Earlier this month, the UK launched its largest-ever “tax partnership programme”, with Ethiopia. In terms of this partnership, which was announced by UK International Development Secretary (equivalent to a Cabinet Minister in South Africa) Penny Mordaunt while on a visit to the north-east African country, Britain will provide funding of £35-million to help Ethiopia increase its tax revenues.
According to the World Bank, Ethiopia has a population of 102-million (second only to Nigeria) and enjoyed an economic growth rate that averaged 10.3% a year from 2005/06 to 2015/16, and was 10.9% in the 2017 financial year. It is currently running at about 8%. As a consequence, the proportion of Ethiopians living in extreme poverty declined from 55.3% in 2000 to 33.5% in 2011. The country’s government is currently implementing Phase 2 of its Growth and Transformation Plan, which will continue to 2019/20 and aims to transform Ethiopia into a hub for manufacturing.
“Ethiopia’s security development and prosperity matter for the UK – which is why we’re working with the country to help it generate more tax from its rapid growth,” affirmed Mordaunt. “This will help Ethiopia fund its own development – and ultimately transition beyond aid.”
Britain’s Department for International Development (DFID) says: “The programme will transform Ethiopia’s tax system, helping it to harness the potential of its booming economic growth. This new partnership will also help the country generate revenue so that it can better finance its own services and development, becoming less reliant on aid . . . Ethiopia is rapidly industrialising, and, with this new partnership, the UK will support the country to meet its ambitions to develop its economy. Extra tax revenues will help the country tackle poverty, invest in its own services, boost economic growth and move beyond aid.”
Ethiopia’s industrialisation is also creating opportunities for British business in terms of both trade and investment, the DFID noted. This was highlighted by a visit by Mordaunt to a UK-owned clothing factory in the Hawassa Industrial Park, which is located some 275 km from the capital city of Addis Ababa, next to Lake Hawassa. While there, she formally launched an already announced Jobs Compact with Ethiopia, under which the UK will provide £80-million, over the next six years, to create more than 100 000 jobs for Ethiopians and refugees living in Ethiopia.
“We’re also helping the most vulnerable Ethiopians, including refugees who have fled neighbouring countries, to find jobs and rebuild their lives, creating the stability which will allow Ethiopia and the region to prosper,” she highlighted. “This is a win for Ethiopia and a win for the UK, including British businesses . . . which are thriving in East Africa.”
Thus, Britain is separately providing Hawassa with £3-million through various channels (including the United Nations Entity for Gender Equality and the Empowerment of Women’s – better known as UNWomen’s – Safe Cities programme, and the International Labour Organisation’s Better Work Initiative) to strengthen the well-being and safety of workers. More generally, a further £9-million, under the Civil Society Support Programme, will go to supporting civil society groups in Ethiopia, with particular focus on women, the young and people with disabilities. The aim is to help marginalised groups express their needs and opinions.
nother £27-million in humanitarian aid is being released to provide life-saving support for up to one-million internally displaced Ethiopians. This humanitarian aid will be used to fund blankets, health, hygiene kits, nutrition, sanitation, shelters, special foods for malnourished children, and water.