Ethiopia - Africa's Fastest Growing Economy
Posted on : Monday, 18th November 2019
With a population of over 100 million and an annual economic growth rate of 10% over the past 15 years, it presents a unique opportunity.
Ethiopia is one of the world's largest untapped markets, and there is an increasing belief that privatisation of state-owned enterprises could be one of the ways to attract potential investments and spur the economy.
Ethiopia is historically recognised as one of the most authoritarian and politically stifled countries in sub-Saharan Africa, has been increasingly turning toward openness and democratic processes.
Ethiopia has received new political and financial support from a number of parties, including the European Union, the World Bank and the IMF.
The new policies were also well received by the Ethiopian diaspora, a big contributor to the economy through remittances.
Ethiopia has a greater social stability.
Ethiopia has received new political and financial support from a number of parties, including the European Union, the World Bank and the IMF.
The new policies were also well received by the Ethiopian diaspora, a big contributor to the economy through remittances.
Ethiopia has a greater social stability.
Ethiopia has Youthful potential. In a world where service industries account for 65% of global GDP, these are the type of education policies that seem adapted to the new global context. Technology and knowledge-based industries have the potential to thrive, thanks to the cost advantages and the availability of human capital in Ethiopia. If the country's youth can be channelled through relevant skills training, then this human capital will become a key economy-boosting asset.
The Ethiopian government has resisted liberalising key sectors to foreign and local investors, but the executive committee of the Ethiopian People's Revolutionary Democratic Front (EPRDF), the ruling party, disclosed a plan to partially liberalise key economic sectors in June 2018. There are plans to offer minority stakes in airlines, power and telecoms to global investors. In addition, the possibility of railway projects, hotels and key manufacturing industries, have already created enough buzz to boost investors’ confidence and in turn, the possibility of attracting investments. The government has also created five industrial parks that have spurred the creation of 45,000 jobs, with the aim to set up a total of 30 and increase their manufacturing from 5% to 20% of GDP.
Local challenges around mobility, agriculture, infrastructure and healthcare for a country of Ethiopia's size could be turned into a series of opportunities by the start-up movement.
In addition to its strategic positioning as a long-haul transfer hub, Ethiopia is increasingly becoming an important destination for manufacturing, especially in the ready-made garment (RMG) sector.
With a strategic location and low-cost labour, Ethiopia is uniquely positioned to succeed in the apparel manufacturing space, provided they can train their young people to deliver the required quality.
Ethiopia is Africa's new growth engine.
