Published in PM World Today – July 2009 (Vol XI, Issue VII)

PM WORLD TODAY – VIEWPOINT – JULY 2009

Withered Hope!
By Getachew Teklemariam Alemu
The challenge now is to make sure that Ethiopia’s growth continues. Ethiopia
suffers from a lack of foreign exchange, which means it cannot afford machinery
and equipment. Electricity shortage also makes it hard to run heavy industry.
(Joseph stigliz, 2007)

The above phrase is taken from the writing of Joseph Stigliz, a Nobel-winning
economist, who was also chief economist of the World Bank, in his article entitled
on the ground: Joseph stigliz in Ethiopia. The quote would indicate the
severity of the challenges that had surrounded the Ethiopian economy by that
time. After two years, in this critical time of global financial meltdown, the
Ethiopian economy remained to be ailing as exports of the country has decreased
significantly, the once skyrocketed oil price has emptied the national reserve,
inflation is still high enough (in double digits) eating up people’s income, private
transfers are decreasing significantly and power shortage is still the major
headache of the economy.

Meanwhile, the only way of accounting for the uncertain future - proper
planning (with precise risk analysis) – seems to be left aside. As a keen
observer to what is going on around, I would pose two questions with simple
answers, which I would elaborate in the following paragraphs. Why are we here?
Ans. Because we are poor in planning. What is the way out? Ans. Thoughtful
planning.

It might seem too foolish to give such simple answers to questions referring to
the very intricated socio-economic problems of Ethiopia. On the other hand,
critics might follow stemming from the fact that Ethiopia is known for pioneering
development planning in Africa. Yet, these points will not change the answers to
the above questions.

It is true that Ethiopia has a well articulated long term perspective plan, and
medium-term development plan, in addition to indicative sectoral plans, which
are crafted to guide the overall socio-economic development of the nation. In
going through these documents, one can witness that they are filled with
ambitious, positive and hopeful statements. They are designed in a way that they
could give guidance to lower level efforts, which are expected to be the tangent
points of beneficiaries and development activities.

To assure this, the recent medium-term development plan of the country

(PASDEP) says that “the objective of the plan is to define the nation’s overall

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 Published in PM World Today – July 2009 (Vol XI, Issue VII)

strategy for development in the coming five years; to lay out the directions
Ethiopia wants to take, with ultimate objective of eradicating poverty; and to
outline the major programmes in each of the major sectors”. It is good that
PASDEP has articulated the promises. Nay, what is mandatory is to
instrumentalize the way to live the promises.

To be as guiding as it was aimed, the plan should have been accompanied by a

complete list of projects to be implemented within the planning period and their
implementation history. Provided that any of the sectoral plans do not have the
list also, it would show a big planning gap. Positive statements merely would not
lead us to the point of eradicating poverty, rather a concerted planning of
projects and their inclusion in the framework of the medium-term development
plan.

Doing so would have three important economic benefits. First, it would help to
allocate scare resources in accordance with our national priorities. Second, it
would help to control public expenditure so as not to be inflationary to the whole
economy. Third, it would help to mobilize investment in tandem with the
achieved milestones. As it is not being done, we are failing in all three. This could
easily be observed in the power sector, where the nation is incurring huge costs
as a result of poor project integration management, and its potential impact on
national GDP.

Another planning gap, which could also be augmented by evidences from the
current problem in the power sector of the country, is the insufficient attention
given to the three cornerstones of project planning; scheduling, cost analysis,
and risk and uncertainty analysis. The cumulative impact of the poor practice in
the three areas, improper risk and uncertainty analysis leading to unacceptable
lag in project completion with huge extra-cost, has laid its shadow on the fragile
economy of the country.

The project managers should bear a fair share of their blame for not being
attentive to their major responsibilities: watching the cost, schedule and risks of
their projects. More of the blame, however, as to me, has to go to the planning
office of the power corporation as it is the responsible unit for overseeing the
whole portfolio of projects, where the whole work of controlling the cost,
schedule and risk of portfolio of projects resides.

Failing to do so has made the nation to pay unexpected 100-120 million Birr in
fuel cost and 20 million Dollars in six-months renting cost for the two rented
generators planted near the capital Addis Ababa, aside from the power shedding
being undertaken all over the country. What is more important than this is the
opportunity cost left by the economy due to incompletion of the major power
projects on-time.

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 Published in PM World Today – July 2009 (Vol XI, Issue VII)

Despite the fact that the above planning gaps are shaking our fragile economy, it
seems that we are still giving deaf ears to our project planning and management
practices. It is known that our economy has been witnessing a double digit
growth for the past six consecutive years with accompanying progress in the
human development (education, health, nutrition, and child development)
sectors. But, owing to the fact that we are still poor and our economy is a
toddler, we shall not scarify even one unit of our growth for the rampant
planning malpractices. As time is clicking on us, we have to wake up, and move
one step ahead towards standardizing our project planning and integration
management practices. If we do so we might minimize the cost of our failures,
and recover our plummeting hope.

About the Author:

Getachew Teklemariam Alemu

Author

Getachew Teklemariam Alemu is an International

Correspondent for PMForum and PM World Today in Addis Ababa, Ethiopia.
Mr. Alemu is also an Infrastructure Projects Expert in the Development
Projects Department of the Ministry of Finance and Economic Development,
government of Ethiopia. Getachew is responsible for monitoring, appraising
and reporting on public sector infrastructure projects financed by the
Ethiopian government and bilateral/multilateral donor agencies. He has a
Bachelor’s of Science degree in Land Resources Management and
Environmental Protection from Mekelle University in Ethiopia. He has also
been educated in macro economic development, infrastructure development
in developing countries, national economic development and project
management. Getachew is currently studying at Addis Ababa University for
a Masters Degree in Regional and Local Development. More information
about Getachew Alemu can be found at http://www.pmforum.org/pm
%20forum%20team/index.htm#5. Getachew can be contacted at
getdem2006@yahoo.com.

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