The recently endorsed ten year development plan has placed the manufacturing industry to take the lion share in terms of hard currency earnings in the coming period; while per capital income will be more than double by 2030.
The development plan that is expected to achieve real structural transformation by including different reforms in the macroeconomic policy and approach of development shows that the industry sector in general will be a major pillar to attain the demanded development in the coming decade.
The plan that was approved by the Council of Ministers a week ago and sent to Parliament for ratification to be applicable as of this budget year has projected the manufacturing subsector of the industry sector will be the major source of foreign currency.
Nemera Gebeyhu, Deputy Commissioner of Planning Development Commission (PDC), said that the manufacturing sector will contribute 48.4 percent in the coming ten years from export earnings from the current 13.3 percent, while agriculture will be reduced to 36.4 percent from the current 77 percent.
The mining export earnings share is also expected to grow to 11.3 percent from 6.9 percent.
At the end of the planned year, the poverty line will drop to seven percent from the current 20 percent of the total population.
The per capital income is also expected to lift to USD 2,201 for the current lower one thousand dollar. The per capital income is projected to grow on average 8 percent every year in the coming ten year.
The agriculture sector contribution to the GDP will be significantly shrunken in this period. According to the plan, the agriculture sector that has about 33.4 percent share on the GDP now will drop to 22 percent, while other sectors; industry and service will show massive shifts.
Meanwhile the massive changes are expected on the industry sector that includes manufacturing and mining sector besides the construction industry, the service sector will continue to top similar to the current situation.
The projection indicated that the service sector will take a share of 42.1 percent of the GDP from the current 39.2 percent of position.
The industry sector in general is expected to expand to 35.9 percent of the GDP from the current about 27.4 percent.
In the industry sub sector the manufacturing sector will has massive progresses and stand at 17.9 percent from the current 6.4 percent of the GDP share.
Regarding workforce similar to the GDP share the agriculture sector labour force will diminish to 42 percent from the current about 73 percent. However, the labour force share may show significant reduction in the coming ten year, it will continue as a major player on job contribution.
The manufacturing industry is expected to grow by two fold on job creation in the period and will be standing at 15 percent. The projection indicated that the service sector will have a growth of close to 20 percentages on labour share from 19.9 percent to 39 percent by 2030.
The ten year program has 10 strategic pillar; quality economic growth, inclusive prosperity, competitiveness and productivity, technology capability and digital economy, green economy and shock resilient, sustainable growth and development finance, depart the private sector to lead the economy, institutional transformation, justice and good governance, and sustainable peace development and strong regional economic cooperation.
The key focus areas are multiply economic growth sources, financial sector development, doing business initiative, demographic dividend, quality, inclusive and economic centric infrastructure development, sustainable urbanization, and peace, justice and inclusiveness.
According to the plan the agriculture sector will grow by 5.5 percent, industry by 11.4 percent and service sector by 10.4 percent in the first five years of the ten year plan. From the industry sector the manufacturing and construction sub sectors will grow by 18.4 and 8.5 percents respectively. In the stated first five year the economic growth will be stood at 9.2 percent. In the second five year that will be ended in 2030 the agriculture sector growth has projected to be 6.2 percent, industry 14.6 percent, and service 10.7 percent. The manufacturing and construction sector under industry sector in the second five year will have 22.9 percent and 9.2 percent growth respectively.
Meanwhile the agriculture GDP share may shrink in the coming period and the sector will be a priority on access to finance and using improved machines on the way to productivity that was not seen in the past.
Under the three years Home Grown Economic Reform Agenda, the government has already supported the agriculture sector on unseen past experience and allowed the agricultural tools to be imported under duty free scheme.
On average, in the next ten years, the country economy is targeted to have grown by 10 percent.
The unemployment rate in urban areas is expected to down to a single digit and stand at nine percent from close to 19 percent.
Monitoring and evaluation will make different the current economic plan than the previous trend. Nemera said that quarterly evaluation will be undertaken every year in the period that will help to identify the gap and supposed to be corrected or accelerate on the area that achieved.
According to Nemera, investments envelop is also the other uniqueness of the plan. “We will design the investments and source of finance every time,” he told Capital.
He said that the auxiliary documents regarding financing envelop has already been designed.
Fitsum Assefa, Commissioner of PDC, said that meanwhile the current ten year plan focused on the private sector lead development of the government will have projects that are based on deep evaluation.
“In the past there was massive public investment, while it was problematic regarding to inclusiveness. In the coming year we have to grow but the financing will be lead on sustainable financing and engaged on innovative financing source unlike the previous trend,” she said.
“The sustainable development finance source will be supported by the government revenue, financial inclusion that expands the mobilization of saving, and efficiency gain on projects. The loan that the government may receive will proceed in a prudent manner, while development assistance is also considered as part of source of development finance in the coming years,” Fitsum explained.
She said that despite the development plan crafted for ten year the implementation process has been classified in different periods.
“For instance the initial implementation period will have three years and the second phase will have one year duration,” the Commissioner elaborated.
Regarding foreign currency exchange on the CEO Forum that was held on Friday December 18, Fitsum hinted that the government will use floating change rate that is crafted in the ten year plan.