ADDIS ABABA-Forum for Social Studies (FSS) organized a public policy dialogue on the role of the private sector for regional development of Tigrai, in Mekelle on September 6, 2016, the first ever dialogue organized by FSS in the region.
Dr. Zenebe Gebreegziabher, an Associate Professor of Economics in the College of Business and Economics, Mekelle University (MU) delivered a discussion paper titled: The Role of the Private Sector for Regional Development of Tigrai: Policy and Practice.
Dr. Zenebe started his presentation with a brief discussion on the economic theories, saying that the theories on the private sector and the government involvement are compatible and can co-exist. He also outlined the necessary elements for a vibrant private sector as institutions, policy frameworks and infrastructure. Dr. Zenebe also discussed the pivotal and indispensable role that a private sector can ideally play in any given country, and that its contribution to the economy depends on the availability of a carefully crafted policy and procedures.
Having said that, Dr. Zenebe focused on the private sector in the region, saying that the sector can play directly and indirectly; discussed the pertaining policies and strategies, including institutions that are available in the region, to ensure this.
He then explored the national polices on the private sector and came down to those that are region specific.
He said the private sector in the region has played and continues to play a significant role with meaningful and tangible contribution to the region’s overall development.
He then provided data to show the meaningful and tangible contribution to the economy in terms of the number of job opportunities created, the sector’s contribution to the regional GDP, and capital formation.
Moreover, Dr. Zenebe said the private sector contributed significantly to the region’s revenue with its 60% from tax collection and played in promoting a culture of saving, and the value of work.
Finally, he identified a number of challenges faced by the private sector in Tigrai, which he said are the reasons for the absence of a vibrant private sector.
He said the private sector suffered from a number of lack of trained and skilled man power on the job market, and lack of personnel with government institutions to be able to provide support and facilitate its efforts, and the infrastructure, and most importantly, lack of good governance and rent seeking behaviors on the part of the officials with government institutions in the region.
In conclusion, Dr Zenebe said avoiding these bottlenecks could significantly improve the situation and ensure an active and meaningful role from the private sector, which he said was indispensable. He also recommended a research based dialogue among the stakeholders.
Two discussants-Ato Michael Reda, an independent economic and strategic adviser representing the private sector and Ato Anteneh,Head, Investments Promotion Core Process with the regional Bureau of Trade and Industry representing the regional policy organs, forwarded their comments standing from the points of views of their experiences and positions.
Ato Michae’s comments focused on the methodology of the paper presented, stating that the discussion paper lacks focus and perspectives and forwarded his comments to enrich the paper. He said the paper needs to be strengthened by data that shows the tangible contributions of the sector to support the researcher’s argument that the sector is playing a positive role for development in the region. He is also of the idea that the paper should explore more and analyze region specific policies and discuss how they have impacted the private sector involvement and their desired contribution to the region’s development. He also said the paper should look at the impact of EFFORT in terms of its strategic objectives such as strengthening MSEs, and entrepreneurship, and from this perspective see whether or not EFFORT is crowding in or crowding out, the value chains involved, and efforts by the private sector, and discuss the reasons, and thereby provide the policy directions and show the institutional arrangements. Moreover, the paper needs to explore the region’s agricultural sector in terms of ADLI and see if the sector is feeding in to the industrialization (in providing raw material for the industrial sector) as desired, and whether or not the sector is still at self suffiency stage, and thus put the way forward policy options in this regard.
Ato Anteneh Zewdie, the second discussant, on his part said that he agreed with most of the views and recommendations forwarded by the first discussant, and added that the challenges of rent seeking and corruption should be emphasized as the main challenges facing the private sector in the region. He also said capacity problems with government bureaus and lack of a one-stop service in the region should also be explored to strengthen the paper. Finally, he said the paper could add rigor with an in-depth review of related literature which he said are available.
In the discussion session that ensued after the presentation and the comments by two discussants, several comments , suggestions and questions were forwarded by the attending participants, to which Dr. Zenebe responded, and took note of those he said he would work on to improve the paper so it can best serve it purposes.
Most of the discussion revolved on the multi-facetted challenges at the policy as well as operational levels such as: lack of trained manpower, credit facilities, market, and red tape, good governance, and rent seeking. Interestingly, participants also discussed the problems with the private sector itself such as some tendency to focus on profits, without meaningful contribution to the regions development. They stressed that the private sector needs to look inwardly and see if it is living up to its expectations as a major player in the overall development of the region.
Some 70 participants representing the various regional bureaus, the private sector, Mekelle University and the media attended the public policy dialogue.
The event was graced with the presence of Dr. Kindeya G.Hiwot, President of the Mekelle University, who was invited as the guest of honor, who gave opening remarks.
In his opening remarks, Dr. Kindeya noted that the topic was timely and relevant and that forms such as this would make a big contribution in not only addressing the issues of the private sector in the region, but also in promoting a culture of debate and inclusive policy making.
He said he is already aware of the public policy forums organized by FSS, and in fact has attended some in the past. He congratulated CBE staff for forging partnership with FSS on this project, and encouraged them to go for a more serious partnership with FSS.
He also thanked participants for coming to attend this important event and wished them a good and fruitful discussion.
The dialogue forms part of the newly launched public dialogue series under the main theme titled: Discourse on Ethiopian Development: Challenges and Prospects that FSS is currently implementing with the financial assistance from DFID through the British Embassy in Ethiopia.
Some 12 policy issues are to be organized around the main theme, of which four are to be organized in four regional states in line with FSS’s new strategy aimed at more inclusive and more participatory policy making and thereby widening its influence and impact.
The Mekelle event was organized in collaboration with the College of Business and Economics of Mekelle University.