Ethiopia, Africa’s second-most populous nation, is planning for GDP growth of 10.8% for the fiscal year ending June 2020. Last year it grew 9%, the National Bank of Ethiopia said in January. To achieve its growth targets, Ethiopia will change course and do things it has never done before: by June it will have sold at least six of Ethiopian Sugar Corp’s plants to private sector players that include local farmers. More state-owned assets across industries will be sold this year.
SA, on the other hand, is on course to report another economic recession when Stats SA releases the numbers for the last quarter of 2019. In the third quarter the economy shrank 0.6%, adding to the 6.7-million unemployed people on our sunny shores. That represents an official unemployment rate of 29.1%. Of course, the real jobless rate for the period was 38.5%.
For 2020, SA’s GDP will probably rise only 0.7%. In response (and unlike Ethiopia), SA will continue to do exactly what it has been doing for the past 10 years. It will throw more money at the bankrupt companies owned by the state, the very companies responsible for destroying immeasurable amounts of value. SA will also continue to employ the most incompetent managers to continue helping corrupt and equally incompetent politicians steal the additional resources.
While Ethiopia’s economy powers ahead (admittedly off a much lower base), lifting more of its 105-million people up the prosperity ladder, SA will continue to regress, exacerbating the "lost decade" and rendering even more of us poorer. The truth is we have not only lost the past decade to the corruption of the Zuma-led ANC regime, but SA has never dazzled economically. We are sinking ever faster into the abyss.
Unlike the comrades who lord it over SA, the leaders of Ethiopia’s renewal are qualified and know the real world
The difference between us and Ethiopia and Rwanda is the quality of leadership. After senseless and tragic civil wars and conflict with some of its neighbours, together with disastrous experimentation with Marxism and state control of the economy, Ethiopia has for the past two years been led by a youthful prime minister. Abiy Ahmed has kept his gaze firmly on his country’s future, while our corrupt and incompetent bunch try to reinvent failed policies from the Soviet era.
Opening up to the private sector
Ethiopia is unapologetically opening its economy to private sector investment, including selling stakes in the national telephone company and licensing two new mobile phone operators. "The private sector is not playing its natural role," finance minister Eyob Tekalign, a former private equity investor, told Bloomberg. "Our growth had shortcomings in terms of quality, job creation, inclusivity and benefiting the poor." This comes from a person who understands the role of government and private industry in an economy. Ethiopia is on course to reach lower-middle-income status by 2025. "The share of the population living below the national poverty line decreased from 30% in 2011 to 24% in 2016," says the World Bank. In the 1980s Ethiopia was a poster child of poverty, laid waste by war and drought.
Unlike the comrades who lord it over the SA state, Ethiopia has appropriately qualified people leading its renewal, with ministers, mostly foreign-trained, holding doctorates in their areas of expertise and work experience in the real world.
In SA we send the corrupt to represent us in parliament. Most cabinet ministers and MPs have never worked a day outside politics, to which they bring only loud mouths and no workable plans. They are incapable of meeting the demands of a modern industrial economy. You need only look at our state-owned companies and other agencies — all bankrupt and unable to fulfil their purpose.
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