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A Growth Miracle
Ethiopia’s growth miracle, coupled with its large population and significant land mass, has attracted the attention of many international companies. Over the last ten years, the country has achieved double digit growth in real terms, averaging 10.6% per year, which is the second fastest in Africa
Ethiopia’s growth miracle, coupled with its large population and significant land mass, has attracted the attention of many international companies. Over the last ten years, the country has achieved double digit growth in real terms, averaging 10.6% per year, which is the second fastest in Africa after Angola and even surpasses that of China (10.2%). Growth is expected to continue at a rapid pace although forecasts suggest that it will moderate to just over
7% over the next five years. These growth rates are the fruit of years of investment and reform that have seen the country entrench economic, social and political stability.
The significant gains that Ethiopia has made over the last fifteen years - in terms of macroeconomic stability, growth, the development of hard and soft infrastructure, reducing poverty and improving the quality of life of ordinary Ethiopians - have contributed to creating the enabling environment that business - whether domestically-owned or foreign - needs to thrive and prosper. This environment is still a work in progress, and the investments planned in the framework of the current Growth and Transformation Plan (2010/11-2014/15) are designed to stimulate further success, while in many cases they embody business opportunities.
Meanwhile, investors from a wide range of countries have already set up operations spanning a variety of sectors. Some of these investments have already changed the structure of Ethiopian exports; others will gradually change the very structure of the economy, as the manufacturing sector matures.
Ethiopia’s growth “miracle” has been less a miracle than the result of persistence and dogged determination to address poverty in measurable and meaningful ways: by creating the hard and soft infrastructure that will enable business success, by playing better to the country’s comparative advantages in trade, and by ensuring both political and macroeconomic stability. In short, the factors underlying Ethiopia’s stellar growth record have been simple, but setting them in place represents an extraordinary achievement.