• Embassy of Ethiopia

Prime Minister Hailemariam delivers six-month report to parliament

Prime Minister Hailemariam presented the government’s first report of the fiscal year to the House of Peoples’ Representative on Thursday (February 5). The Prime Minister underlined that Ethiopia’s rapid growth was continuing with Gross Domestic Product (GDP) reaching 1.1 trillion birr and GDP per capita now standing at US$ 632. Discussing the transformation of the economy, he noted that the contribution of the agricultural sector to GDP had dropped from 45% to 40% while industry had increased from 11% to 13%. The service sector share in the economy has also marginally increased from 45% to 46%. The Prime Minister said the economy is expected to register 11.4% growth for the whole year and the agricultural sector is therefore expected to grow by 8.5% overall while industry and the service sector are expected to grow by 23% and 9% respectively. He noted that the revenue from the export sector although reaching US$60.3 million had fallen short of the amount from the same period last year. Revenue from gold, textile and horticulture falling short of targets while coffee and cut-flowers have increased. The total cost of imports was US$10.8 billion. 

In regard to public finance, Prime Minister underlined that the Government was working to curb contraband and regularize the informal sector in order to expand the tax base. In the past six months, revenue of 69.5 billion birr had been collected from tax and non-tax revenue sources. This was an increase of 16.4% compared to the equivalent period in the last Ethiopian fiscal year. While noting that the activities to increase national savings were having tangible effects, he also underlined that a huge effort was needed to increase public revenue. The Prime Minister said Ethiopia’s public debt level was one of the lowest in the world. He also noted that the rating agencies which had rated Ethiopia B and B+ had helped the country to achieve success one billion dollar bond sale. This would make a substantial contribution to increase investment inflows.

Referring to development of the agricultural sector, the Prime Minister said that activities undertaken to increase productivity were bringing commendable results. In the current fiscal year, 28.7 million tonnes of agricultural produce are expected to be harvested. In manufacturing, he said the Government was working to alleviate major bottlenecks associated with infrastructural development and provision of land. He stressed that expansion of industrial zones would be given due attention to encourage the growth of the manufacturing sector. Small and Medium Enterprise Projects had created over one million jobs over the past six-months, he said; and the housing project had constructed 159, 0000 condominiums over the past four and half years. The Prime Minister noted that the Grand Ethiopian Renaissance Dam was now 40% complete; the Gilgel Gibe III Dam project 89% and the Genale Dam project 66% complete. The Addis Ababa Light Railway project was 87% complete; and the Addis Ababa–Dewaleh project 80% complete and should become operational next Ethiopian year. In addition, the Prime Minister mentioned that women’s participation in local government councils has reached 32; remarkable achievements had been made in reducing the maternal mortality rate by 69% over the past 20 years. Prime Minister Hailemariam welcomed the widespread and active participation in the forthcoming election and urged everyone to ensure that the election in May would be free, peaceful and fair.

The Prime Minister also spoke on foreign policy, underlining that Ethiopia’s policies of mutual cooperation and mutual benefit were yielding positive results in the strengthening of cooperation with neighboring countries and partners. He said the Ethiopian Public Diplomacy mission to Cairo had been successful in promoting Ethiopia’s stance over equitable utilization of the Nile Waters. He said the Government’s engagement with the Government of Egypt had resulted in the resumption of the Tripartite Talks. These were continuing. The Prime Minister said the sanctions imposed on Eritrea should be fully applied and continued as Asmara was continuing its efforts to destabilize the region. He said the international community was well aware of Eritrea’s behavior. The Prime Minister welcomed the 10 year strategic plan signed between Ethiopia and China to boost their strategic partnership particularly in the area of infrastructural development. He also hailed the US-Africa Summit as an important landmark in promoting relations between the two areas, and he cited President Obama’s remark that Ethiopia provided an exemplary model of progress and security and the US’s desire to strengthen cooperation. He said his visit to Germany had been successful, allowing vital discussions on bilateral and regional matters; and the German Government’s announcement that it would provide financial guarantees for investors in Ethiopia was important for attracting investment.

The Prime Minister also briefed the House on the strategic partnership with Djibouti which he said was expanding in all possible areas of cooperation. He noted that the bottlenecks that had occurred in port service and logistics had been addressed after successful political consultations, and referred to the   successful meetings of border administrators which had helped to alleviate problems. Overall, the Prime Minister said Ethiopia’s strategic partnership was continuing to grow, and he said Ethiopia wanted to bring the bilateral relation of the two countries a notch higher by scaling up social and economic ties in addition to security and military cooperation operating at the level of joint border patrolling.

The Prime Minister highlighted efforts being made to increase Diaspora participation in the economy and in Ethiopia, and reminded the House of the dedication of the year 2007 as Diaspora Mobilizations’ Year. He said efforts were underway to put in place the necessary regulatory framework to launch the Diaspora housing program.

Following the presentation of his report the Prime Minister responded to questions.  On the question of agricultural investment, he noted the Government was working to rectify bottlenecks that had been delaying projects and said it was undertaking detailed studies on land prepared for agricultural investment, focusing on identifying suitable land for agricultural products and improving infrastructure. He acknowledged that maladministration at local government level had played a role in causing problems for agricultural investment. The Government was working to resolve this. He told the House that the Government would not tolerate political parties that attempt to disrupt the election process, and he regretted smear campaigns against the National Electoral Board. This, he said, showed disrespect to the institutions established by the House and the Ethiopian People. He said that parties should rather consider their own internal cohesiveness or lack of it, rather than blame the Board for any internal divisions.  The Prime Minister emphasized that the Government will continue working to increase the numbers of women in decision-making roles at all levels. 

On South Sudan, the Prime Minister noted that Ethiopia would continue to support the efforts to enable the South Sudanese factions reach a final peace settlement to bring lasting peace to their country. He cited IGAD’s unrelenting attempts in this, hosting eight mediation meetings. He said Ethiopia was currently hosting a number of South Sudanese refugees equivalent to the population of the Gambella Regional State. He said Ethiopia’s role was supportive and it was the leadership and the people of South Sudan who must bring peace. The Prime Minster also responded to a number of other questions on development, on tax, and on pastoralists as well as other issues.

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