College of social science and law

Department of governance and development

studies

Course:-public policy making and

analysis (Gads 524)

Article Title: - public policy making in Ethiopia

Name ABEBE BERHANU EDDU

Id 0986/06

Year- one

Semester -two

Instructor:-Ato Ermyas A. May 2014

Public policy making in Ethiopia

Introduction

What kinds of policy had implemented in Ethiopia? What are the

reform areas in the current government? How? What are some causes

of policy failure in Ethiopia?

Ethiopia, officially known as the Federal Democratic Republic of

Ethiopia, is a country located in the Horn of Africa. It is

bordered by Eritrea to the north and northeast, Djibouti and

Somalia to the east, Sudan and South Sudan to the west, and Kenya

to the south. Ethiopia is the most populous landlocked country in

the world, as well as the second-most populated nation on the

African continent. It occupies a total area of 1,100,000 square

k.m (420,000 sq mi), and its capital and largest city is Addis

Ababa Between 1755 to 1855, Ethiopia experienced a period of

isolation referred to as the Zemene Mesafint or "Age of Princes".

The Emperors became figureheads, controlled by warlords like.

The laissez faire economic system of Ethiopia was started

during the time of land lord “Zemene Mesafint” period which is

characterized by frequently local war between different land

lords of the regime.

Ethiopian isolationism ended following a British mission that

concluded an alliance between the two nations; but, it was not

until 1855 that Ethiopia was completely united and the power in

the Emperor restored, beginning with the reign of Emperor

Tewodros II who began modernizing Ethiopia and recentralizing

power

During his reign, Menelik II made advances in road construction,

electricity and education; the development of a central taxation

system; and the foundation and building of the city of Addis

Ababa – which became Ras, capital of Shoa province in 1881. After

he ascended to the throne in 1889, it was renamed as Addis Ababa,

the new capital of Abyssinia.

The early 20th century was marked by the reign of Emperor Haile

Selassie I. He undertook the modernization of Ethiopia from 1916,

when he was made a Ras and Regent (Inderase) for Zewditu I and

became the de facto ruler of the Ethiopian Empire. Following

Zewditu's death, he was made Emperor on 2 November 1930.

Haile Selassie's reign came to an end on September 12, 1974, when

a Soviet-backed Marxist-Leninist military junta, the "Derg" led

by Mengistu Haile Mariam, deposed him. The new Provisional

Military Administrative Council established a one-party communist

state which was called People's Democratic Republic of Ethiopia.

The regime of derg is characterized by Red Terror, suffering of

several coups, uprisings, wide-scale drought, and a huge refugee

problem, the Ogaden War which resulted in Somalia capturing part

of the Ogaden region, Ethiopia recovered it after receiving

massive military aid from the USSR, Cuba, South Yemen, East

Germany and North Korea. This included around 15,000 Cuban combat

troops. But, the" command economy" or centralist/socialist

economic system of government lead country’s economy declined.

The collapse of communism in general, and in Eastern Europe

during the Revolutions of 1989, coincided with the Soviet Union

stopping aid to Ethiopia altogether in 1990. The strategic

outlook for Mengistu quickly deteriorated. In May 1991, EPRDF

forces advanced on Addis Ababa and the Soviet Union did not

intervene to save the government side. This was the time when

Ethiopia witnessed a wide range of policy reforms in the social,

economic and political spheres. It was the socialist oriented

command economy that followed by market-based liberal type of

economic system. It comes with two ideologies these are:

revolutionary democracy(at the earlier) and

Developmental state (currently).

Because of the prolonged war that causes huge distraction and

economic cries and political instability, Ethiopia had to set a

new direction for the economic reconstruction and social

rehabilitation of the war-torn and poverty-ridden country. And of

course it was during this time that the first wave of new

policies and strategies defining the development priorities which

must come with poverty reduction, goals and implementation

instruments of the new regime led by the EPRDF was introduced.

Among the major policies ADLI (agricultural development lead

industries), educational reforms, health policies, and training,

population, women and energy and strategies such as, the

education sector strategy, and the conservation strategy.

About 11.7 million Smallholder households account for

approximately 95 per cent of agricultural GDP and 85 per cent of

employment. About 25 per cent of rural households earn some

income from non-farm enterprises, but less than three per cent

rely exclusively on income from such enterprises. With a total

area of about 1.13 million km and about 51.3 million hectares of

arable land, Ethiopia has tremendous potential for agricultural

development. Only about 11.7 million hectares of land,

however, are currently being cultivated; just over 20 per

cent of the total arable area. Nearly 55 per cent of

all smallholder farmers operate on one hectare or less.

The agricultural sector accounts for roughly 43 per cent of GDP,

and 90 per cent of exports. Cereals dominate Ethiopian

agriculture, accounting for about 70 per cent of agricultural

GDP. Livestock production accounts for about 32 per cent of

agricultural GDP and draught animal power is critical for all

farming systems. Over the past decade, cereal production has

more than doubled to nearly 15 million tones, as a

result of horizontal expansion and increased yields.

Nevertheless, food security remains a critical issue for

many households, and for the country as a whole.

Moreover, expansion of the cropped area to more marginal lands

has led to severe land degradation in some areas (EPRDF, MAD,

2010).

Policy-making and practices in Ethiopia

(Article 89)

Government shall have the duty to formulate policies which ensure

that all Ethiopians can benefit from the country’s legacy of

intellectual and material resources.

According to the constitution of Ethiopia(EPRDF ,1994),The prime

minister and the council of ministries as the highest executive

power the council of ministries headed by the PM is the highest

policymaking body.

Article 74

The Prime Minister is the Chief Executive, the Chairman of

the Council of Ministers, and the Commander-in-Chief of the

national armed forces.

He shall follow up and ensure the implementation of laws,

policies, directives and other decisions adopted by the

House of Peoples’ Representatives.

The current government of Ethiopia (EPRDF) is strongly committed

to egalitarian policies. This shows that in its focus on rural

development, control of land ownership, and its commitment to

pro-poor spending. More than 50% of the government’s total budget

is spent on sectors such as education, health, agriculture,

water, and roads which are mainly focuses on pro-poor polices.

Successful growth depends on efficient policy and effective

policy implementation. Several factors constrain policy making

process in Ethiopia.

Relevant research findings that can support and influence

policy-making are important for future policy making in

given country. Research finding lack in Ethiopia.

On the other hand, lack of awareness of policy-makers about

the presence of research findings, or poor culture of

seeking such information is obstacles for effective policy

making. Especially when we use polices which are transferred

from other country; care should be taken to make it

computable with the borrowing country.

Lack of interest and willingness to use some findings,

especially which are not in line with the ideology and

strategy of the ruling party.

Some writers indicate that the current government tends to

follow the principles of instrumentalism in policy making,

which is based on the paradigm that policy is built step by

step, and wise decisions, as well as mistakes of the past are

the foundations for current and future policies. The efforts

made in recent years to conduct public consultation in the

policy making process is an encouraging start. Especially, the

government's effort to promote debate and discussion at

different levels on the rural development policy and strategy

is a step towards the right direction. The consultation

process made during the course of Poverty Reduction Strategy

Plan was also another notable attempt. There should be

selectivity in using information depending on who generated

it. In all angles lack of communication plays a major role in

hindering uptake and utilization of research findings in

policy-making and practices. Stakeholders felt that lack of

awareness and adequate knowledge, suspicion, conservatism and

risk avoidance or minimization strategy have been the main

features of the rural community. These played significant role

in impeding communication, uptake and utilization of research

findings. In this regard, the legacy of the communism and

military regime played its own part. It created suspicion and

resistance among the community towards external initiatives,

new information/technologies and joint-ventures.

The Agricultural Development led Industrialization (ADLI) and

Democratic Developmental ism (DD).

What is it?

Agricultural Development Led Industrialization (ADLI) is the

policy principle adopted by the government to promote its

national development. The initial idea of ADLI was formulated

with the establishment of the Interim Government in the early

1990s, which was subsequently elaborated in stages and put into

serious implementation in the early 2000s. Democratic

Developmentalism (DD) is defined to be “a political regime in

which a developmental party remains in power for a long time by

consecutively winning free elections which permit multiple

parties, under which policies that punish rent seeking and

encourage productive investment are implemented with a strong

state guidance Democratic Developmentalism (DD) is a political

regime which supports the execution of this development

strategy.DD and ADLI constitute a complementary set which

stipulates the political and the economic aspect of development

respectively By adopting DD and ADLI, Ethiopia intends to

radically transform the state management paradigm, politically

and economically, from the system in which rent-seeking is the

dominant behavioral pattern to the system in which value creation

is dominant.

ADLI and DD have four common characteristic:-

ADLI is not merely an academic concept but a crucial

principle upheld by strong leadership and shared by every

official of the Government. DD and ADLI go beyond

theoretical hypotheses or thought experiments to become very

pragmatic and action-oriented guidelines to inform the

legitimacy and the policy formulation and implementation of

the present Ethiopian Government.

The plan was of removing the existing development paradigms

and building a new one. It is only natural that it wants to

discard the paradigm of predatory state, but it also refuses

to accept any partial modification or re-trial of the neo-

liberal paradigm for the stated reason that its fault is

deep and fundamental.

It was the development strategies of different African

countries. But first it should be implemented effectively in

Ethiopia before it is transferred to African countries.

They both seem:

Have no any fatal flaw in logics.

They both lack formal consistency from feasibility and

operational modality in the process of implementation.

Their Quality of strategies and tactics also matter.

inability to confirm the viability the new development

paradigm

Difficulties in preparing the preconditions for and

removing the obstacles of their effective

implementation turn by turn.

The Agricultural Development-Led Industrialization (ADLI)

strategy is pursued as a major policy framework for economic

development. It is a two-pronged strategy

Incorporating the external sector (export-led part)

On the other the internal sector which shows the forward

and the backward linkages between agriculture and industry.

Economic policy

Agriculture has been considered the pillar of Ethiopia's

economy more than 80% of the population basic sources of

income is from agriculture. It is also the spinal cord of the

country. It will supply commodities for export, provides

domestic food supply and industrial inputs, as well as expands

markets for domestic manufactures. The fact that the country

has emerged out of a communism system to a free market economy

appeared to favor investment, economic progress, international

relations and development supports. Many agree that there has

been significant improvement in the policy environments though

factors such as lack of technical and financial capacity, poor

infrastructure and weak institutional capability have hindered

effective implementation on the ground. In addition, the

federal system and decentralization somehow improved self-

governance and community participation.

One of the plan (five year plan 2005-2010) which is called

Sustained Development to End Poverty (PASDEP) is Ethiopia’s

guiding strategic framework. it is referred as poverty

reduction programme (PRSP), it is expected growth rate of

about 8% per annum would have to be sustained to reach the MDG

of halving income poverty by 2015. But an average rate of only

5% over the 10 years (1993-2003) was attained.

PASDEP consists of eight pillars.

These are:

Building implementation capacity

a massive push to accelerate growth

addressing the population challenge

unleashing the potentials of women

strengthening the infrastructure

strengthening human resource development

managing risk and volatility and

creating employment opportunities

The present Policy of Ethiopia on National Economic Development

Since Ethiopia overcomes the era of land lord in which land is

owned by few people and the derg regimes in which all modern

economic establishments, including land (the most fundamental

means of production), banks and insurance companies, medium and

large scale manufacturing, transport, trade enterprises,

commercial farms, urban rented houses, etc., were nationalized

and every activities are controlled by mengistu hailemariayam by

centralized system of unitary system, it needs great reforms on

every part of its policy starting from the top to the bottom.

With markets regulated and the modern private sector

marginalized, market competition as a mechanism for economic

development and a motivation for successful business was reduced

considerably.

Environmental issuers (Article 92)

Critical issues over the glob

Clean and Healthy environment ,Programs & Projects not to

destroy environment People and NGOs participation in the

planning and implementation of environment policies and

Duty to protect environment

The EPRDF encourages decentralization and adopted market-oriented

economic reforms. Recognized the role of private enterprises as

the engine of growth. The government privatized many state-owned

firms, encouraged competition, and reduced government

intervention in trade and factor markets. The country is also

currently working on the process to join the WTO. Aid and WTO

membership are conditional. In 2006 Ethiopia was a U.S. ally in

the fight against terrorism in the Horn of Africa. The investment

climate has significantly improved, as a comparison of the first

(2001/02).

The Ethiopian government believes in protecting its domestic

companies from competition through protectionist measures.

However their policies have not been successful, and this

moderately discourages opening up a business. Ethiopia’s average

tariff was 17.3 percent in 2010 and 10 percent for COMESA member

countries. High tariffs were applied to certain imports to

protect local industries like the textile and leather industries.

Ethiopia has a Current Account deficit of 613.90 million USD

(third-quarter of 2012) and a trade deficit of 2366.20 million

USD as of the fourth quarter of 2012. Ethiopia’s constant trade

deficits are due to its small amount of exportable goods. The

main exports are gold, coffee, live animals, and oilseeds.

Ethiopia’s main imports are from China (18% of total imports, 8%

of exports). The Chinese government and the Ethiopian government

have been partnering for certain projects, mainly building

infrastructure. This makes me cautious, about whether the

Ethiopian government will continue to put high tariffs on

imported products, especially from China. Ethiopia is also

working on becoming a member of the World Trade Organization;

that will most likely put an end to Ethiopia’s non-free trade

protectionist measures and heavy government involvement in

exports and imports.( Serkalem T,2013).

According to the constitution of the 1995, Ethiopia has two

states the regional sate and the federal state .each state has

their own power, and there is also common power which resides in

both the local and national government. Article 51 of the

constitutions of Ethiopia lists power of the federal government.

Some of these are:

1. It shall protect and defend the Constitution

2. It shall formulate and implement the country’s policies,

strategies and plans in respect of overall economic, social and

development matters.

3. It shall establish and implement national standards and basic

policy criteria for public health, education, science and

technology as well as for the protection and preservation of

cultural and historical legacies.

4. It shall formulate and execute the country’s financial,

monetary and foreign investment policies and strategies.

5. It shall enact laws for the utilization and conservation of

land and other natural resources, historical sites and objects.

6. It shall establish and administer national defense and public

security forces as well as a federal police force.

7. It shall administer the National Bank, print and borrow

money, mint coins, regulate foreign exchange and money in

circulation; it shall determine by law the conditions and terms

under which States can borrow money from internal sources.

8. It shall formulate and implement foreign policy; it shall

negotiate and ratify international agreements.

9. It shall be responsible for the development, administration

and regulation of air, rail, waterways and sea transport and

major roads linking two or more States, as well as for postal and

telecommunication services.(The constitution of ethioppia,1994).

All powers not given expressly to the Federal Government alone,

or concurrently to the Federal Government and the States are

reserved to the States. Consistent with sub-Article 1 of this

Article, States shall have the following powers and functions:

To establish a State administration that best advances self-

government, a democratic order based on the rule of law; to

protect and defend the Federal Constitution;

To enact and execute the state constitution and other laws;

To formulate and execute economic, social and development

policies, strategies and plans of the State; To administer

land and other natural resources in accordance with Federal

laws;

To levy and collect taxes and duties on revenue sources

reserved to the States and to draw up and administer the

State budget;

To enact and enforce laws on the State civil service and

their condition of work; in the implementation of this

responsibility it shall ensure that educational; training

and experience requirements for any job, title or position

approximate national standards;

To establish and administer a state police force, and to

maintain public order and peace within the State(the

Constitution of ethiopia,1994)

The economic aspects of these policies stress the liberalization

of the economy to become market-oriented. The previous

centralized economic planning and decision-making, which gave

total authority on the economy to the state, has been abolished.

Forced collectivization of rural peasant in Ethiopia and price

controls over agricultural produce are no more in existence.

Although land remains still under government control, the

importance of creating a sense of tenure security in the land

users is recognized. Government has taken steps to stabilize the

local currency through devaluation measures and the deregulation

of the foreign exchange market. The effort of the government to

reduce government spending and to control the supply of money has

paid off by bringing down inflation under 5 percent. While

efforts to broaden the tax base have been made, reforms to reduce

tax rates have also not been neglected. Export taxes have become

totally eliminated except on coffee. Price controls and

restrictions on trade and the labor market have practically

disappeared.

Basic policy reform areas

All most all areas of policy in Ethiopia have reformed. Starting

from the most important areas such as economic reform, Economic

Development Strategy, social, cultural, Industrialization

Strategy, Trade Policy, education, health. Banking, investment

policy, privatization, are all area where policy reform takes

place.

Economic policy

According to the IMF, Ethiopia was one of the fastest growing

economies in the world, registering over 10% economic growth from

2004 through 2000. It was the fastest-growing non-oil-dependent

African economy in the years 2007 and 2008. Growth has

decelerated moderately in 2012 to 7% and is projected to be 6.5%.

The economic policy focus has been primarily on agricultural

development. The specific strategy was to increase productivity

through supply of technical inputs such as fertilizer, improved

seeds, pesticides and insecticides.

Article 90 of the FDRE states:

To the extent the country’s resources permit, policies

shall aim to provide all

Ethiopians access to public health and education, clean

water, housing, food and social security.

Education shall be provided in a manner that is free from

any religious influence, political partisanship or cultural

prejudices.

On the hand Industrialization strategies are also reformed.

The central role of industry is to help develop agriculture

by processing raw materials, hence, the strategy:

Agricultural Development Led Industrialization (ADLI).the

industrialization strategy prioritizes natural resource based

industries such as textile, leather, meat packing, etc.

Ethiopia’s industrial strategy is much in line with the

international economic order, or the theory of comparative

advantage.

Article 91 Cultural Objectives

Government shall have the duty to support, on the basis of

equality, the growth and enrichment of cultures and

traditions that are compatible with fundamental rights,

human dignity, democratic norms and ideals, and the

provisions of the Constitution.

Government and all Ethiopian citizens shall have the duty

to protect the country’s natural endowment, historical

sites and objects.

Education policy reform

The other areas reform made was the education Policy Education in

Ethiopia had been dominated by the Orthodox Church for many

centuries until secular education was adopted in the early 1900s.

The Government of Ethiopia has a strong commitment to achieving

education for all by 2015 and has a policy of inclusive education

for all children. It has made significant progress in expanding

access and increasing enrolment to general education. Having

achieved enrolment of over 80%.it now wishes to concentrate on

sharpening its policies and programmes to extend equity and

quality (Elizabeth M, Bizuayehu F. 2011)

The current system follows very similar school expansion schemes

to the rural areas as the previous 1980s system with an addition

of deeper regionalization giving rural education in their own

languages starting at the elementary level and with more budgets

allocated to the education sector. The sequence of general

education in Ethiopia is six years of primary school, four years

of lower secondary school and two years of higher secondary

school. In 2004 school enrollment was more than that of many

other African countries. Recognizing the fundamental role of

education in social development and poverty reduction, the first

multi-year Education Sector Development Plan (ESDP I) in 1997

initiated a range of programmes related to the provision of

educational services (generally dubbed ‘supply side’ programmes)

that have continued to be supported. These include:

increasing the number of, and upgrading, school buildings

expanding teacher training programmes

allowing children to progress between grades one and three

without being held back on account of inadequate performance

using local languages in the classroom

developing context-appropriate primary school syllabi and

textbooks

eliminating school fees

developing quality assessment mechanisms.(Tassew W, Alemu

M ,2006)

Trade and liberalization

The rolling back the state is at the centre of an IMF driven SAP

is one of the areas where reform in

Ethiopia was take place .that is privatization of different

governmental institution. A number of state-owned enterprises

(SOEs) have been privatized. Most enterprises were privatized

through an auction system, while few, such as a gold mine, were

privatized through negotiations with individual investors. A

large number of SOEs have still not been privatized.

Foreign Currency Transactions .The constant use of Ethiopian

currency by virtually all businesses in Ethiopia strongly

encourages opening up a business. Ethiopian business owners

expect everyone, including tourists to pay in Birrs. The first

thing to do as a tourist is to have your foreign currency

exchanged into Birrs. All official payments, including those made

by tourist must be paid in Birr. The visa fee at Bole

International Airport is able to be paid in USD but that is

because it would be difficult for visitors to have already had

exchanged their currency. It is very rare to see even small

businesses, or quickly put-together outdoor marketplaces barter

or accept anything outside of the Birr. The rise in Ethiopian

consumer culture has made dealing exclusively in Birr important

and very common.

Responses and Conclusion

• The laissez faire economic system of Ethiopia was started

during the time of land lord “Zemene Mesafint” period which is

characterized by frequently local war between different land

lords of the regime. Most policies in Ethiopia are not

permanent. changing year after year this leads to wastage

of resources.

• Because of the prolonged war that causes huge distraction

and economic cries and political instability, Ethiopia had

to set a new direction for the economic reconstruction and

social rehabilitation of the war-torn and poverty-ridden

country

• About 11.7 million Smallholder households account for

approximately 95 per cent of agricultural GDP and 85 per

cent of employment. This hams the economy of the country

very badly.

• Ethiopia’s extreme censorship and limits on what is safe to

say and print, greatly obstruct the free flow of ideas and

points of inspiration for potential entrepreneurs

• Ethiopia’s commercial banks do not have a large supply of

deposits, and do not have the means to lend to potential

entrepreneurs or those looking to expand their business

Ethiopia’s communication systems are inconsistent.

• Telephone service and internet access are under a monopoly

by the Ethiopian Telecommunications Corporation (ETC

Foreign Currency Transactions .The constant use of Ethiopian

currency by virtually all businesses in Ethiopia strongly

encourages opening up a business. Ethiopian business owners

expect everyone, including tourists to pay in Birrs. The first

thing to do as a tourist is to have your foreign currency

exchanged into Birrs. All official payments, including those

made by tourist must be paid in Birr

The rolling back the state is at the centre of an IMF driven

SAP is one of the areas where

reform in Ethiopia was take place .that is privatization of

different governmental institution. A number of state-owned

enterprises (SOEs) have been privatized

Developmentalism (DD) is defined to be “a political regime in

which a developmental party remains in power for a long time

by consecutively winning free elections which permit multiple

parties, under which policies that punish rent seeking and

encourage productive investment are implemented with a strong

state guidance Democratic Developmentalism (DD) is a

political regime which supports the execution of this

development strategy.

References

Elizabeth M, Bizuayehu F,(2011). Social Assessment for the Education Sector,Ethiopia: Department for International Development: Mary Jennings,

Tassew W, Alemu M. (2006), Educational choices in Ethiopia: Whatdetermines whether poor children go to school?: Young LivesPolicy Brief.

The Constitution of the Federal Democratic Republic of Ethiopia,1994.

EPRDF, Ministry Of Agriculture And Rural Development, (2010):Ethiopia’s Agricultural Sector Policy And Investment Framework: Draft FinalReport.

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