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After a series of exchanges with some friends in the Diaspora who have
yet to be convinced of the merit of purchasing EEPCo’s Millennium
Bonds, some thoughts arose that warranted putting pen to paper.
For a professional who has spent a considerable number of years in the
electricity industry in the United States (US), the news that the
Ethiopian government has embarked on the construction of a major dam
was overwhelming. Dubbed the Great Millennium Dam, it would have the
capacity to improve the lives of the people.
The international development community has long been aware of the fact
that energy is often the critical missing link in the effort to
reduce poverty and bring about development in Africa.
Energy affects people’s ability to access clean water and increases
agricultural productivity. It also helps to improve health and
modernise education, aside from helping to address wide-ranging
gender inequalities. However, it is alarming to note that millions
of Ethiopians lack access to basic energy services, even in the 21st
century.
It is time for Ethiopia to take bold and decisive steps to free its
people from energy poverty and along the way create better economic
opportunities for the present generation and for those to come.
It is precisely for this reason that many Ethiopians who are engaged in
the field of development received the news of the Millennium Dam on
the Abay River, which would be generating 5, 250MW of power, with
great enthusiasm.
Such types of projects do not come cheap. There is an enormous capital
requirement associated with the construction and development of
utilities on such a scale.
Traditionally, most developing countries, including Ethiopia, have
relied on Western aid and loans to finance development projects.
Yet, financing development through such mechanisms is proving
difficult as they often come attached to conditions that many poor
countries find too difficult to meet without undermining their own
priorities.
Development experts advise developing countries to improve the human,
organisational, and institutional capacities that would allow them
to better mobilise domestic resources to tackle developmental
challenges. Improving domestic resource mobilisation is important
for poor countries like Ethiopia, for at least three reasons.
Potentially, it represents the largest source of income governments
have direct control over and are able to use for the provision of
public goods and services. Properly managed domestic resources can
help strengthen fiscal institutions by providing stable and
predictable revenues.
This minimises long-term aid dependency, which in turn creates space to
put in place development strategies that reflect the recipient
country’s own priorities.
Consistent with these objectives, the resources made available through
the sale of Millennium Bonds would enable the country to exercise
relative independence in making its decisions. By helping set its
own priorities, this would provide the platform for public
participation in the process.
Governments across the world issue bonds on a regular basis for a
variety of economic purposes. For those familiar with American
history, War Bonds were issued during WW II. The sale of these
played a powerful role in galvanising the population toward the
common aim of winning the war. Some historians even argue that War
Bonds were issued primarily to remove liquidity from the market in
order to help ease inflationary pressure.
High inflation had bedevilled the war economy resulting from full
employment and rationing. Regardless, the bond was crucial in that
it raised an enormous amount of money for the war effort. More than
85 million Americans, representing half the population at the time,
purchased bonds, totalling 185.7 billion dollars.
Using various media outlets, the government made emotional appeals to
entice citizens to participate. No doubt, the public responded
positively. Despite the fact that the bonds carried rates of return
which were far below the market value, people continued to buy them
because it gave them a moral and financial stake in the war effort.
The people who purchased the bonds came from all walks of life with
varying shades of political and ideological beliefs. The one thing
that united them was their common desire to end the war with
victory.
Ethiopia is also at war. The war is not with an external enemy, but
against an enemy from within; energy poverty. Ethiopians everywhere
should rally behind this particular project that would undoubtedly
contribute towards setting the country on a firm path to progress
and development.
The Millennium Bonds afford Ethiopians everywhere, but particularly
those in the Diaspora, a unique opportunity to participate in the
country’s effort to end poverty.
There might be some who may not respond to this appeal favourably and
they should be assured that this is no ploy to play the politics
that often accompany such initiatives. As long as there are people,
there will always be political squabbles and contentions.
However, national progress should not be held hostage by one group or
the other until they are fully happy and content with the existing
political environment.
Infrastructure being built now will outlive everyone alive and perhaps
their children and grandchildren. Building the Millennium Dam needs
to be treated as a national cause that transcends the politics of
the day.
To build public confidence, bond issuing agencies need to play their
part by adopting good management practices anchored on principles of
good governance. Bond holders also have the right and responsibility
to demand accountability from issuing agencies and ensure that the
funds collected are utilised efficiently and effectively. |
