[Bitange Ndemo(PhD) –
Senior lecturer at the University of Nairobi and a former permanent secretary in the Ministry of Information and Communication]
In one of my blog posts, I wrote about Ethiopia’s infrastructure development. As usual Kenyans were in denial but the fact remains that Ethiopia is advancing faster than any other African country.
The World Bank report says “Over the past decade, Ethiopia has achieved high economic growth, averaging 10.7 per cent per year. In 2012, Ethiopia was the 12th fastest growing economy in the world. If the country can continue its historically impressive growth performance, it could potentially reach middle income status by 2025.”
We can choose to continue bragging as the largest and diversified economy in eastern Africa or get our house in order and begin to compete with the rest of the world. It is bad enough to be in a leadership position in a region with countries at the tail end of per capita income.
Free Market Magic
We should at the minimum worry that a neighbouring country is growing twice as much as we are growing. At most we should be trying to catch up with our former peers like South Korea and Singapore.
Our continued foot-dragging culture will translate into a situation where Kenyans will be trying to cross into Ethiopia in search of jobs.
Our false belief that a free market economy will do magic as our leaders crisscross the country in search of a perfect political system will not do it. There is no perfect political system, especially when the players are devoid of any ideology.
It is like trying to shoot at a moving target. And so we think our random approach to economic development is sufficient to deal with chronic unemployment and runaway crime.
The Ethiopian diaspora that has lived in the capitalist West is back home. It is not that these people now embrace communism, but rather that they can predict what the government will do or will not do, going by its Marxist past.
Economist Eleni Gabre-Madhin left her comfortable job at the World Bank to found the first commodities market in Ethiopia. This ambitious vision is working, and soon consumerist Kenya will start buying commodities from Ethiopia. She says her plan would create wealth, minimize risk for farmers and turn the world’s largest recipient of food aid into a regional food basket.
Costly Delays
Gabre-Madhin’s vision will propel the country to greater heights since agriculture that we shun today is back in a big way. McKinsey reports that in the next ten years the world will add 2.2 billion people into the middle class. Africa controls more than 60 per cent of the global arable land, meaning that it is Africa’s turn to feed the world.
Ethiopia understands the opportunities presented, such as the African Growth and Opportunity Act (AGOA) in which Africa has preferential trade arrangements with the United States of America. Ethiopia is today the largest exporter of boots to the US.
Foreign direct investment from China has helped the country develop capacity in shoe production for the export market. Some of Kenya’s hides and skins are exported to Ethiopia raw to satisfy the insatiable demand for materials with which to manufacture for America.
Ethiopia today produces more than 25 per cent of all feature phones sold in Africa. Local favourite Tecno is putting up its third plant in Ethiopia. At least three manufacturers of mobile handsets wanted to set up in Kenya but delays in processing work permits, the bureaucracy of processing other registrations and lack of flexibility to counter incentives given by competing nations denied us the opportunity.
Or Plans Work Elsewhere
I recall one incident in Malaysia when one of the officials narrated about their visit to Nairobi. They were amazed by the city planning, with provision for low-income housing in Jericho, Makongeni, Shauri Moyo and some upcoming middle-income housing in Ngei, Buru Buru and Nairobi South.
There were no shanties at the time and Kenya Bus was always on time. Bus schedules were posted at bus stops. The Malaysians took the plans we had and implemented them. They are forever thankful to Kenyans for providing a benchmarking platform.
I have got this feeling that Ethiopians are implementing our vision. Under the economic pillar, Vision 2030 sought to bring change and improve the prosperity of all regions of the country and all Kenyans by achieving a 10 per cent Gross Domestic Product (GDP) growth per year for the next 20 years.
The first medium-term plan targeted six priority sectors, including tourism, agriculture, wholesale and retail trade, manufacturing, information technology and financial services.
The Ethiopians have surpassed the 10 per cent mark and are likely to record 12 per cent this year. Their agriculture, as I stated above, is doing better by eliminating inefficiencies through the commodities exchange.
In ICT, they are successful in manufacturing light electronic products that were part of the ICT implementation.
Addis Ababa Skyline
In tourism they are excelling, with a first-class wildlife conservation program. While their elephant population is growing, Kenya’s elephant population is declining due to excessive poaching. One of Ethiopia’s greatest problems was hotels, but incentives to the diaspora has seen this change and fully sorted out the problem.
Addis Ababa’s skyline is changing, with many new hotel brands coming up. With its world-class airline, we have a lot of homework to do in order to sustain growth in our tourism sector, which prominently features in our Vision’s economic pillar.
I think I have demonstrated enough that somehow we fail to implement most of our plans that others find easy to implement. In the process of implementation, we fail to see the big picture and often, we are preoccupied with minor errors that we magnify and destroy the vision.
In our attempt to succeed especially with Vision 2030 projects, we shall fail in many ways, but it is not failure that we should focus on but rather the ability to learn from those failures. It is perhaps what Confucius meant with his famous quote “our greatest glory is not in never falling, but in rising every time we fall.” We still have a great opportunity, especially in ICTs, to create massive employment and wealth.
Wealth at the Bottom
What major outsourcing companies wanted in order to relocate to Kenya was the relocation cost. The majority wanted a year’s rent paid to bring in six to ten thousand back-office jobs. Our effort to rent the Sameer Park in exchange for jobs drew such serious resistance that we gave up the idea.
It would have cost Sh360 million a year but the government would have received in excess of Sh1.2 billion in Pay As You Earn tax revenue and some 10,000 Kenyans working. While individuals come and go, we must develop the culture of perpetuating ideas that are beneficial to Kenyans.
In agriculture, we have the opportunity to feed the world as earlier stated. We should, as a matter of urgency, build temporary water reservoirs throughout the arid and semi-arid lands (ASAL) in Kenya. The impending el Niño will fill them up. We could then start serious irrigation programs, especially with horticultural products that already have a market.
For this to succeed, someone must rise up and take the risk to implement what may look like a waste of resources but in effect will create wealth at the bottom of the pyramid.
A healthy competition among developing countries is what we need to compare our successes and failures. Ethiopia is showing the way, and it is time for us to wake up and compete.
*******
* Originally published on The Nation, on August 31 2014, titled “Ethiopia Rising”, authored by Bitange Ndemo (PhD), who is a senior lecturer at the University of Nairobi’s Business School, Lower Kabete campus and a former permanent secretary in the Ministry of Information and Communication.
Leave a Comment