From famine to finances: Ethiopia’s got economic potential

Home to Queen of Sheba and the only African nation to resist colonisation, Ethiopia has economic potential, according to a report published by the online news site The Market Mogul.

Despite war and famine – the “biblical famine” of 30 years ago, as well as civil war and political turmoil, Ethiopia is becoming what journalists and economists have dubbed as one of “Africa’s’ lions”.

As reported by The Market Mogul, Ethiopia has grown from strength to strength with an increase in the number of dollar millionaires with reportedly 1,300 in 2007 to 2,700 in 2013 and a massive 93% growth in GDP. One of the main reasons for the growth stems from the economic reforms and privatisation of state-owned businesses by the post-revolution government. Further privatisation has been seen in its pharmaceutical, manufacturing, large-scale farms and service areas and in 2012 accepted bids of around $121m for seven of its state-owned business.

While Ethiopia’s economy is enhanced by the mining, tourism, transportation, fishing, telecoms and manufacturing sectors, agriculture remains the dominant driving force. It accounts for around 46% of GDP and 85% of jobs. Much of the growth is credited to the Ethiopian government’s ‘Growth and Transformation Plan’, which has, and further plans to increase the amount of irrigated land, aide small farmers and help families which lack basic necessities. They also hope to rapidly increase cash crop yields from around 18 metric tonnes to 39 metric tonnes.

One of Ethiopia’s largest cash crops is coffee, with around 25% of Ethiopia’s population relying on coffee production for work. Coffee totals $840m for Ethiopia’s exports and foreign capital in the same year. Significant amounts are exported to the EU, Asia and North America and providing the government with 10% of its annual revenue.

However, an economy based on agriculture has its limits. According to The Market Mogul, one issue is that Ethiopia experiences dangerous droughts and surprise flooding, disasters which will worsen in the coming years from the repercussions of global warming.

As for the manufacturing sector, it is primarily concentrated in Addis Ababa and must expand across the country if it is to grow. Two other key areas could be its transportation and tourism sector, with the award winning state-owned Ethiopian Airlines, which flies to 61 international destinations and hailed as one of Africa’s best airlines, reported The Market Mogul.

Tourism is another important part of the governments’ plans to combat poverty. It accounted for 5.5% of GDP in 2006 but has only increased by a mere 2% since then.

Source: http://neurope.eu/