By The Reporter,
The International Monetary Fund (IMF) has severely criticized the five-year Growth and Transformation Plan (GTP), which was announced in October, 2010, for its ‘lack of feasible financial and implementation planning and adequate prioritization of targets in the plan.’
Following the staff visit to Ethiopia, it was to be remembered that the Fund had criticized government’s lax monetary policy management as the cause for persistent inflationary pressure in the economy. Nevertheless, the full assessment of the country’s growth road map appears to be worse than the monetary aspect.
According to Joint Staff Advisory Note (JSAN) that reviewed the growth master plan, the financial resource mobilization plan and the capacity of implementing body are both far below the requirement of the GTP.
“A tall financial requirement of the plan, which has not being secured, appears to be ill-planed,” the note said. And there is no contingency plan, if the original sources fail, it argued. However, the team also noted that the spending plan is far more than the economy can carry. Hence, the government ought to calm down aggressive investment to avoid further overheating of the economy, it advised.
On the other hand, the role of the private sector in the GTP appears to be another point that annoyed IMF’s experts. The focus given to the public sector investment is crowding out the private sector, the note details, pointing to the government’s regulation in the financial industry in recent times. “The 27 percent NBE-bill directive stifled access to credit facility of the private sector,” IMF advices, hence asking for reform.
Nevertheless, wide varieties of issues are also touched by the advisory team.