of official humanitarian aid and received $3.6 billion in total assistance, the latter figure representing between 50-60 percent of its total budget.
There is no reason why the UNDP report on HDI fails to capture Ethiopia’s impressive economic growth achievement claimed to have taken place over the years. The HDI published by the UNDP in 2004 indicates that Ethiopia stands among the last 8 countries with low human development index i.e. 170th out of the 177 countries. The last country in the list had a HDI of 0.273 while Ethiopia’s HDI was 0.359. (See http://www.nationsonline.org/oneworld/human_development_low.htm). After 10 years, in 2014, the UNDP HDI puts Ethiopia among the poorest 15 countries of the world at 173th in the rank of 187 countries. The report also indicated that Ethiopia has the lowest HDI even by African Standard. Ethiopia’s 2014 HDI of 0.442 is below the average of 0.505 for countries in the low human development group and below the average of 0.518 for countries in Sub-Saharan Africa’ (UNDP: Briefing note for countries on the 2015 Human Development Report, Ethiopia, pp 7). Why would a growing economy borrow a loan as small as 5 million US dollars and the accumulated debt is such an enormous that foreign debt to GDP ratio now reaches over 50%? A source that quoted the World Fact Book indicated that Ethiopia had an average Public debt (Percentage of GDP) of 42.7 (% of GDP) in the last 5 years from (2008 to 2013). The ratio reached 50.4% in 2013. Should we accept that Ethiopia’s reported illicit capital flight of Billions of dollars in the recent years is true? A report by Global Financial Integrity reads that The African Nation Lost US$11.7 Billion in Illegal Capital Flight from 2000 through 2009. Corruption, kickbacks and bribery are on the rise in Ethiopia. (Source: http://www.gfintegrity.org/press-release/illicit-financial-outflows-ethiopia-nearly-doubled-2009-us3-26-bln-says-new-gfi-report/). If one trusts the World Bank, IMF and AfDB’s reports on the performance of the Ethiopian economy, she/ he has to also trust this one on IFF, as well.
Finally, a true economic growth is normally expected to translate to a betterment in the people’s over all wellbeing in multidimensional way including personal freedom and respect for human rights. It is a living evidence that Ethiopia to date has not achieved these qualitative yardsticks. It is one of the top countries repeatedly blamed for repression, lack of freedom of speech, imprisonment of several journalists, tens of thousands of ordinary citizens for having or alleged to have relation to different political opinion, lack of people’s decision on their own will and in life. In this respect a reference can be made to a measure of progress in national wellbeing, The Social Progress Index (SPI), which provides a comprehensive framework for measuring the multiple dimensions of national social progress, benchmarking success, and catalyzing greater human wellbeing (http://www.socialprogressimperative.org). This measure has been developed for countries of the world based on measurement of 52 indicators under three major categories: Basic Human Needs, Foundations of Wellbeing and Opportunity. In 2015, Ethiopia’s SPI was 41.04 ranking 126th among the list of countries. Ethiopia’s score in opportunities which includes detailed indicators like political rights, freedom of speech, freedom of assembly / association and others 25.76 rendering it ranking 115th.
okay very very nice well regarding this above document : now the coming soon almost all Ethiopian can use decentralized financial system because this exaggerated report can be detained only decentralized system other way there is not any change in Ethiopia next step will be dangerous all concerned government body familiarized corruption and lack of truth.