Regional Economic Growth for a Prosperous Ethiopia!

A few days ago, the Prime Minister held a welcoming dinner party for the Diaspora community that recently arrived in the country in response to the call to come here to celebrate Christmas and epiphany.

On the occasion, the Prime Minister gave a statement on how to strengthen the ties between the Diaspora community and their country, Ethiopia. He talked about various ways in which the Diaspora community could work together with the government in order to develop a better Ethiopia to be chosen as a place for visit and residence in the future.

One of the topics he mentioned was the different projects that the government is working on, such as the resort projects of Gorgora, Koisha and Wenchi worth up to a billion birr each.

As to him, the projects are “Leave Addis Ababa”, which meant that they could invest on many projects outside the city. This new direction of investment really caught my attention due to the fact that I myself have been suggesting the same thing for a few major political and economic reasons.

As a resident of Addis Ababa, I have witnessed various projects implemented by the City Administration and the Federal Government aiming at beautifying the city. Especially in recent years, the Federal Government has come up with quite a few projects amounting up to tens of billions of birr, such as the Addis Ababa Rivers and the Legehar projects in which planned to invest its financial and manpower resources extensively.

The idea is appreciable because the fact that Addis is the capital city of the country as well as the seat of the African Union.

In the long run, these kinds of investments have made Addis the center of political and economic attention whilst it holds 7 to 10% of the entire population of the country. Of course, the majority of the country population still lacks access to different infrastructures and development programs enable to meet the social and economic needs.

The development plans and projects focused on the city makes it more attractive to local and foreign investors. The already availed infrastructure also facilitates the development endeavor.

As the urban center, the city accommodates various cultural, religious and political aspiration diversified community. When the city became more modernized it could be a center of gravity to pull more people from local and abroad.

To attain the higher social ladder and change their way of life many come and reside in the city and exploit the created various opportunities such as education and business.

Citizens from all over the country leave their families and homes and come looking for different employment opportunities in the city. Others, who already engaged on business in other parts of the country, also set their eyes upon the city and its residents for several dealings and transactions.

They also engage in various businesses instead of trying to invest their money in their respective regions.

For example, a coffee selling business person at Yirgacheffe sell his coffee product and save the profits he earned and look for an opportunity to either expand his business or build a residential house for himself and his family in the city. Ultimately the money he earned and the business he conducts in Yirgacheffe, transfers to Addis.

It has been a norm to think that whoever builds a house or a business in Addis by moving out of his region assumed as successful business man. Because the city is more urbanized and conducive for living.

In fact, such thinking to some extent discouraged various would be “successful” entrepreneurs to refrain from investing in their community on different projects taking place in their regions. And such a situation in the long run might leave the rural communities to remain underdeveloped and face the same vicious circle of poverty, shortage of access to basic facilities such as schools and hospitals. When the city is growing due to the flourishing of private and government investments, we still have people in rural areas of the country suffer from lack of access to basic utilities such as electricity, telecommunication and piped water.

On the other hand, the unplanned rural urban migration creates unwanted havoc.

The gap between the social service supply and demand creates stress on the municipal budget. The shortage of housing, employment opportunity, health and education services pose social unrest, prostitution, unemployment and the prevalence of high crime rate.

The high concentration and circulation of money in the city, aggravates inflation.

It is obvious that where there is too much money, give way for inflation and a rise in the cost of living.

Sometimes, even the same product in two different areas might be sold in different price. Why? Because the higher shop rent in the areas forces the trader to set new price in order to compensate what he spends for rent. Therefore, the commodity will be expensive and become and un-affordable to the ordinary people. Contrary to this, In the shanti areas the same commodity might sold by the average price in which the poor can afford.

If the market is governed arbitrarily the economy inclined to be more rent seeking.

On the other hand, if the supply is higher than the demand the product or the service will be sold for a cheaper price.

In fact the city is divided by the affluent class which have a disposable income and spend their money extravagantly and that of the poor. The excess expenditure of the haves again might pose the scarcity of commodities and services. This in turn affects the lives of the fixed income earners of the city who are employed in different governmental and non-governmental institutions. The high living cost again put the middle class to indulge in corruption and other illegal means of earning money in order to overcome the financial stress and to meet the unsatisfied need on the day to day base.

Another issue that needs to be addressed here is that we have to take advantage of the natural beauty and the historical value of different regions in the country when we think of building various infrastructures.

For instance, if we visit the southern part of Ethiopia, we can see beautiful geographical areas with fertile soil. This region could serve as a site of tourist attraction and can pull investment for economic growth if it is properly managed. In addition, it became a place where people would visit to see nature and get a fresh air outside the city. Moreover, we claim to be a nation with more than 3000 years of glorious history, but we have not provided the enabling environment for foreigners to study our culture and history properly.

We should pay attention to cities and regions that are more resourceful in this regard than Addis Ababa and work on developing and to harness their maximum potential.

All in all, the government should not regard Addis as the only center of investment. Therefore investing on other cities and towns should be taken as option so that they created wealth which can be trickled to the ordinary citizens.

In line with the public investment, the government should broaden the space to the private sector to invest in the city. Because the involvement of the private sector in urbanization facilitates the city advancement.

Decentralizing the economic venture and paying attention to other regions with diverse potentials serves to balance the disproportionate economic growth pervasive in the country. The US is can be taken an example in this regard. New York is the center of its economic transaction. Whereas,Washington D.C is its political center. In South Africa, there are multiple urbanized cities such as Johannesburg, Cape Town, Pretoria and Durban. We should adapt their system of development in line with our context and create multiple urban centers to use them as centers of political decision making and economic activities separately.

Therefore, government should strictly work on creating a balanced regional economic growth which might help alleviate poverty and the current political extremism.

Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The

BY Wossenseged Assefa


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