Economic growth and development in ethiopia springerlink. But under different conditions, similar rates of growth can have very different effects on poverty, the employment prospects of the poor and broader indicators of human development. The ethiopian economy has experienced impressive growth performance. It seeks to answer the question what proportion of recorded economic growth can be attributed to growth in the capital stock, growth of the labor force and changes in overall efficiency.
The second section discusses the economic growth and poverty in ethiopia. Ethiopia s strategy for sustaining the rapid and broadbased growth path hinges on the following pillars. Ethiopia growth and transformation plan ii gtp ii green. Even as ethiopia continues its development and seeks to transition its economy toward higher valueadded sectors like manufacturing and services, agriculture will remain a crucial segment of economic growth, and an important component of ethiopia s development trajectory. Ethiopia real gdp growth annual % ethiopia real gdp per capita growth annual %.
The consultation process and overview of the major outcomes 29 iv development and poverty reduction challenges 33 v overview of ethiopia s development goals, policies, strategies, and targets 36 5. The role of health in economic development is analyzed via two channels. The interaction between growth and inflation is one of the macroeconomic problems. Degefu department of statistics, hawassa university, hawassa, ethiopia abstract micro and smallscale enterprises have key roles to ensure economic growth and reduceof hawassa city, ethiopia poverty in developing countries.
Therefore, the general objective of this study was to analyze the economic growth and social development performances in ethiopia during the first growth and transformation plan. Ethiopia economic development the policy of the ethiopian government is to create the conditions necessary for sustained economic growth. Effect of inflation on economic growth of ethiopia. The asia pacific economic cooperation council apec countries and economies are taken as examples here. World bank, world development indicators, in us dollar terms viii. Nov 10, 2010 ethiopia economic development the policy of the ethiopian government is to create the conditions necessary for sustained economic growth. Ethiopia s main challenges are sustaining its positive economic growth and accelerating poverty reduction, which both require significant progress in job creation as well as improved governance. The government aspires to an agricultureled industrialization and focuses its attention on food security, rural. This procedure is usually referred to as growth accounting. Effect of inflation on economic growth of ethiopia science. The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of ethiopia. There has also been tremendous growth in the number, diversity and market share of private businesses in the ethiopian economy.
Ethiopia aims to achieve middleincome economy as of 20202023 while. Road sector development and economic growth in ethiopia. Economic growth, development and poverty in ethiopia. Ethiopia a growth miracle ethiopia investment commission. This paper is the third of four papers related to pastoral economic growth and development in ethiopia that were commissioned by the department for international development dfid at the request of the government of ethiopia. Factors that determine the growth of micro and small. Since agriculture currently dominates ethiopia s economy and employment, however, there is an issue as to what its role should be in getting from here to there. Growth and development in ethiopia economics tutor2u. Their research investigations revealed that the key determinants that significantly affected the economic growth of ethiopia, as per their order of. Apr 12, 2017 this is a revision presentation on aspects of growth and development in the fastgrowing country of ethiopia. The assumption that there is a uniquely correct or at least a uniquely appropriate definition of economic growth, openly invites a very fundamental type of criticism. Ethiopia wants to join the ranks of emerging economies by 2025 with the support of this sector.
The next section presents economic growth of ethiopia and selected african countries. Greater economic growth is key to reducing poverty, the report notes. Ethiopia s growth miracle, coupled with its large population and significant land mass, has attracted. Ethiopia economy gdp, inflation, cpi and interest rate. However, there are also some other indirect factors, which affect the causal relationship between exports and economic growth.
This volume is a collection of selected empirical studies on determinants of economic growth and development in ethiopia. The core argument for editing this book is to provide an uptodate picture of the state and patterns of growth and development in ethiopia. Farmers have reacquired the economic freedom of price, of production, and of settlement. Economic development ethiopia issues, growth, economic. Ethiopia is a fascinating country to use as a case study in economic growth and development according to a recent editorial in the financial times, ethiopia has transformed in 20 years from a famineravaged nation into a destination for savvy and wellknown private equity groups such as kkr. The ethiopian road authority era investigated the link between the country. Sectoral economic growth and structural transformation in.
Productive capacity and economic growth in ethiopia the united. Ethiopia gdp annual growth rate 19812018 data 2019. The country has experienced fast economic growth in the last decade, averaging around 10% a year. The impact of human capital development on economic growth in. There are many ways in which the ethiopian economy can be applied to different areas of the a level economics course. In the past five years, ethiopia has experienced substantial growth in all three major economic sectors agriculture, industry and services. Economists and other social scientists jealously guard their right to define concepts as they see fit. Economic growth without structural transformation the case. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted. As a result, there is decreased or less investment in ethiopia, decreasing economic growth. The role of financial instituions in economic growth of ethiopia. Dbe development bank of ethiopia eal ethiopian airlines edri ethiopian development research institute.
Growth and transformation plan ii united nations in ethiopia. Productive capacity and economic growth in ethiopia 1 introduction ethiopia is one of the largest least developed countries ldcs in subsaharan africa, with a popula. Ethiopias economic growth performance african development bank. Pdf policy options for pastoral development in ethiopia. Ethiopia belongs to saa countries where poverty is widespread though the country has. Growing manufacturing industry in ethiopia case study.
Productive capacity and economic growth in ethiopia. The short term economic risks are felt to the economy through volatility and instability of foreign exchange earning which could have adverse macroeconomic effects on growth, employment, investment planning, import and. The various reports have been published in 2014 which indicate the economic development in the world. Time series data on real gross domestic product growth rate, external debt stock. It is time to see the performances and challenges of growth and transformation plan in ethiopia. The study generally indicated that there is a wellestablished nexus between the. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. Policies have the potential to alter not just the rate of. The impact of government expenditure on economic growth. The role of financial instituions in economic growth of. The major objective of gptii is to serve as a springboard towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broadbased, and inclusive economic growth, which accelerates economic transformation and the journey towards the country. Thus, gtp ii is primarily considered to be an important milestone towards. In developing countries like ethiopia economic growth is one of the preconditions for economic development.
Economic growth refers to the percentage change in the national output gross domestic product of the given economic. The relationship between government expenditure and economic growth has been an ongoing issue in debates on economic development. However, the contribution of the industrial sector to gdp, employment and exports remains low. The third section highlights the economic growth and development in the country. The government is devoting a high share of its budget to propoor programs and investments. Ethiopia s national development plans, including the current growth. A woreda environment management planning manual was prepared. Ethiopia has over the past decade achieved strong and robust economic growth coupled with the expansion of social services. The major objective of gtp ii is to serve as a spring board towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broad based and inclusive economic growth, which accelerates economic transformation and.
This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart, statistics, economic. Ethiopia has registered strong economic and social progress in the last decade the country achieved an average annual growth rate of 9. Ethiopia overview international development, poverty. Oct 26, 2017 the story of ethiopias incredible economic rise. Ethiopia economic growth growth is expected to moderate this year, although it will remain healthy on the back of robust household spending, sustained public infrastructure investment and upbeat fdi amid ongoing economic liberalization efforts. The report includes countryspecific threeyear forecasts for major macroeconomic indicators, including commodity and financial markets. Economic growth and development in ethiopia request pdf. Determinants and potentials of foreign trade in ethiopia.
Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. Pdf infrastructure development and economic growth in. Ethiopias national development plans place emphasis on promoting exportled industrialization with a focus on light manufacturing. The ethiopian government has developed comprehensive agricultural and economic development plans that have contributed to the countrys substantial growth in agriculture, industry and services. Contribution of ethiopia to the preparation of sdgs and. With sustained economic growth at levels predicted by the imf, the wider world will have to reappraise its view of a nation thats blazing a trail for economic development on the african continent. Growth and transformation plan gtp 201011201415 draft. Economic development transforms an economy from one that is largely agricultural to one that is largely manufacturing and services.
The celebrated wagners 1883 1958 law postulates that government spending is income elastic and that the ratio of government spending to income tends to grow with economic development. Pdf determinants of food security in the oromiya region of ethiopia. Ethiopia global economic prospects examines trends for the world economy and how they affect developing countries. It is over 15 years since the last national human development report for ethiopia was published and much has changed in the intervening period. Infrastructure development and economic growth in ethiopia. Ethiopias main challenges are sustaining its positive economic growth and accelerating poverty reduction, which both require significant progress in job creation as well as improved governance. Ethiopias strategy for sustaining the rapid and broadbased growth path hinges on the following pillars. Ethiopia economic outlook african development bank. Ethiopias steady economic growth leads to poverty reduction. Our mission in ethiopia works to advance an environment that supports increased private sector investment and growth.
The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of. Ethiopia is africas fastestgrowing economy world economic. Economic developments in ethiopia economic development shows the change in economic growth and at the same time change in the living standard of the people. Federal democratic republic of ethiopia growth and transformation. Pdf the study elucidates the mystery surrounding the belief that, infrastructure development induces economic growth. Selection of key themes for ethiopia developmental state via 5 year plans rapid industrialisation strategy key role of logistics infrastructure in growth building tourism around ethiopian airlines fragile state political unrest emergency rule o. The relationship between infrastructure development and economic growth is investigated for ethiopia during the. Ethiopia is now africas fastest growing economy cnn. This strong economic performance has given ethiopia an excellent platform from which to pursue its national development agenda. The major objective of gtp ii is to serve as a spring board towards realizing the national vision of becoming a low middleincome country by 2025, through sustaining the rapid, broad based and inclusive economic growth, which accelerates economic transformation and the journey towards the countrys renascence. Economic growth, particularly in agriculture, has been an important driver of. However, basic challenges such as unskilled labor, high transport costs. Sustainable development and poverty reduction program.
Ethiopian economic growth compared to sub saharan africa. The labor productivity hypothesis asserts that individuals who are healthier have higher returns to labor input. Ethiopia a view of the capital of ethiopia, addis ababa. The country is a net importer of fuel, which accounts for onefifth of goods imports. The third section explains the economic development in the country. Since economic development stages differ widely among apec countries, the examination will be a good test of how universally the balassasamuelson hypothesis may apply. I am pleased to present the 2014 national human development report, which has been written on the theme of accelerating inclusive growth for sustainable human development in ethiopia. I begin in section 2 by placing growth in ethiopia in its politico economic and historical contexts. I distinguish three successive policy regimes in the post1960 period and use growth accounting and crosscountry econometrics to characterize the. Strong economic growth therefore advances human development, which, in turn, promotes economic growth. Current efforts are directed towards sustaining doubledigit growth episodes by deepening struc.
Pdf infrastructure development and economic growth in ethiopia. The gtp recognizes that sustainable development in ethiopia can only be achieved if development is pursued in the social, economic and environmental areas in a balanced manner and ensuring that benefits accrued are equitably shared among the citizens of the country. Economic growth over the past years was accompanied by a reduction of unemployment, although it remained high. Factors that determine the growth of micro and small enterprises. Urban unemployment in the formal sector declined over the last decade, albeit slowly, and was reduced from 23 percent in 2004 to 17 percent in 2015. A decrease in economic growth decreases the amount of money that the government can spend on essential services, such as education, health, and infrastructure, hindering economic development in ethiopia. Ministry of finance and economic development mofed from csa website. The manufacturing sector is seen as the success of ethiopias growth, and its development to a large extent the product of an activist. While it provides a comprehensive picture of the state of economic development and growth in most parts of the continent, the main focus is on economic development and growth in ethiopia and. The impact of human capital development on economic growth in ethiopia. The impact, infrastruc ture development played on economic growth trajectory of a country is the center of debate in academia, research and policy circle. Ethiopias growth miracle, coupled with its large population and.
Ethiopias national development plans, including the current growth. Akshaya kumar mohanty abstract the study evaluates the impact of external debt on economic growth in ethiopia for the period 19812014. Growth and transformation plan ii gtp ii is ethiopia s fiveyear development plan for 20152020. Determining the effect of inflation on the economic growth of one country must be considered as a prior issue to build up a healthy economy. Economic developments in ethiopia economic development shows the change in economic growth and at the same time change in.
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