Ethiopia’s GDP

Ethiopia’s GDP Growth Rates in Comparison with that of Sub-Saharan Africa

Ethiopian Business ReviewFebruary 17, 201320797

Graph 1:Ethiopia’s GDP Growth Rates in Comparison with that of Sub-Saharan Africa 2004 – 2011 Source: World Bank, World Development Indicators (2012); and IMF, World Economic Outlook (2011).

This figure shows the overall economic performance of sub-Saharan Africa (SSA) and Ethiopia. From a high base of close to 14pct real GDP growth in 2004, Ethiopia achieved a growth rate of nearly double the region. Ethiopia’s model of massive public sector investment is attributed for the consecutive double digit  growth. The country’s economic indicators seems to replicate the 1960’s and 70’s situation of Asian tigers; at the start of their economic takeoff. This broad based growth is set to continue in the foreseeable future according to the World Bank.

The success is not without a glitch. The private sector is still very young and its potential is yet to be exploited, with the exception in the service sector. The Growth and Transformation Plan gives a limited role to the private sector, as most projects have been planned to be executed by the government. High levels of unemployment, foreign currency shortage, low levels of productivity (especial in the industrial sector) and inflationary pressures resulting from huge public investment, will be among the challenges the economy will face.

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