An exercise in futility

As a critical factor in fulfilling the hopes and aspirations of a nation, it is of paramount importance that the overarching plan where by the government sets out to accomplish this goal must be properly formulated and put into practice. Like any other of its kind  such a plan needs to be justifiable and practicable if national resources are to be successfully utilized and put to their intended use. Formulating unrealistic plans is an exercise in futility. This is precisely what is currently transpiring in Ethiopia. Though plans cannot be executed one hundred percent all the time, it is unhealthy when their implementers consistently under-achieve. As a result, the government’s credibility is on the decline.

The nine-month performance of the 2015-16 budget year that the Ministry of Trade submitted to Parliament last week proves the point we are trying to make. The report states that export earnings during the reporting period, which happens to fall on the first year of the second Growth and Transformation Plan (GTP II), is woefully below projection. Receipts from the agriculture, industry and mining sector stood at USD 2.05 billion against the USD 2.91 billion. Meanwhile the revenue from the export of commodities barely edged over USD 2 billion during the period, just about hitting the 50 percent mark for the entire year. One would almost cringe in shame when making a comparison between the performance and the plan.

The very essence of a plan—that it must be grounded in the reality—is being ignored. Beginning with GTP I it has become a norm for practically all government agencies to adopt a “stretched” goals which are neither reasonable nor attainable. Although setting ambitious targets may be motivating, it is destined to be counterproductive if the goals appear to be so exaggerated that they seem to be not feasible. The ensuing underperformance is blamed on a host of excuses. Unless there was a flaw in planning, it is unacceptable to ascribe the underwhelming export performance to the vagaries of the international market. After all, it is conventional wisdom that if one were to be competitive in terms of quality, pricing and speedy delivery, exporting is a money-making venture.

Let’s take a look at the textile and leather sectors for illustrative purposes. The annual export earnings from these sub-sectors was set at USD 1 billion for textiles and USD 500 million for leather and leather products byGTP I. The actual revenue, sadly, was mediocre to say the least. What’s more, the pertinent government agencies were confidently predicting that the target would be met just months before the plan was due to come to an end. The export targets under GTP II are more or less similar to its predecessor’s goals and the nine-month performance of the first year of the plan is likewise way off mark. For instance, the manufacturing sector brought in USD 258.58million in export receipts in nine months, just about 51 percent of the USD 508.06 projected for the period.

Despite announcing that they have reviewed their respective plans in order to align them with the reality on the ground following the adoption of GTP II, government agencies have to ensure that they are not overextended. The policies, strategies, laws and plans the government adopts may have unintended consequences that rob it of credibility if they are not crafted judiciously. Individuals or companies which make investment decisions based on the government’s plans may well lose trust in it if they lose out due to the fact that its plans are unsound. Aside from investors, public confidence in it has been eroded as well on account of its consistent failure to make good on its plans.

The reluctance of Ethiopia’s policymakers to learn from past experiences is best exemplified by the perennial underperformance of the export sector. The propensity to proffer excuses instead of identifying the reason behind why plans on which considerable human and financial resources were spent went awry is costing the country dear. Even if the plunge in export revenue may be attributed to a fall in global demand and prices, inability to enhance quality and productivity, and similar other factors, it is up to the government to seek immediate solutions. Otherwise, the nation will find itself in a bind.

To recap, the plans formulated by government agencies are beset with flaws. If plans are not duly articulated and executed, it’s the nation that will pay the ultimate price? How can anation grow, how can its citizens’ livelihoods improve if there is a constant disconnect between plans and performance? The public is bound to shoulder an even greater burden unless the relentless widening of the country’s trade imbalance is brought to heel. Growth will remain a pipedream if plans are not anchored in objective reality. That is why it is incumbent upon policymakers to benchmark proven best practices before they embark on a planning exercise which is doomed to fail from the outset. This calls for a shift in focus away from agricultural commodities, which are prone to wild price swings, to strengthening the manufacturing sector through a mix of policy and legal interventions if Ethiopia is to become globally competitive. It is therefore obligatory toput in place ambitious and yet realistic plans with a view to motivate increased performance. The government would do well to understand that deliberately adopting overstretched plans is tantamount to planning to fail and erodes its credibility.