Who could ever think that a country that was the third poorest country in the world would ever attract investors?
Yes, we are referring to Ethiopia; the statistics from this landlocked country in 2000 were not encouraging. It was the second-most populous country in Africa, and its annual GDP per capita was approximately $650. Besides, more than half of its citizens lived below the poverty line, and this is pathetic. The economic stagnation can be traced to the 1970s and 1980s when Mengistu Haile Mariamled the country into political turmoil. The country experienced several civil wars and famine which continued placing the country into more problems. The future began being bright from 1991 when political stability was restored and living standards rose.
There’s light at the end of the tunnel for Ethiopia; the economy is booming despite the political unrest occasionally experienced in the nation. There’s hope for investors and citizens of Ethiopia. IMF estimates that by 2022 the GDP per capita of Ethiopia would expand at a rate of 6.2%, what a miraculous rise!
Do you know that in 2016 Ethiopia was reported to be the third-fastest growing country with a population exceeding 10 million? According to the world bank data, in 2011 the poverty rate dropped to 31%. Since 2003, the economy of Ethiopia has been reported to grow rapidly.
Despite Ethiopia being a hub for economic growth, the country is facing the problem of rapid population growth. The United Nations projects that by 2050, the population would be 190 million and this is likely to hinder its growth. The poverty level is likely to increase as the population swells.
The agricultural sector contributes much to the economy of Ethiopia, and the world bank reported approximately 10.8% average annual growth between 2004 and 2014 in Ethiopia. Over the same period, agriculture contributed 3.6% while half of this was from services which included transportation and urbanization. When the agricultural sector is improved, it’s expected to deliver more for the country’s growth compared to other sectors. What more? The Center for Global Development projects that Ethiopia is likely to be the “New China” in Africa.
There are various challenges that Ethiopia faces, the main being ethnic favors done by those in government position. Ethnic clashes and deaths have been reported in Somalia with the most recent being the clashes between the ethnic Somalis and the Oromos.