News Feature

Newsletter 13

Ethiopia Registers Commendable Economic Growth

Ethiopia has registered considerable economic growth through its efforts to fight poverty and backwardness. One witnesses a lot of positive changes in the various sectors of the economy.

Through ensuring stable macroeconomic development, Ethiopia has achieved a fundamental come-back in the march towards prosperity and sustainable growth.

In his report to the House of People’s Representatives on March 28, 2006, Prime Minister Meles Zenawi said that high economic growth has been registered in the country over the last three years through massive participation of the public.

“Sound government strategies coupled with the active involvement of the public and the private sector has resulted in the rapid economic development” Meles stated in the report.

The Ministry of Finance and Economic Development of Ethiopia announced that the country has registered a growth of 11% in 1996, 8.9% in 1997 and 8.4% in 1998 EC, which is more than the required 7% annual GDP growth set in the Strategic Document for Poverty Reduction Paper to meet the MDGs by 2015.

For a country to reach the level of middle income countries, it needs to register an 8 – 10% annual economic growth.

"If the economic growth continues with the same pace, over the coming 20 to 30 years, the country will have been placed among middle income countries" Minister of Finance and Economic Development Soufian Ahmed told reporters.

Registered for the first time in the history of the country, the growth Ethiopia achieved compared to other Sub-Saharn African countries is by far greater, the latter registering a five percent increase.

While agriculture takes the lion's share to the overall success attained, the market-led strategy implemented by the government in this regard has brought about the desired change in the sector.

Broad based as it is, the growth benefits farmers and the society at large whereby agricultural and rural development programs are enhanced and the supply of infrastructure, educational and health  services is on the rise covering most areas and improving the lives of many.

For one percent economic growth in Ethiopia poverty is reduced by 1.3 %.  The country's annual per capita income, studies show, has increased by two percent.

The African Development Bank's annual report stated that Ethiopia is one among the African countries that are ensuring high economic growth. It further explained that the GDP performance of Ethiopia for the years ahead is promising.

In a bid to attain stable economic development, thus mainly contributing to the growth, the government has been effective in promoting investment, regulating inflation, expanding  infrastructure and setting viable policies and strategies.

Statistics show that the investment sector in the country is growing   more than ever. Within the past three years alone, projects worth some 145 billion birr have been licensed in various sectors.

Export trade is also on the rise thereby diversifying and increasing the type and amount of export goods.

Business in Africa, a UK published Magazine hailed Ethiopia as having made some significant strides to take part in the global economy.

As economic growth of a given country largely depends on the economic strategy it adheres to, the policies and strategies of the government that proved effective having won the support of the public have played a crucial role in the result achieved.  Whereas low implementation capacity in terms of  man power and institution as well as economic vulnerability and poor financial capability remain challenges in the future for the sustainability of the growth attained, the government has expressed commitment to sustain the economic success.

It is believed that much remains to be done to ensure durable and comprehensive development to transform the country from its history of abject poverty to a land of stable economic growth and prosperity.  And thus, the nation-building endeavour would continue with further vigour through concerted efforts by the government and the public at large and through the enhancement of international cooperation.