Billion-dollar building binge squeezes out Ethiopia’s poor

(HorntTrade) – One of the world’s biggest aid recipient countries, Ethiopia has for the last ten consecutive years claimed more than 10 per cent economic growth annually, and has predicted 11 per cent for this year.

The International Monetary Fund estimates growth has on average been seven per cent, and would slow down to 5.5 per cent next year. But apart from the disparity in figures, it is widely agreed that Ethiopia has consistently been one of Africa’s fastest growing economies, even if from a weak base.

This growth is coming at the altar of mega infrastructure projects being built at dizzying speed, as Addis Ababa has ignored western calls for caution in favour of a wider social welfare net instead for its tens of millions poor.

To fund the billion-dollar projects, Ethiopia has now put on the market dozens of state-owned enterprises, leased out big chunks of its arable land, assiduously courted foreign direct investment and tightened its tax collection noose.

Even cyber cafes have not been spared, with a sales tax slapped onto customers’ internet bills.

Stretched budget

The aggressive infrastructure drive has led to a stretched national budget, with the nation’s tens of millions poor particularly feeling the pinch as spending on basic services suffers.

Teachers were recently up in arms over a misery salary increase, while the urban poor have found themselves on the ropes as they continue to be left out of already anaemic national poverty alleviation plans.

The spending on big projects is anchored on a five-year Growth and Transformation Plan, for which the government has struggled to raise funds.

 

Source: Africa Review

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