Ethiopia’s Race to Middle Income

Middle-income countries are nations with a per-capita gross national income between USD1,036 and 12,615. Nations with lower per capita income than this are classified as low-income countries. This group – least developed countries (LDCs) – comprises 48 vulnerable countries including Ethiopia.
With a per capita income of around USD100 for much of the period before 2000, Ethiopia plans to become a lower middle-income country by 2025. In tandem with that, the country has been investing hugely in infrastructures and provision of basic social services.
The result has been robust as the country achieved double-digit economic growth for over a decade. Per capita income reached USD794 in June 2016. According to the WHO, life expectancy also reached to 64.8 years in 2015 from 47 in 1991. These astonishing performances compel many to believe that the country will achieve a middle-income status in nine years.
However, a recent UN report says Ethiopia will not graduate from LDCs list by 2025. EBR’s Ashenafi Endale delved into the details of this delicate issue by refereing research findings and consulting experts as well as government officials to offer this report.

Located 532km east of Addis Ababa, the Harari Regional State (HRS) is the smallest member of the Ethiopian federation – both in population and area size. Uncommon elsewhere, 54.18Pct of the state’s population lives in urban areas. With a great number of historical sites, mosques, shrines, cultural attractions and relatively robust tourism, it is regarded as an open museum.
The city of Harar, the seat of the HRS was founded in the 7th Century as the seat of the Adal Muslim State and reached its peak during the 16th century whereby the Jegol Wall, one of the world’s heritages inscribed by UNESCO in 2006, was built in 1552 by Amir Nur bin Mujahid to defend the city from intruders. For centuries, the fortified city served as a trading hub due to its strategic location and metropolitan culture.
Since its founding, Harar’s 72 successive amirs established independent state and government until 1887, which marked its incorporation to Ethiopia by Emperor Menelik II.
Harar won the UNSECO Peace Prize in 2002 and 2003 for accommodating faith with love. In many places globally, where religious antagonism is increasing, Harar demonstrates an astonishing opportunity of peaceful coexistence of different religions. This could be easily witnessed by the physical proximity of Catholic and Orthodox churches in the city along with mosques in few hundred metres radius in Jegol Wall; but never in history have their differences caused major conflict. EBR’s Tamirat Astatkie visited the historical city, described often as the fourth holy city in the Islamic world after Mecca, Medina, and Jerusalem, to learn more about its development.

Many Think NBE Bill Will Make Private Banks Grow, but Fear Liquidity Crunch

In March 2011, the National Bank of Ethiopia (NBE) came up with a policy insisting private commercial banks to buy bonds, using 27Pct of their annual loans and advances, to help finance loans from the Development Bank of Ethiopia. The NBE says this was necessary to strengthen the private sector. Since then close to ETB50 billion has been sacked out from private banks and used to finance investment in manufacturing.
Although the requirement of purchasing NBE bill had negative and significant impact on the liquidity and profitability of the banks, insiders say it has stirred competition in the industry, thereby contributing to improved performance – increased deposit mobilisation and financial inclusion. EBR’s Ashenafi Endale explores the issue further.