Ethiopia, already among the poorest countries, has suffered a series of
recent economic setbacks, forcing officials to take drastic
countermeasures to avoid a financial meltdown. Economic growth
projections have been slashed amid shortages of critical items,
including foreign exchange, electricity and food.
The roar of
generators echoes through the streets of Addis Ababa's fashionable Bole
district. It is another "power out" day, an energy saving scheme that
leaves people without electricity for as much as 14 hours, three days a
But places like Bole that can afford generators comprise less than half of one percent of Ethiopians.
shopkeepers without generators, like laundry operator Tewodros Haile,
no electricity means little or no profit. He says if this keeps up,
he'll soon be forced to close.
"Business has decreased by at
least 50 percent almost," he said. "Whenever we don't have the power we
have to put our staff, we have to pay overtime. Our expense is
increasing because of the overtime. We cannot continue like this."
power outages have aggravated Ethiopia's critical foreign exchange
crunch. Exports of coffee, which last year accounted for nearly
two-thirds of the country's $1.5 billion export earnings, are down as
much as 40 percent this year.
With hard currency reserves
sagging to just enough to cover a few weeks imports earlier this year,
the government had exempted major exporting industries from the power
cuts. But conditions deteriorated when the hoped-for rains failed,
leaving the country's hydroelectric power plants without water. So the
state-owned Ethiopian Electric Power Corporation last month notified
exporters they too would face cuts.
The grim outlook is
forcing economic planners to dramatically scale back growth
projections. Initially, they predicted an increase of as much as 20
percent in export revenues. But in a report to parliament last month,
the Trade and Industry Ministry conceded revenues might miss the $2.5
billion target by more than $1 billion.
Tewodros Mekonnen of the Ethiopian Economic Policy Research Institute says that could mean zero export growth this year.
we are a developing country, our exports grow a bit rapidly, so we have
exports growing at 18 to 20 percent each year. this year comparing nine
months exports ... comparing it to last year, the growth is almost
zero percent, which is considered serious for us," said Mekonnen.
Minister Meles Zenawi earlier predicted Ethiopia's economy would grow
more than 11 percent this year despite the global economic slowdown.
The International Monetary Fund's projection was a more modest six
percent, at most.
Economist Tewodros Mekonnen says the IMF figures look more realistic.
economy has been growing 11 percent, and the government is maintaining
that 11 percent will continue. but there are some people who say
because of the crisis, 11 percent growth is considered a miracle," said
For average Ethiopians, the falling growth figures
and power outages are just more in a long succession of hardships that
have kept their country at the bottom of the world's development index.
For the educated young along Addis Ababa's Bole Road, like shop clerk
Hayat Mohamed, it means scaling back dreams of taking part in the
global IT (information technology) revolution.
"At first it was
all about we want a faster Internet connection and I wish I could have
this and that. But now it has come down to, I wish I could have
electricity. We're just hoping for some improvement," he said.
a country where a fewer than 20 percent of the people have electricity,
the economic concerns of most Ethiopians are about simpler things, such
The June 1 U.N. Humanitarian Bulletin for Ethiopia
suggests food shortages and malnutrition rates may be as bad as last
year, when officials clamped a lid on publicity about starving children
after some news reports compared conditions to the famine of the
The U.N World Food Program estimates the national
relief program will fall nearly 178,000 metric tons short of assessed
needs for the second quarter of the year.