Transforming Ethiopia calls for commitment to laws, regulations and procedures

2 Aug
    “The accumulation of all powers legislative, executive and judiciary in the same hands, whether of one, a few or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”

    James Madison, Federalist, no. 47, 323-31

    “Election or appointment to certain public offices became the easiest way to amass wealth and become rich. The notion of servant leadership disappeared as personal aggrandizement took centre stage.”

    Kenya’s Task Force Interim Report on Devolved Government, 20 April 2011

Part II

By Keffyalew Gebremedhin

• It is one thing to transition to complex program budgeting system, Another to govern by principles of transparency & accountability

There is no doubt that the good men and women in Ethiopia’s parliament recently acted out of a sense of duty and within the limits of their universe in adopting an ETB 117.8 billion ($7 billion) budget. In carrying out these duties, they neither had the luxury of expert assistance they individually could hire (with money budgeted for by the state, not so wealthy though). Nor was the parliament equipped with its own nuclei of independent body of staff to give counsel as experts, free from government or political party influences. Especially the latter could have come in handy in assisting the legislature assume, unlike now, its enormous responsibilities to the country’s finances and budget under Article 55 (10) and (11) of the Constitution.

Therein it is stipulated that the parliament would:

    “10. …Approve general policies and strategies of economic, social and development, and fiscal and monetary policy of the country. It shall enact laws on matters relating to the local currency, the administration of the National Bank, and foreign exchange.
    11. … Levy taxes and duties on revenue sources reserved to the Federal Government, it shall ratify the Federal budget.”

It beats me to figure out how, in God’s name, otherwise these parliamentarians could be on top of the game and the politics of programs that in the first place secretive politicians and their experts chisel out and the numbers the relatively better off crunchers pick as those that justify their master’s intentions?

I fully recognize that countries have to do with what they have. And as a developing country the gamuts of scarcities and inadequacies A-Z that these impose continue to be our nation’s misfortunes. Over the years, a mix of politics, arrogant power and underdevelopment have induced self-inflicted harm on our country’s future. At every stage, it has been depriving Ethiopia of so many of its trained manpower in diverse fields. The loss for several decades now to foreign countries and institutions of this huge pool of talents, treasures in human resources and experiences are being felt deeply with every passing day.

If it were not for that, today Ethiopia could have relied on them with some ease at this time of its needs to fill some of its gaping holes in every sector. Unfortunately, like sticky tradition defiant of irrelevance and despite its harmfulness, the orientation of Ethiopian politics remains committed to exclusivity and selfishness, hence, still being the main, push factor, making Ethiopia inhospitable to its citizens.

And, thus, it appears at the moment that it is mostly the country’s leaders that have been operating not only as its politicians. But also as its experts, its shamans that know and see everything. They also seem to be the once that feel the throbbing call of the nation’s renaissance—a word in frequent usage these days. As it happens, even this budget that speaks in numbers and indicators unfortunately, even without the confidence of those working on the programs and numbers, irrespective of whether what they are doing are properly targeted and are synchronous in their implementation of programs to achieve professed national objectives.

This is a faulty approach; all along it has been one of the causes why, while there has been lots of talk about progress that, as the prime minister on 26 May 2011 told a gathering of the business community, Ethiopia’s transformation has been very slow. There, he hit the nail on its head for the first time, when he spoke about the enormous misallocation of resources into unproductive areas. These resources instead could have utmost impact, enriching investors, benefiting the nation and the dividends reaching citizens, especially those that are skilled and trained, which in turn could have shown the rewards of education to the young generation.

If Prime Minister Meles Zenawi is serious about the new light he seems to have seen these days, if I have understood his meanings right, a good start for Ethiopia’s transformation would be, first to examine the politics of his party’s and his government’s heavy-handedness and lockouts that have been pursued this far. Then he needs to facilitate that nobody, including himself, should be above the law. Without this, that is why the good opportunities before our country are now being wasted slowly but surely. UNDP’s 2010 Human Development Index has convincingly shown, like in the past, the progress his regime claims is not certifiable, i.e., the progress Ethiopia has made in the last two decades are skin-deep, unless we are to take comfort from the fact of Addis Abeba’s transformation, as he rightly pointed out during his 26 May encounter with members of the Addis Ababa Chamber Of Commerce and Sectoral Associations (AACCSA).

The program budget, its configuration & approval

During the final reading of Ethiopia’s program budget for 2011/12 in Ethiopia’s Parliament on July 5, interventions by parliamentarians clearly showed that opinion was divided regarding the size of the national budget. (Incidentally, even the record of activities of this event was selectively televised, some of it in the question and answer part presumably surgically removed).

On one hand, there were some who were elated by the humongous budget of ETB 117.8 (about $7 billion), taking it as indicator of Ethiopia’s progress and the fruits of its economic growth. They did not need convincing, since a mere reference to the growth & transformation plan (GTP) in it has done the job. Moreover, Minister of Finance and Economic Development Sufian Ahmed on the media and on 14 June in his briefing to parliamentarians on the budget hammered the growths in the budget were designed to accommodate the requirements for GTP and the Millennium Development Goals (MDGs). In that regard, from his studied line, he also assured the people that this new budget would enable ‘the economy to double with an average GDP growth of 11 percent per annum and the current $235 per capita income will almost double and reach $355.’ With this, he had not surely come across successfully with his explanations.

At the same time, against the backdrop of the double-digit inflation that for a while now has been stocking the county, there were also those within the ranks of government backbenchers who could not disguise their anxiety about that big size of the budget for a poor country. Therefore, for this group of parliamentarians the judicious use of these scarce resources, i.e., in the most efficient manner, in keeping with established laws, regulations and procedures, was a matter of serious concern.

Their conviction seemed to have been informed, among others, by UNDP’s Human Development Report for 2010, which, by the intensity of Ethiopia’s multidimensional poverty, identified it as the 13th poorest country in the world and ranking it 157th on its several human development indices out of 169 states, i.e., before Sierra Leone, Central African Republic, Mali, Burkina Faso, Liberia, Chad, Guinea-Bissau, Mozambique, Burundi, Niger, Congo DR, and Zimbabwe.

Equally telling about the state of politics in Ethiopia is how parliamentarians were extra careful in what they were saying and how they were saying, even the widely shared concerns such as whether national resources are being utilized for intended purposes and overall resources allocations. In their interventions, almost all government backbenchers employed the third person action verb “ይላሉ” in the plural for “others say”, “they say”. This, in their view, was sort of their insurance policy, the benefit of which is in making room for deniability. On the other hand, ‘the lone ranger’ the single opposition member in parliament constantly used “እንላለን”, the action verb in the first person plural (“we say”). With the use of the verb “ይላሉ” (“others say”, “they say”), government backbenchers made their interventions sound, as if they were speaking about what they heard or read somewhere and that they do not associate themselves with or condone.

This in our view, what more evidence could come to show the world extent of the fear that has gripped Ethiopians in general, even within the national parliament, as its members appeared restrained to express their opinions with freedom and dignity, as they go about their duties as representatives and defenders of the interests of the people?

Probing the prime minister

Unsatisfied with what they heard from the minister of finance, some of the parliamentarians chose to raise their questions to the prime minister directly and carefully, when he attended the submission for approval of the budget recommendations of the legislature’s Budget and Finance Standing Committee to the House on 5 July. Those who fired interrelated questioners included MP Aselefetch Wordofa, Zelalem Tareqegn, Girma Seifu, etc., were amongst the first eight parliamentarians that wanted to know more in that constrained environment about some of the government’s intentions in this huge budget, the sense of its preparedness, the drought, inflation, sub-regional instabilities, Ethiopia’s armaments, etc. At the same time, the very contents of the questions, among others, revealed how much parliament has been kept in the dark, even in respect of some issues that fall within the ambit of its constitutional mandates.

    Their pressing preoccupations in particular spoke to:

    • Does Ethiopia have the capacity to administer an ETB 117.8 billion ($7 billion) budget?
    • Whether the budget could worsen the current double-digit inflation, which by end June was hovering around the 40 percent threshold. The question in this regard was whether a good chunk of the budget would be paid out as premium for high inflation—a price the country must pay for its macroeconomic instability;

    • The question of ETB 15 billion that the 2004 (Ethiopian calendar) Budget Proclamation, referred to as “Support for Achievement of Millennium Development Goals” was raised repeatedly. Many wondered if there was any good rationale for such separation in the budget for the fiscal year 2011/12;

    • The other key question related to the budgets of autonomous agencies, such as those involved in development activities, including the defense industry, and their programs whether their withholding from parliamentary oversight would not conflict with the mandate of the parliament in reviewing and approving financial and budgetary questions. This was followed by the question why there was no budgeting for some activities such as railway construction and the Renaissance Dam?’’

    Having carefully listened to these concerns, the prime minister started his response by stating:

    “በዛሬው ዕለት በጀቱን ለማስፈም የቁጥጥርና የማስፈጸም አቅም ግንባታን በተመለከተ የተለያዩ ጥያቄዎችና አስተያየቶች ተነስተዋል። በያዝነው ዓመት ወደ ፕሮግራም በጀት ተብሎ በሚታወቀው–program budgeting ተብሎ በሚጠቀሰው–የበጀት አያያዝና አፈጻጸም ሥርዓት የተሸጋገርንበት ነው። እያንዳንዱ በበጀት የሚያዘው ብር ከተጨባጭ ፕሮግራም ጋር የሚመደብበትና የተመደበው ገንዘብ በህጉመሠረት፤ በሥርአቱ መሠረት ጥቅም ላይ መዋሉ ብቻ ሳይሆን፤ የተቀመጠለትን ግብ፡ የተቀመጠለትን ዓላማ፡ ፕሮግራም እያስፈጸም ለመሆኑ መቆጣጠር የሚያስችል ሥርአት ነው፡፥ ስለዚህ የበጀት አፈጻጸም ቁጥጥርን በይበልጥ ውጤማ ለማድረግ የሚያስችል የበጅት አያያዝ ሥርአት ነው ተቀርጾ የተቀመጠው፡፡”


    “Today, various questions have been raised and observations made pertaining to capacities to implement and administer this budget. This year, however, we have transitioned to a budget administration and implementation system known as program budgeting. It is a system designed not only to see to it that each and every ETB in the budget is directly linked to a corresponding program and that it is properly implemented, but also ensures that it is efficiently utilized, in accordance with regulations and procedures, toward attainment of planned objectives, the goals identified by programs, thereby enhancing productivity of budget implementation procedures.”

The issues & the doldrums

Nothing could define program budgeting any better than the prime minister’s characterization of it through its functions. However, his explanation is one of reiteration of a theory, precise as it may be, was no indicator of the way forward for Ethiopia to make the new system work. In that regard, government also has taken no measures that he could speak of. Therefore, in respect of program budgeting the prime minister simply stopped at that. He left no option to his listeners, save piecing together a scenario of possibilities, from which emerges a not so encouraging picture.

It is important to state here that, if the past two decades of this regime are any guide, the indication is that program budgeting, effective and as desirable as it is, could never be translated into practice in Ethiopia, much in the same manner as its predecessors. In other words, the ingrained behavior of this regime during the past decades is evidentiary that Ethiopia’s political power is mortally hostile to transparency and accountability. It is because of this, program budgeting would be unworkable for our country, denying it of the most effective mechanism to protect its scarce resources and facilitate their efficient utilization to improve the life conditions of our people and ensure its development, in accordance with strict interpretation of the laws, regulations and procedures.

Playing in my mind at this point is the dismissal of Lemma Argaw, the previous Auditor-General, who was fired after his report to parliament in October 2006 uncovered close to 7.2 Billion Birr (approximately 900 million U.S dollars at the time) that was unaccounted for, most of it in the regional states. At the time, Prime Minister Meles Zenawi burst into usual rage in parliament, where in sharp contrast to the responsibilities of his office, stated, “The regional administrations have the authority that could go as far as burning the money they received as subsidies from the federal government, if they so wished.” Not unexpectedly,in a letter of 10 November by the prime minister the auditor-general was relieved of his post, without consulting parliament that appointed him.

As far as inflation is concerned, although the prime minister admitted openly for the first time that money supply was the real culprit behind Ethiopia’s double-digit inflation, the prime minister shared in this context a worrying logic that locally purchasing power of ETB has not been affected! He added that concerns over the budget worsening inflation were unwarranted. Without providing any evidence about effectiveness of the budget against poverty eradication in the overall sense to date, he said Ethiopia has capacity to implement even a budget of higher magnitude, if only the country had more resources.

The explanation on government deficit financing was also cause for concern for many parliamentarians. The prime minister indicated that he would not order the National Bank to print money or borrow from it. Instead, a worse measure he has in mind is to sale treasuries to the Development Bank of Ethiopia (DBE) to secure ETB 10.6 billion. Recall that the DBE released its five-year strategic plan only in October 2010. Therein, it indicated that its goal was to provide more loans for investments to the private sector to the tune of ETB 22 billion. Now it appears that government desire to finance its deficit through that would, without a doubt, crowd out private investors.

Finally, on the ETB 15 billion, allocated for support for MDG and for direct utilization by the regions, in accordance with the 2004 Budget Proclamation, the conflicting explanations provided by the prime minister and his finance minister were unfortunate. Not that they need resolution, since Meles is also the finance minister. However, as far as, parliament is concerned neutrality has been its chosen path. The finance minister says the monies belonged to the regions. The prime minister argues these monies belonged to the federal government, not the regions.

Now the problem is that this would put government auditors in a difficult position. In other words, what position could they take, in terms of mandate for their reviews of the use of that ETB 15 billion? Nor is it clear why the prime minister should be insistent that the money stay with the federal government. I never knew he was so badly in need of huge allotment for petty cash–rather discretionary budget of this magnitude!

Parliament ill-prepared to defend the interests of the people

Early on, in commending the budget for approval by the full House, MP Anno Waqe, Chairman of the Budget and Finance Standing Committee, tried to assure the House that the budget for 2011/2012 was a program budget. To some parliamentarians, this budget only made sense by association with the GTP, appreciating that the budget was also GTP-based. There was no need for added explanation on this. Therefore, he added, which also Meles quoted later, that program budgeting would ensure accountability and efficient utilization of our country’s resource towards attaining those goals.

Moreover, without indications how program budgeting could be rendered effective in an environment where financial and program audit functions do not enjoy political support, Chairman Anno Waqe quietly moved to safer territory, to describe only nitty-gritties of the budget as follows:

    • Frist, growth of the budget was exactly 39.4 percent i.e., about ETB 40 billion ($2.4 billion);
    • Secondly, 60.6 percent of the budget is for the federal government, 39.4 percent to regions.
    • Thirdly, in terms of configuration 76.2 percent of the overall budget or ETB 89.8 billion ($5.2billion), which incorporates deficit financing of ETB 10.6 billion ($620 million) and 23.8 percent, i.e. ETB 28.0 billion ($1.6 billion) to be secured through foreign aid and loans.
    • Fourthly, 71 percent of the budget is devoted for road construction, education, food security,
    health, capacity building, rural electrification and irrigation development. The breakdowns of these, with some additional information, have been provided in the table below.
     In the Negarit Gazette this amount, as MDG allocation, is distributed under the different regional states. The premier contended this money earmarked for each region is for the regions. Finance minister stated in parliament the money is earmarked for the regions
     Source: Ethiopia’s Country Strategy Paper 2011-2015, African Development Bank. April 2011.
    *2009 & 2010

The chairman did not bother to discuss about other issues for which provisions have been made in the budget, for instance, defense, water and sanitation, etc. Similarly, he did not show that parliament should have position on the use of the ETB 15 billion allotted for the regions.

In any case, I am not a person wedded to the notion that pumping substantial amount of monies to the regions is a smart idea. To start with, the regions are even worse in their lack of capacities to effectively and efficiently utilize the funds. Nor is accountability functions developed there, with Meles for political purposes defending the corruptions of smaller bosses, as happened in the case of the 2006 audit report, mentioned above.

I do not also support the idea that the federal government utilizing the monies, as the prime minister deems it fit that he keep an ETB 15 billion kitty for his discretionary use. This would only reduce these hard-earned resources of the country into political instrument to serve interests of the ruling party. In the current situation, where accountability is minimal, we have no choice but to park it where it would be visible and where its utilization is more visible and to what ends.

On the question of the defense industry, the prime minister’s response was total denial. However, defense industry in Egypt was a huge enterprise, with no oversight by the central government, including its income. In the past several decades it served as basis in strengthening the pact between the Egyptian state, headed by men-in-uniform turned civilians, and the army for the latter to stay out of day-to-day politics. It is only supervised by the National Organization for Military Production, within the Ministry of Military Production, under the minister of defense.

Whatever impregnated the idea in Ethiopia may not be any different, since Meles’s desire to clear in time any would be competitor from the power deck is of unimaginably lusty!

Parliament is hardly serving interests of the people more diligently

The other observation that one could make in respect of the work of parliament is that it is a body that has resigned its responsibilities. It never asks the executive branch, why certain things, within its specific mandates, take place without it being consulted. The issue here is not to enjoy thrill of the chase, or to waggle to find out who is more powerful. This is the only way to ensure our country has a governance system that is accountable and democratic. For instance, it was disappointing to hear from parliament asking the prime minister to be told if it were true that Ethiopia was ordering 200 used tanks, worth hundreds of millions of dollars, from Ukraine. They were asking the shaman if the current drought is to hit Ethiopia. For that matter, it was amusing to hear members of parliament asking the premier, again using that “ይላሉ” verb, for “the say”, to show that it was not ‘they’ talking about this or that!

Along the same line, there is also the question of Ethiopian peacekeepers serving in international missions, sanctioned by the United Nations. Although it is the question of war and peace, where our soldiers could lose their lives, parliament has no say what soever, even when it is in name the body responsible for budget and finance. In the past, in Somalia Ethiopia reportedly had high causality figures that was initially hidden from parliament and later officially denied information. This time, a force of 4,200 is scheduled for operations on the border between Sudan and South Sudan; parliament has not been consulted at all, another evidence of power being centralized in the hands of a single person.

The worry is not anymore that it could get worse for Ethiopians in respect of their human and civil rights, but how bad it would become for the future prospects of democracy, economic growth and development in Ethiopia.


Recently I enjoyed every moment of reading in the 17th July issue of Addis Fortune (Rising Executive Power Trumps Rule of Law) by Yohannes Woldegebriel, who is a lawyer of stature within the regime for sometime and now Director of Arbitration Institute of AACSA. I found his views very relevant to the issues this article has been discussing in a series. Equally importantly, I cherished with all sincerity the coincidence that, within twelve days after adoption of this $7 billion budget, he wrote:

“The year [2011] marked an unprecedented de jure and de facto rise of the power of the executive branch of the Ethiopian state. Concomitant with these phenomena, the Prime Minister appears to be heading toward omnipotence with unrivaled authority. Accordingly, the concern of an overzealous executive undermining the legislature is widely accepted…

    Mr. Woldegebriel is not content to leave it at that. He rightly put the problem to where it belongs: greed for power by stating:

    “Paradoxically, the first measure taken by the EPRDF dominated legislature in starting its duty involves adopting a law in favour of the executive that has a dramatic effect of undermining its own power. It surrendered its constitutional power of “reorganising the federal government executive organs for closure, merger or division of an existing executive organ or for a change of its accountability or mandates or for the establishment of a new one” to the Council of Ministers, which is accountable to the Prime Minister, under Article 34 of Proclamation Number 691/2010. This proclamation transferred the legislative power for the establishment of any executive body to the Council, whenever it is deemed necessary … It is bizarre, however, for Parliament to transfer its ordinary power to the executive, whilst it can do it and particularly when it has not been proven that it is overburdened in dealing with such activities.

    Obviously, these activities will require the executive to additionally engage parliamentary works. Therefore, when Parliament transfers its power to the Council of Ministers, would the procedure of adopting laws currently practiced by parliament, such as soliciting comments from stakeholders and holding public hearings, still be carried out? Does the Council of Ministers establish committees to review the bill in the same way as Parliament?”

    To make his case, Woldegebriel brings distinct examples of the abuses of power, as did Temesegen Zewdie, former speaker in the third parliament where, without any consultations with or consideration by parliament, the prime minister sent 4,200 Ethiopian forces to calm the complicated conflict situation between the Sudan and the Republic of South Sudan. Bear in mind that the situation in the Sudan merits seriousness because there is the involvement of international capital from all sides, where the competition has become tense. Their interests are rival, often assisted with under the table efforts to undermine one another. History has shown that this incendiary chemistry could work in such a way that volatility of the situation could get out of hand, thereby endangering many nations in East and Central Africa.

    Like most Ethiopians, Yohannes Woldegebriel’s concern is about the future of our country, since what he has written speaks to most Ethiopians, those who entertain similar preoccupations. Like many Ethiopians, he sees the omnipresence of the prime minister to be the root cause of our country’s under-performance. The view is that, notwithstanding the usual exaggeration of Ethiopia’s successes, what should worry citizens is that the better opportunities that are before Ethiopia now are slipping out of hand, due to the prevailing inequalities before the law and lack of accountability.

    Incidentally, during the question sessions an MP asked the prime minister about the state of the auditor-general’s report and the recommendations therein in which ETB 1.42 billion was unaccounted for in some offices. He reminded him that the report was forwarded to his office and expressed the hope that the parliament would be informed of the actions taken. While the prime minister addressed all questions, he did not choose to comment on the audit report for fiscal year 2009/10.

    It is fitting, therefore, that I end this piece with the closing words of Yohannes Woldegebriel: “The question of utmost importance remains, where is the nation is headed?”

    (To be continued…)
    *This article has been edited and a little bit revised, from the original that appeared on this webpage on 2 August, under the title It is one thing to transition to complex program budgeting system, Another to govern by principles of transparency & accountability”

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