President Dr. Mulatu Teshome addressed a joint session of the two chambers of Parliament, the House of Peoples' Representative (HPR) and the House of Federation (HoF), to open the new parliamentary session on Monday. Here under-follows the first part his official speech.
On behalf of the Ethiopian people and of myself I would express my belief, and my hope, that this fifth term of Parliament will remain committed to sustain the successful achievements of past sessions, and focus on the key issues of our efforts to improve our strengths and address our weaknesses. This will allow us to register the additional achievements to realize Ethiopia’s transformation and its Renaissance.
This occasion marks the opening of the fifth session of the House of Peoples’ Representative and the House of Federation. It is a historic moment as it is being held as we successfully complete the implementation of the first Growth and Transformation Plan (GTP I), and we launch the GTP II. It is a decisive point in our efforts to reach the lower level of middle-income countries by 2025.
Ethiopia‘s sustained, accelerated and inclusive double digit growth, registered in recent years, emanated from the genuine democratic system which we launched some two decades ago. The filth national elections which were conducted earlier this year, in May, were free, fair and democratic. The government created a conducive environment that encouraged participation in a calm and peaceful manner, and the elections allowed the people to make an informed and free decision on the shape of their government. It demonstrated that Ethiopia‘s efforts to build up democracy is developing from its own experiences in previous elections and has been accomplished, to the highest standards, by the participation of all stake holders acting freely fair and democratic elections. This meant the government was able to win the trust of the people and gain victory. The result, in fact, was a decisive element in deepening democracy and ensuring the sovereignty of the people through increasing popular participation year by year.
Equally, much remain to be done. Many issues were raised by the people during the election campaign. The government has paid due attention to these and incorporated them as inputs into GTP II. They will be developed in the coming year with people’s participation of the year to maintain the sustainability, growth and inclusiveness of the economy.
The economy registered double digit growth last Ethiopian ﬁscal year and the Second Growth and Transformation Plan is now prepared to widen the base of the economy and accelerate its structural transformation. The beneﬁts to the people from rapid economic growth and democratization will be among the main activities that the House of Peoples’ Representatives will discuss and approve in the ﬁrst year of this Government.
The Second Growth and Transformation Plan over the next ﬁve years will play a decisive role in speeding up the transformation of Ethiopia’s economy and realize the first half of our vision of the Renaissance leading to becoming a middle income country by 2025.
The structural transformation, to give industry a significant role in the economy, and promote holistic developments at all levels, will bring changes to the political economy of the country, combating rent-seeking activities and making signiﬁcant changes in rural areas.
The Government's executive bodies and development agencies will be reorganized and revised to carry out this mission. These changes will based on our experience, the directions of the GTP and from studies on the experience of developmental states.
These high level efforts, already starting to beneﬁt youth and women, will be maintained and continued on sustainable bases. We will provide an organizational structure to enable the government to exploit the country's potential human and material resources and realize our Renaissance journey. This organization of the executive organs will be one of the issues that the House of Peoples' Representatives will primarily address and approve in the ﬁrst year of this Fifth term.
In this fiscal year, the main direction of the macro-economy will be maintained and will continue to deliver the sustainable, rapid, double digit economic growth, which was registered during GTP I. In order to achieve this, a concerted effort will be made to maintain the annual growth rate at around 11 per cent. Endeavours will also be made to put in place a stable and healthy macro-economy. The inﬂation rate will be kept to single ﬁgures. Efforts will be made to ensure stable currency exchange rates and provide for import-export competitiveness. From the ﬁscal policy perspective, the Government will ensure that my budget deﬁcit will be not amount to more than 3 per cent of GDP.
To achieve the set goal of ll per cent economic growth, the contribution of the various sectors will be as follows: Agriculture 8 per cent; Manufacturing 24 per cent; and Services 10 per cent.
The imbalance between import and exports has been a concern for a long time. This year the Government will be giving due attention to reduce gap step by step. Involving both the Federal and the Regional Governments, efforts will be made to improve the quality and quantity of exportable products. Consideration will also be given to enhance the country's air transport services as well as the culture and tourism sectors, focusing on the quality of services to encourage the generation of foreign currency.
Integrated support and effort will be made to improve and expand agro-processing and value addition, in textile and garments, leather and shoes and in sugar production. Aother new direction will be the emphasis on exploration of gold and other mineral production to promote earnings from mineral exports. Overall, we expect agriculture, industry and other sectors to expand their output of exportable products and develop their competitiveness.
As you know, my government's effort has been making efforts to develop ﬁscal policy within the framework of the democratic developmental state, to enable it to generate ﬁnance from domestic resources and allocate it to areas that can bring rapid, sustainable and fair growth. This has involved developing a modem tax administration, and this will continue in line with strengthening the existing programme of reform. Due attention will be given to work to expand the tax base, with particular regard to ensuring the administration’s capacity building to meet the set goals.
From the perspective of the ﬁnance industry in Ethiopia, accessibility, modernity and competitiveness, can be described as being in its infancy. Necessary measures will be taken to address these weaknesses. The government will strengthen the efforts to encourage banks to increase their number of branches and encourage savings to provide credit for those who are engaged in developmental activities. Efforts will also be made that to ensure that small-scale ﬁnancial designed to focus on and work in kebeles, will develop and expand activities. Banks, by establishing additional branches, will offer ﬁnance to small and medium companies, in addition to larger companies, and especially to those working to develop exportable products. They will engage in mobilization of funding and encourage the sale of long term saving bonds.
To maintain the achievements in encouraging foreign direct investment and in domestic savings, efforts will be made to redouble efforts to save more. To develop a saving whine, individuals and trading companies will be supported encouraged by popular activity and public relations’ activity. In addition, interest rates will be made more attractive. Existing saving mechanisms, including housing schemes, private workers‘ social security, health insurance saving in both rural and urban areas, and other saving programmes will be strengthened. ’lhe major effort to ﬁnd most of the finance required for development will come from domestic savings. The necessary additional amounts to fill gaps will come from foreign aid and grants but they will be used in a manner that will not prevent the country falling into debt deﬁcit and dependency.
The Second Growth and Transformation Plan which is going to be implemented during the ﬁve year term of the 5th term of the House of Peoples’ Representatives is a decisive chapter in our development, designed to realize the ﬁrst half of our vision to join the middle income countries by 2025, In this time period, my government will combat and get rid of corruption and maladministration, removing bottlenecks and other constraints. In ﬁghting against and weakening rent-seeking we will launch a holistic movement at all levels to bring about a real change in governance, create an effective developmental attitude and environment across the whole political economy of the country. Since the planned achievement is the base for the capacity of the whole developmental process, human resource development, and capacity building, will be at the core of GTP II.
To get rid of rent-- seeking at its source, in addition to strengthening already started activities, working with the people to identify and take appropriate measures against those engaged in corruption, unethical practices and maladministration, will be central to strengthening and deepening already existing activities.
Ensuring sustained and accelerated development means increasing the productivity and production of agriculture, the engine of the country’s growth. We will give special attention to encouraging production and the productivity of both farmers and pastoralists who are engaged in the implementation of strategic crop production and who also directly linked with the wider efforts in engaging women and youth involvement in development. This will allow them to beneﬁt from rapid development as well as increasing valuable exportable products. We will issue clear directions to pay special attention to smallholders and family agriculture, as well as to investment in medium and large scale mechanization. Investors and educated youth will be welcomed and supported.
In order to make agriculture less reliant on rain-fed agriculture, we will continue to strengthen irrigation development works, and encourage all farmers and pastoralists to carry these out. My Government is aware of the problem posed by El Nina and by drought. Last time, this affected the country, the Government managed to resolve the situation without major human and animal casualties. We will, however, continue to strengthen our capacity to conserve water and support families and children who face temporary food shortages.
From past experience, we know the impact and have developed satisfactory responses in areas where no water conservation has been done. We will also continue to strengthen already started works and practices. On every farmer's farm there should be at least one type of water harvesting and water conservation work that will enable them to manage the damage caused by lack of, or erratic, rains. Animal husbandry and ﬁshery resources development are areas that both farmers and pastoralists should be engaged in. However, extension services in both these areas are in their infancy and remain undeveloped. A major effort will be made to address and transform the lack of extension services and the problems of an inconsistent marketing system. The agricultural sector is labour intensive, and it is the source of rural employment opportunities. The government will encourage and promote this as well as ensure the benefits and achievements of women and youth, play significant role in the development of the sector.