EDITOR’S NOTE: IMF and the World Bank are financiers of genocidal regimes such as the one in Ethiopia. Their blood money is fueling many of the civil wars in Africa. They claim that Ethiopia’s economy is the fastest growing in Africa while 15 million Ethiopians are facing starvation and less than 2 percent of the population has access to electricity.
By Yonas Abiye | Daily Monitor
Addis Ababa — Ethiopia’s economic growth could slow to 6 percent in 2009 as the world slowdown is likely to hit its coffee export, tourism, and transportation the country’s leading foreign exchange earners, the International Monetary Fund (IMF) said on Wednesday.
This is seen to largely contradict with the 12.8 percent economic growth maintained by the government.
Last month, Prime Minister Meles Zenawi said he saw only a 0.6 percent slide from the 12.8 percent economic growth last year owing to the world economic downturn, and said that was not to be considered significant compared to the economic achievements the country is registering, “in the face of the global financial crisis” “It is projected that the global crisis will continue to prevail for the next two or three years, on our side there is a hope that our economy will continue to grow at the same pace,” Meles told a press conference at his office.
But what did the IMF say on Wednesday?
The IMF said the country is one of the vulnerable countries to the unfolding crisis and it is expected to register only about 6% economic growth.
It said Ethiopia is in fact among the poorest the global financial crisis will weigh heavily on and it called for the international community to act “urgently” and “generously” to avoid devastating effects.
Speaking during a round table with the media and stake holders IMF Country Representative Sukhwinder Singh admitted the country was one of the fastest growing non-oil producing countries in Africa.
All the same, the country was no exception and will certainly be affected by the global downturn which is playing its ugly faces in all countries of the world-rich and poor, he said.
He said the impact on Ethiopia will be as bad as a six percent slash from what it managed to register last year.
The decline in export demand of coffee and its decreased price by 19%, the depreciation of effective foreign exchange rates by 30% last year, less tourism and revenue from airway transport are cited as the major factors behind the country’s poor economic performance this year.
85% of exports are going to industrial and emerging market countries who are already suffering major import declines.
He, however, indicated that the country could grasp positive advantage with the lower oil and fertilizer price at the global market.
He noted that in the middle of the year, USD 220 million Ethiopia incurred for importing oil has now gone down to USD 75 million.
He highlighted that, due to the shock induced by global crisis, economic growth projection in pre-crisis and at present is greatly varies.
The IMF forecasted the growth in SSA to be 5% a little bit earlier but it now expects only 3%, Sukhwinder said.
Current account balance in Ethiopia as elsewhere in SSA is worsening and it is currently -5.4% (while it is -2.6% in SSA) with low reserve level but risks are mounting, he said.
“We need 25 billion dollar concessional financing for Ethiopia and SSA as a whole who are most affected countries” he said.
He further indicated that Ethiopia has the highest inflation rate in Africa outside Zimbabwe (26%) and much weaker in fiscal reservation. The average in SSA is 2%.
The International Monetary Fund (IMF) Managing Director Dominique Srauss-Kahn on Tuesday heralded that after first striking the advanced economies and then emerging markets, a third wave of the global financial crisis has begun to hit the world’s poorest and most vulnerable countries, threatening to undermine recent economic gains and to create a humanitarian crisis He also called on the international community to act urgently and generously to avoid the potentially devastating effects of the global financial crisis on the most vulnerable countries. Similarly, the report by the UN Educational, Scientific and Cultural Organization (UNESCO) said that the world’s poorest countries including Mozambique, Ethiopia, Mali, Senegal, Rwanda and Bangladesh are unable to insulate their citizens from the crisis, with an estimated 43 out of 48 low-income countries incapable of providing a pro-poor government stimulus According to UNESCO, reduced growth in 2009 will affect the 390 million people in sub-Saharan Africa living in extreme poverty and a loss of income around USD 18 billion (USD 46 per person).
ILO last month on its part announced that Ethiopia, Kenya and Tanzania, the three East African countries that have reaped from the Western economic growth, are suffering from the reduction of prices in the West as supermarket chains take unilateral commodity price cuts.
14 thoughts on “IMF says Ethiopia’s economic growth could slow to 6%”
” They claim that Ethiopia’s economy is the fastest growing in Africa while 15 million Ethiopians are facing starvation and less than 2 percent of the population has access to electricity”
I hope you are not writing at late night time and i hope are analyzing this before you write. NOTICE, they are saying ethiopia is “fastest growing” economy, not the BEST economy in africa. if they were saying the BEST then people facing droughts would not make sense. but they are saying fastest growing, which makes sense because our country has to come out of a hole that placed us as extremely poor than thousands died in starvation during Live Aid global commercials etc. Since we are coming out of this, TPLF’s small progress seem like big progress. this does not mean TPLF policy is the best in africa. it only means that the deeply bad situation ethiopia was in previously made the current growth be high in percentage.
Elias,
if you are having problem understand. here is more example. let us say there is a rich man (america) and a poor african country (ghana) and an extremely very very poor african country (ethiopia)
if all 3 countries perform equally, will they all have the same growth percentage?? NO!! ethiopia will be fastest because it was in a big hole during mengistu.
another example, let us give number to wealth
USA wealth 90 points
Ghana wealth 30 points
ethiopia wealth 10 points
let us say all three countries added 1 points of wealth. what is their percentage of growth??
USA 1/90 = around 1.2%
Ghana 1/30 = around 3.3 %
Ethiopia 1/10 = 10 %
Do you expect any truth from IMF. Just read the books by John Perkins how these agents are systematically destroying and making these countries subordinate to American imperial rule. http://www.johnperkins.org
IMF and World Bank are just instruments of the West. It has nothing to do with the “reconstruction of the world” as the first main objective of the World Bank was.
The world bank and the International Monetray Fund (IMF)do not make their own investigation and use the figures supplied by the weyanne regime. These two western Institutions suport pro-western regimes in the third world and would not like to tell the truth about the failed regimes they invest in. The weyanne regime is a failed state because it has failed to make a diference uisng the 36-40 billion dollars it has received from the west.The weyanne regime is well known for its lying and has been turning our false economic growth figures while the reality in the country shows the contrary. Famine and poverty are growing and spreading in the country and unemployment among the non-weyanne portion of the population is soaring.
ethiopian economic growth can be mesured in terms of the numbers of farmers who have access to land to till to grow food or graze their animals, the young people who are risking their lives to cross the gulph of aden to reach yemen, the number of young people forced to be drafted to be soldiers to go to war in somalia, ogaden and eritrea, because there are no alternative opportunities in the country, the number of mothers and children who are filling the refugee camps inside and outside the country. In all acount ethiopian growth was negative and there is no way any one can come with positive economic growth to the country. IMF expert is measuring Ethioian growth based on how much bribes they gave to the government and pick a 12% growth, and they predicting to cut their brib by half and predict to 6%, then they are right. But that could be a blessing in disguise for the real Ethiopians, from a weaker government that was supported and imposed by foreigners can hasten their freedom and their neighbours.
Where does IMF and World bank get these figures is beyond my reach? Do they have their own source on the ground? Please someone enlightens me. According to them, for the last 6-7 years the economic growth in Ethiopia, which is mostly underpinned by growth in agriculture sector and government investment in public sector, was persistently registered a double digit figure. I will confess I am neither an economist nor mathematician, but a simple arithmetic tells me with high degree of certainty that Ethiopia with this rate of growth should have been able to at least double the output in agriculture, outpacing the growth in population by many times. If that is the case, where is then the effect of this growth, why is the country more dependent on food aid than ever before and Why can’t we see the effect in one or other form? What is a growth which doesn’t have an impact at all or has net negative effect? If the growth is absorbed only by few, then where is then the trickledown effect? If IMF is getting these figures from EMoF, I can only guess it should have been cooked in the kitchen cabinet of the trio- Melse, Berket and Sebaht. Yes, I don’t deny that there are economic activities and projects which the government undertook to absorb the donor’s money and give them back the report they wanted to have. The goal is not to create wealth, take care the well being of the country and the people as such or any create any other public good but to circulate the donors money into the economies in such way that it easier to loot from it. Most of these projects apart from the roads ones are ill conceived, are not sustainable and do not reach the desirable effect. Just as to name few of these projects created only for sake of hitting big headline I will mention the following: please someone put price for these project if you know:
• Fiber optic project – in country where we have a fiber optic for many years now, a Broadband is virtually non-existence. We haven’t started to get the benefit and a return of this big investment, the next technology based on WIMAX has entered main stream and ICT will be even more affordable for those who had gone to the next level. This will render us to relegated league with digitally permanently deprived society.
• Plasma TV project (apologies for not knowing the right name of the project); in county where there is no decent AV professional studio enough skilled people, I really do not know where do they think they get an appropriate teaching and other materials to deliver across these medium. What will be the rate of return? Do they know the cost benefit analysis?
• A lot of new universities and schools (Projects designed to meet MDG goal with numbers and funded by donors). Apparently in TPLF’s world a wall by itself constitutes a higher learning institute, where are the other core components – the teachers, professors, library, professional support staff, the labs and so on. The wall of these institutes will start to crumble before we get the other components in place. I guess in the future, aberration will become a standard norm among graduates of these institutes, if things are left to continue this way.
• A lot of condominium and high raising buildings built without appropriate standard and due consideration for a lot of things, right next to a big road, without parking place, other utilities this include the privoately bulid one as well (most of condos were created for election engineering) without thinking as to who is going to afford to live, work and sustain life in those blocks. For example when I stepped my foot in dumble buliding for the first time, I found the corridor dark to my surprise, and when I asked the next shop keeper i met to find out why is so dark. He told me without hisitaition that the owner is saving cost. Have you seen the empty condo in debrberahn missing out on affording resident on addisfrotune website this week. I have seen a lot fancy building in Addis without sufficient access road for resident, guests and fire brigades (the building behind the shell of bole road is a good example where once I was stuck in a car for an hour because of gridlock formed by few car trying to access it through the narrow strip alley leading to these building). BTW I do not believe we have fire brigade to tackle fires in these tall buildings, if God forbid fire starts somewhere in the top floor.
Figures apart and more importantly, it is incredible how do we have a such fast rate of growth, when we lag behind everybody on ICT development, persistently score bad in transparency index, have power outage in highly industrialized part of the country every other day, land is so fragmented that the average holding is less than a half a soccer pitch per farmer, where we have an absolute monopoly on import and distribution of fertilizer by party affiliated business, when the public sector is filled with people whose only merit is the loyalty to the ruling party and the inefficiencies they create across the economy is a big hindrance to the growth of a vibrant private sector, where everything is done on ad-hoc basis – let alone sophisticated planning, projecting the demand for such a tangible and crude input as cement even for many of the government infrastructure projects was unattainable objective (BTW so much so for good accounting), where we have highly undeveloped financial sector with the private banking sector is on infantile stage and mostly engaged in import and ayer byayer business, where the rampant inflation is uncontrollable, where the leaders of country at every level are highly and solely preoccupied with the big project of staying in power and looting, where you have an army of people (rent seekers) working only to sustain the regime without a single contribution to the real economy, where the cost structure of any export good and service is higher than any of our competitors by degree of ordnance just because we pay higher duties for port service, inefficient and corrupt bureaucracy, terribly expensive and frequently malfunctioning telecommunication sector and inflexible labor law. Nowhere in the world’s history there was a country which has registered such a high growth with so many negative prevailing conditions. If a country is growing with so many maladies in place, I would like to recommend an Ethiopian Economist to write a new growth theory on basis of this model and I bet he/she will be able to secure a Nobel Prize for that.
BTW has anybody read this internal report of World Bank, it is a quit revealing as to how this kind of big international organization operates. They have two kinds of reports usually one for consumption of the larger public, another one more honest assessment for internal people. Believe me this big institute has in inherent conditions which force them to go to bed with dictators and hostage takers, as many of their employees are directly dependent on existence of a recipient country like Ethiopia, so knowingly or unknowingly they have to work to perpetuate the status quo. Please someone break this dependency.
the URL to the world bank report
http://lnweb90.worldbank.org/oed/oeddoclib.nsf/DocUNIDViewForJavaSearch/B7254927D0BBE8E7852574810052EEB2/$file/EthiopiaCAE.pdf
The IMF experts manufacture growth figures to please their agents in the country. They claim Ethiopia was growing at 12% per year! But we know the fact the country is growing negative 100%. We measure Ethiopian growth by the starving people in the country that doubles every year, by the number of people driven from their ancestral lands to be refugees in foreign lands. We measure by the number of Ethiopians drowning in the Gulf Aden trying to cross to Yemen. We measure by the young Ethiopians who are forcibly drafted in the mercenary army of the country who are sent to fight and die in Somalia, Ogaden and Eritrea. We measure by the number of Ethiopians crowding the refugee camps inside and outside the country. A country that claims to grow at 12% does not manifest the conditions listed above. If IMF experts are measuring Ethiopia’s growth by the amount of bribes they pay to the ruling class and predicting that would be cut by half in the coming years because of the global financial crises, then that will be a blessing in disguise that could hasten the removal of the blood suckers of Ethiopian people. The global financial crises could be the savior of Ethiopia.It was the economic crises of the soviet union that removed DERG government of Mengistu.
all ppl
Economic growth has never been calculated based on the number of ppl starving, number of ppl risking their life to go abroad…………and other bla bla bla.
You can not give a new definition of economic growth today. IMF and WB have all the sceintists of economics to evaluate economic growth. So if you have a brain equivalent to them, go and challenge them instead of giving some nonsense coment here.
The good news is that IMF and WB are slated for radical reform due to their gross failure to predict the current world economic crisis. We will soon celebrate the demise of these two corrupt institutions, which disregard human rights by channeling money to tyrants like Meles.
Anon.8. You must be stupid enough. Whatever the method of calculation may be, the end result of economic growth must be explained by the change in the life of the people concern.
I am challenging the false report of IMF and world bank “experts”. Read Economic Hitman to understand what you read from your experts. Economic growth means more food, water and shelter to the population and by all acount Ethiopia’s economic growth is negative for the last 30 years. Economic growth in Ethiopia stopped after Emperor Haile Selassie.
watch the intrview with the author of Economic Hitman
http://video.google.com/videoplay?docid=808526880666247652
Yes I am an economist and I am challenging the IMF and World Bank economists’ fictitious growth figures for Ethiopia. Economic growth ultimately means more food, clean water, shelter, education and better health services to the population. That is the classical economics of growth. Since the 70s after the removal of Ababa Janhoi from Ethiopia, the numbers of starving people, refugees and poor people have grown astronomically. The environmental degradation of the country is unbelievable while the uncontrolled population growth tripled in less than 30 years. That is not an indication of economic growth for the country. I suggest you read the book “Confession of Economic Hit man”, you would learn who the IMF and WB experts really represent and how they cook up their numbers to push poor countries into debts. Ethiopia is the leading debtor nation in Africa and may be in the world.
please let us focus on our individual effort than pointing government and IMF controvercy. please do all your best to develop your self, that time IMF anounce that ethiopia is growing 100%. bye.