Indecision Drains the Economy of Its Strength




When we take a step back, we can see clearly how to advance. Change agents practised this several times over their span of leadership, especially just before making significant decisions. Quietly and with confidence, they were able to acquire the strength and energy to accomplish what they sought.

But this does not mean procrastination. Consultations, dialogues and analyses are essential before any decisions are made. Nonetheless, there should be clear deadlines set lest processes become bogged down. Every moment that passes by will exacerbate the political and economic ills that already exist. It should help us cross the bridge that is overshadowed by fear of change.

The notion of irreversibility is esteemed out of invigorating and renewing an indomitable spirit. The same spirit will push us at each stage. This is the doctrine with which Prime Minister Abiy Ahmed (PhD) is moving forward, one all of us should learn from.

Such change is necessary for our poor state of the economy, which suffers from inflation, debt stress, trade imbalances and supply shortages. There is a consensus amongst economists that a gradual opening of the economy, where selected industries are protected, is the correct path to take. For long, what has been missing is the political will to push forward with such change.

Those who dare will do and those who dare not, will not. The nation has achieved many developmental goals faster than was thought possible, such as in improving access to education and health. We have even managed to grow our economy in the double digits. Being a part of the global economy is a similarly achievable endeavour if only we can work past the short-term inconveniences.

An important question to ask is, do we have the right mix of expertise and workable regulatory framework that can deal with an economy that is modernising?

Most of our institutions do not have a broad vision and are bogged down with policymakers that do not take note of the long-term possibilities and a bureaucracy that is slow and unreceptive. It is as if our watches have stopped half a decade ago, and we expect the old ways of doing business to still apply.

The country’s monitory and fiscal policies require serious analysis. Some of them have contributed adversely to the private sector, the growth of financial institutions. Ethiopia’s economy is as a result state-centric, where the government controls major sources of wealth such as land, foreign currency and government contracts.

These have not only fallen captive to corruption, delays and loss of quality but have crowded out the private sector. They have been detrimental to the grand visions of the country and brought about socioeconomic ills because they have determined how wealth can be allocated.

The nation, as a result, has lost not just global competitiveness but also its ability to compete in the region. The solution for these is not only inspiring the need to change but moving along with reforms with a set of deadlines. Previous growth models, despite having their benefits, cannot carry the nation’s ambitions for long. The wise approach would be to learn from global approaches and move forward by starting with the African corridor.

We have a substantial economic opportunity at our fingertips. Kenya, Djibouti, Sudan and Egypt all present trading and economic opportunities that are beneficial to Ethiopia. Setting up bilateral agreements with these countries, amending current regulations and growing the capacity of public institutions should help us curb our macroeconomic woes.

The most significant roadblock is the lack of political will and indecisiveness. The current Prime Minister and his outward-looking approach could be the best antidote to this. He has reiterated that Ethiopia’s economic potential is more prominent than its currently projected state. It can grow faster and grow healthier if only businesses are exposed to better competition at least within the region the nation is a part of.

 



By Asseged G. Medhin (kolass799728@yahoo.com)
Asseged G. Medhin is the Deputy CEO of Operations at the National Insurance Company of Ethiopia (NICE). He can be reached at kolass799728@yahoo.com.

Published on Sep 15,2018 [ Vol 19 ,No 959]


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