According to Trading Economics global macro models and analysts, Ethiopia’s GDP is predicted to reach 110.00 USD billion by the end of 2021. According to our econometric models, Ethiopia’s GDP will trend around 112.00 USD billion in 2022 and 115.00 USD billion in 2023 in the long run.
What accounts for Ethiopia’s low GDP?
Because to the COVID19 epidemic, Ethiopia’s economy increased by 6.1 percent in 2020, down from 8.4 percent in 2019. The services and industry sectors led growth, but the hospitality, transportation, and communications sectors were negatively impacted by the epidemic and the resulting containment measures to prevent the virus from spreading. The fiscal deficit, including grants, grew marginally in 2020, with treasury bills providing the majority of the funding. Tax revenue climbed by 16 percent, but the tax-to-GDP ratio fell to 9.2 percent in 2020 from 10% in 2019 due to delayed tax reform implementation. In keeping with the country’s fiscal austerity agenda, total public spending remained constant. Due to pandemic-related supply chain delays and expansionary monetary policy, inflation in 2020 reached 20.6 percent, significantly over the objective of 8%. The official exchange rate was depreciated by nearly 8% in November 2020, to 35.0 birr per US dollar. In 2020, export revenues climbed by 12% as gold, flowers, coffee, and chat exports increased while imports fell by 8.1 percent. The current account deficit was reduced from 5.3 percent in 2019 to 4.4 percent in 2020 as a result of this. Exports of services fell by around 6%, owing primarily to decreasing revenue from Ethiopian Airlines. Personal remittances plummeted 10% to 5.3 percent of GDP, while foreign direct investment (FDI) dropped 20% to 2.2 percent of GDP. Poverty is expected to decrease from 23.5 percent in 2016 to 19 percent by 2020. However, pandemic-related job losses of up to 2.5 million people will stymie poverty reduction efforts.
The resolution of the COVID19 crisis, the pace of economic recovery, and other shocks like as civil war and climate change all influence the medium-term economic prospects. Real GDP growth is expected to drop to 2% in 2021, before recovering to around 8% in 2022, thanks to a comeback in industry and services. In response to the government’s funding needs, monetary policy is projected to remain flexible. Increased open-market operations are predicted to gradually lower inflation. Due to COVID19, tax policy reforms are expected to be delayed, causing the budget deficit to rise. As service exports steadily improve, the current account is expected to decline in 2021 before rebounding in 2022. Low investor confidence, owing in part to intermittent local conflicts, global growth weakness, and climate change, are the main adverse threats to the economy’s future.
Given Ethiopia’s massive physical and social infrastructure demands and low tax-to-GDP ratio, which averaged 10% from 2017 to 2020, the country’s finance needs are significant. The primary deficit, including debt service, is anticipated to be approximately 4% of GDP. Total state debt was around 57 percent of GDP in June 2020, with somewhat more than half of that being external. Due to poor export performance combined with rising import-intensive state infrastructure spending, Ethiopia has been classed as being at high risk of public debt crisis since 2017. The net present value of debt-to-exports was calculated at 247.6 percent and debt service-to-exports was projected at 24.6 percent in the International Monetary Fund’s 2019 debt sustainability analysis; the greatest sustainable levels are 180 percent and 15 percent, respectively. Ethiopia benefited from the G20 Debt Service Suspension Initiative, and the government is implementing debt-containment measures as part of the so-called Home-Grown Economic Reform agenda, which includes fiscal consolidation, expanding public financing sources, a moratorium on nonconcessional borrowing, leveraging grants and concessional loans, and debt restructuring. In 2020, gross reserves were $3.1 billion, or 2.5 months’ worth of imports, and are unlikely to provide an alternative source of development funding in the near term. Expansion of public debt in the face of substantial public spending demands could constrain fiscal flexibility and expose the government to repayment difficulties, especially since $1 billion in eurobonds mature in December 2024. To improve the efficiency of government spending, more reforms in public finance and investment management are required.
Is Ethiopia a poor or wealthy country?
Ethiopia’s strategic location as a launching pad in the Horn of Africa, near to the Middle East and its markets, provides it strategic superiority. Ethiopia is a landlocked country that shares borders with Eritrea, Somalia, Kenya, South Sudan, and Sudan, and has relied on Djibouti’s main port for international trade for the past two decades. With the recent Eritrean peace accord, Ethiopia is expected to regain access to the Eritrean ports of Assab and Massawa as well.
Ethiopia is Africa’s second most populous country after Nigeria, with 115 million inhabitants (2020), and the region’s fastest-growing economy, with 6.1 percent growth in FY2019/20. It is, nevertheless, one of the poorest, with a gross national income per capita of $890. By 2025, Ethiopia wants to be classified as a lower-middle-income country.
Ethiopia has been one of the world’s fastest growing countries over the past 15 years (at an average of 10 percent per year). Capital accumulation, particularly through public infrastructure projects, was a major driver of growth, among other things. Due to COVID-19, Ethiopia’s real GDP growth slowed in FY2019/20 and even more in FY20220/21, with growth in industry and services falling to single digits. Agriculture, which employs more than 70% of the population, was unaffected by the COVID-19 epidemic, and its contribution to growth improved marginally in FY2019/20 compared to the previous year.
Between 2010 and 2020, persistent strong economic growth led in positive trends in poverty reduction in both urban and rural areas. The percentage of the people living in poverty has reduced from 30% in 2011 to 24% in 2016, and human development indicators have improved over time. Despite this, many flaws remain. Inequality is on the rise, owing to the growing discrepancy between urban and rural areas. The bottom 10% of the population has not grown in terms of consumption (as of 2005), notably in rural areas, and inequality is on the rise. Furthermore, COVID-19 has exacerbated existing flaws.
The government has unveiled a new 10-year development plan that will run from 2020/21 through 2029/30 and is based on the 2019 Home-Grown Economic Reform Agenda. The plan intends to maintain the phenomenal growth achieved during the preceding decade’s Growth and Transformation Plans while easing the transition to a more private-sector-driven economy.
Ethiopia’s key problems include maintaining positive economic growth and accelerating poverty reduction, both of which necessitate significant progress in job creation and stronger governance to guarantee that growth is equitable across the country. The government spends a large portion of its budget on anti-poverty initiatives and investments. Large-scale donor financing will continue to play an important role in funding pro-poor activities in the near future. The following are some of the most significant challenges:
- Ethiopia, like the rest of the world, has been hit hard by the COVID-19 pandemic’s catastrophic social and economic consequences. While exports and foreign direct investment have recovered in 2020/21, and jobs have recovered, there are likely to be some long-term scars. Urban employment has not entirely recovered, some people and businesses continue to report income losses, and poverty levels are projected to have risen.
- The battle, which began in November 2020, is expected to have an impact on agriculture productivity and food security in the country’s north, as well as stymie economic recovery.
- Ethiopia’s Human Development Index is 0.38, implying that a kid born today in Ethiopia will be 38 percent as productive as if he or she had access to a complete education and good health. This is lower than the Sub-Saharan Africa average, but slightly higher than the low-income country average. Learning poverty affects 90% of children under the age of five, and 37% of children under the age of five are stunted.
- Ethiopia has been dealing with the largest locust invasion in decades since 2020. This might jeopardize Ethiopia’s development progress and jeopardize millions of Ethiopians’ food security and livelihoods.
- A nascent private sector whose ability to grow and create jobs has been hampered by business climate and competitiveness concerns.
- The growing workforce (roughly 2 million per year) puts strain on the labor market’s absorption capacity, necessitating job improvement while also providing enough new jobs.
In Ethiopia, which region is the most prosperous?
The Amhara Highlands, according to Ethiopia’s government website, get 80% of the country’s total annual rainfall and are the country’s most fertile and climatically favorable region. The Blue Nile originates at Bahir Dar, in the Amhara Region’s Lake Tana. When the Blue Nile’s flow reaches its peak (during the rainy season from June to September), it supplies roughly two-thirds of the Nile’s water. Until the Aswan High Dam was completed in Egypt in 1970, the Blue Nile, along with the Atbara River to its north (which also flows out of the Ethiopian Highlands), caused annual Nile floods that contributed to the Nile Valley’s fertility, allowing the rise of ancient Egyptian civilization and, in turn, the development of Egyptian mythology.
Is Ethiopia Africa’s richest country?
- Nigeria: You’ve probably heard speeches or read stories in which Nigeria was referred to as Africa’s largest economy. That’s primarily due to the magnitude of its GDP. Nigeria has Africa’s biggest GDP, estimated to be $514.05 billion in 2021.
- Egypt: This North African country boasts Africa’s second-largest GDP. It has the biggest GDP in North Africa, $394.28 billion, and is one of just three countries from the region in the top 10.
- South Africa: With a GDP of $329.53 billion, this country in Southern Africa is third on the list. South Africa is one of just two Southern African countries to be included on the list.
- Algeria is the second Northern African country to appear on this list. Algeria has the fourth largest GDP in Africa, according to Statista, with $151.56 billion.
- Kenya has a GDP of $106.04 billion and is located in East Africa. It is the only country from Eastern Africa that has made the top 10 list.
- Ethiopia is the only country from the Horn of Africa to appear on this list. According to Statista, the country’s GDP is $93.97 billion dollars.
- Ghana is the second-largest economy in West Africa, with a GDP of $74.26 billion dollars.
- Ivory Coast: With a GDP of $70.99 billion, this francophone West African country ranks eighth in Africa.
Vocational and technical
schools (for example, institutes that train home economists and teachers)
training institutions) to help families integrate more quickly.
collaborating with current social services, especially in the area of health.
iii) Onthejob training
It will be organized for teachers and other development agents.
Education, Information, and
Communication (IEC) about population and development issues is important.
a critical role in raising public awareness of the population issue
and growth, as well as facilitating community involvement in the execution
a variety of programs The successful implementation of a well-designed lEC program
asks for the use of all available institutional and personnel resources
resources directly or indirectly involved in the population and development sphere
information about development The IEC’s policy will be focused on formulating
a set of policies and programs that will allow you to:
I A broader and more methodical approach
Using multimedia channels to make population IEC easier to use
In terms of accelerating behavioral change in relation to family size and reproductive health,
Personal and environmental behavior, reproductive health, family nutrition
hygiene;
ii) Dissemination of information
Information about the population is available through community organizations, and there is a lot of interest in it.
NGOs, adult education, women’s and youth’s organisations, political bodies
courses, factories, and other workplaces where there is a considerable number of people
a concentration of workers, for example;
iii) The application of
Topics in population and family life education as fundamental components of formal education
curriculum for education at all levels of schooling;
iv) The application of
issues relating to the population in the information package delivered to the
Agricultural extension workers work with the rural populace, and there is an informal community.
leaders, and other practitioners of community development;
v) The fortification of the
capacity of relevant government’s population and women’s affairs units
IEC programs are created and disseminated by development agencies.
MECHANISMS OF ORGANIZATION
FOR THE PURPOSE OF IMPLEMENTING THE POPULATION POLICY
The population’s anxiety is palpable.
practically every aspect of people’s economic and social lives. Given the situation,
the scale and complexity of our country’s developmental challenges,
Justifying the implementation of a population program is no longer logical.
Only for the sake of health. The varied nature of population policy justifies it.
All elements of economic and social life are affected. Population/demographic
Factors must be seen as both determinants and outcomes of the situation.
economic and social development level Such an understanding of the scope
and the significance of the population’s role in nation-building initiatives
the type of organizational structure required for successful implementation
policies that apply to it
The population of this country is
Prior to now, things have been given a low priority. The current point of view
that demographic factors influence every element of economic and social life
Life necessitates that population policy be managed in this manner.
that all key economic and social sectors are treated equally
It has benefited from it.
Given the difficulties,
expected to arise in the process of securing inter-agency coordination
by appointing a single ministry as the coordinating agency for
The most successful structural alternative, strategically, is population.
To put it another way, the best way to implement this policy is to think of it as a one-of-a-kind situation.
Section in the Prime Minister’s Office This entails two steps, namely,
the formation of a National Population Council (NPC), which will be chaired by
by the Prime Minister or a senior official of his choosing, and
Within the Prime Minister’s Office, there is a Population Office.
Activities of the population in
This nation will be done in accordance with the general guidelines established by
this strategy, as well as the technical and programmatic guidelines that will be created
in consultation with the NPC, by the Office of Population.
Programme implementation
occurs at the grass-roots level, implying a close association
between the Office of Population and other organizations with similar responsibilities
It is critical at the regional, zonal, and wereda levels. It is equally crucial.
that at the onset, a well defined division of labor be indicated, and
Once a decision has been made, it must be followed.
Addis Ababa University (to be established)
a demographer, sociologist, or geographic representative)
Regional Administrator’s Chief
The Prime Minister’s Office’s Affairs Sector
Membership is restricted.
The need to report to the National Council is dictated by the need for efficiency.
as well as the necessity of establishing a platform for those who are more closely involved
in the program’s various aspects. Larger groups of people who are interested, on the other hand,
From time to time, people from the various regions will be brought together to discuss various issues.
basic program implementation issues and provide recommendations
about how things could be fixed The demand for a larger number of people to participate
Participation of the general public in program administration will be enhanced.
in the process of evaluating a program In addition, to connect the activities
of the NPC and the Office of Population with a wide range of government agencies
and nongovernmental organizations working in the fields of population and development
Such bodies shall be convened in a consultative manner at all levels.
at least once a year, and whenever the need arises, to deliberate and plan
advising the government on how to make implementation easier
processes.
The National Population Council is a non-profit organization that promotes population
Shall be accountable to the Council of Ministers for the following:
I Creating policies that are specific to the situation
and population and development-related projects to be implemented
in many sectors of the economy, as well as establishing favorable conditions
to cross-sectoral cooperation;
ii) Establishing a broad legal definition
information about population and development within a framework (IEC)
are to be made available to the general public by various government agencies
and non-governmental organizations;
iii) Examining short, medium, and long documents
… long-term action programs that will result in a considerable reduction in the
current high level of fertility as quickly as feasible, and advising others to do the same
for government adoption;
The Population Office is a government agency that deals with population issues.
will be made up of a group of experts in various aspects of population.
actions without which the goal of economic harmonization would be impossible to achieve.
It is impossible to address socioeconomic and demographic concerns. The place of business will be
It is led by a member of the Prime Minister’s staff with the status of
Minister, who will report directly to the Prime Minister and who will
can work well with people with varying levels of knowledge and must be vested
has sufficient authority to enable him/her to carry out a successful program
Through its enforcement and coordination efforts on behalf of the Council,
chairman. A multisectoral team will provide technical support to the Office.
a committee whose members will come from a wide range of organizations
………………………
(ii) Providing direction for growth
as well as the articulation of operational programs in the sphere of population and development
actions that are connected;
(iii) Organizing and coordinating the actions
of the various sectoral agencies (both public and private)
at various administrative levels, carrying out population and development-related duties
levels;
(v) Advancing policyoriented initiatives
population and development research program at the national level;
(vi) Ensuring that the programs are up to date
Various ministries and other entities conduct surveys to ensure that the population’s needs are met.
policy and guidelines of the Council;
(vii) Creating a multisectoral environment
As needed, a technical committee and special task teams will be formed to assist with the project.
Policy execution that is effective;
viii)Organization and transportation
conferences, symposia, seminars, and other national and international events
on population difficulties, etc.)
(ix) Ensuring that intersectoral cooperation is maintained.
By establishing a population-related program, it is possible to efficiently coordinate population-related activities.
a reliable system for exchanging information;
(x) Assisting in the efficient
existing family planning service delivery institutions are operational;
(xi) Conducive conditions
This will encourage the development of domestic manufacturing capabilities.
a wide range of contraceptives;
(xii) Conducive conditions
This will encourage the development of domestic manufacturing capabilities.
and the provision of resources and equipment to make it easier for others to get involved
to data on population and development;
(xiii)Establishing an efficient system
collaboration with international organizations such as the World Bank,
the African Development Bank, the UN Population Fund, and other organizations
for the objective of enabling the mobilization of technical resources
as well as material resources that will be effective in achieving the goal;
(xiv)Ensuring a seamless transition
ensuring the proper operation of existing demographic data mobilization systems, as well as establishing
new ones, such as the creation of national registration systems
births, marriages, deaths, and changes of address, among other things;
(xv) Improving domestic security
capability for research and concerns related to demographics and population by
internal and external resource mobilization
(xvi)Strengthening the national defense
through facilitating mobilization, capability for training demographic people
of both technical and financial resources
The National Museum’s structure
The national level will be duplicated all the way down to the regional and zonal levels.
There will be a Regional Population Council (RPC) chaired by the Prime Minister.
The region’s chief executive officer or his representative. Members of the group
the following:
Chairman of the Regional Commission
Ethiopian branch of the Ethiopian Family Guidance Association
The Regional Council will take action.
be supported by a secretariat housed in the Chief Executive’s Office
of the area. While the staffing arrangement is impossible to duplicate,
Efforts must be made at the national level to staff the regional secretariat.
with the necessary staff The regional secretariat’s size and composition
must be proportional to the size and complexity of the activities to be completed
The RPC will be in charge.
through the Chief executive officer to the National Population Council
for the following:
I Identifying the significance
of population-related objectives, goals, and strategies, as well as ensuring that
Goals, objectives, and strategies are established by taking into account the current situation.
the Region’s and its subdivisions’ socioeconomic realities;
iv) Recognize unmet needs
in the realm of population-related activities and services, as well as mobilization
for the objective of bolstering existing regional and zonal resources
services, as well as developing new ones when none exist;
iii) Publication of guidelines on
a variety of funding options for family planning services;
iv) Obtaining advice from the Office
in terms of legislative and administrative steps to be taken by the Ministry of Population
taken at the regional level to increase the effectiveness of service delivery
to the inhabitants of the various regions;
v) Reporting on a regular basis
to the National Population Council’s Secretariat
ii) Organizing and coordinating activities
of the various sectoral agencies (both public and private)
at the regional level, carrying out population and development-related activities
and at the zonal level;
iv) Regional promotion
concentrating policy-relevant research and doing population research
and advancement;
v) Creating a technology infrastructure
committees as needed for the population’s proper implementation
policy at the regional scale;
v) Information dissemination
as well as providing zonal governments with population-related advice and technical assistance
Office(s) of Population;
vii) Planning and executing
Organize regional events on population issues;
viii) Actively participating
in the gathering of population and development data;
x) Participating in such activities
as the Office of Population at the national level may demand.
A Zonal Population will exist.
Advisory Council (ZPC). The Chief Executive Officer will head the ZPC.
Zonal administration is a term used to describe a group of people who work together to The ZPC will be made up of representatives.
Planning, Education, Health, and Labor are among the ministries/agencies in charge.
and Social and Women’s Issues, as well as Natural Resources and Environmental Issues
At the zonal level, there is protection. There will also be a population zonal office.
shall be led by a senior officer chosen by the head of the department
who will be a member of the zonal administration as well as the ZPC
The Population Council of the Zonal Zones
The Regional Population Council will be responsible for the following:
I Ensuring that guidelines are followed
for the setup and efficient operation of a registration system
of life’s most important eventsmarriage, birth, death, and migrationacross the globe
The zone adheres to the ideas and formats established by the
Council on Population and Development;
ii) Setting up a system
for the systematic collection of population statistics and related information, including
in accordance with principles, people who are unemployed or underemployed
The National Population Council established and offered guidelines;
iii) Setting up the environment
that will encourage and increase community engagement in population planning
as well as related activities
v) Performing a variety of other tasks
The National Population Council may require it to do so.
ii) Organizing and supervising
and keeping track of all population-related and development-related activities in the country
Zone;
iii) Providing assistance and facilitation
the gathering and reporting of demographic and development data
to the population office of the region;
iv) Ensuring that the populace is healthy
associated service providers keep track of their performance in accordance with
The National Population Council has defined the following formats:
vi) Assuring that the various
Compliance is ensured by zonal bureau representatives and Wereda Committees.
in program management with the National Population Policy;
viii) Information exchange
as well as providing wereda with population-related advice and technical help
units of population;
ix) Planning and transporting
public activities on population concerns (seminars, workshops, etc.) at the
Wereda and zonal levels;
xi) Performing a variety of additional tasks
tasks as the regional and zonal councils may require
At this point in the process,
It’s difficult, if not impossible, to imagine specialized services outside of the country.
At the Wereda, there are no structural arrangements of any significance.
primarily because to the challenges that are likely to be experienced in
at this level, deploying the needed technological expertise Chief, on the other hand
Executive officers at the wereda level may use wereda committees to carry out their duties.
based on population
The Wereda Committees are responsible for
be accountable to the Legislative Council of Wenda and the Chief Executive
official of the Wereda in charge of:
I Enforcing legislation relating to
establishing population registration systems on a wereda-by-wereda basis
and guaranteeing their proper operation;
ii) Obtaining willing participation
Participation and assistance from the community in population and development issues
activities;
iii) Putting in place procedures
by which they carry out the tasks that have been allocated to them;
iv) Obtaining such technical knowledge
as well as financial and material resources from both government
Ethiopia’s political situation is stable.
Ethiopia’s 2018 transition failed to bring the country back to normalcy. Instead, periodic ethnic and political bloodshed has driven the country to its knees since then. And the government’s battle with the Tigray People’s Liberation Front (TPLF) in the north, which began in November 2020, has thrown the country into even more chaos.
Why is Ethiopian development lacking?
Ethiopia has a 44 percent poverty rate, and many Ethiopians live in dangerous conditions. Some of the dwellings in the country are made of cardboard. Others are composed of rope, sticks, mud, and other materials, causing occupants to have terrible hygiene. Many homes are built without windows, which can trap dangerous pollutants within. Why is Ethiopia so poor, you might wonder?
Ethiopian farms are suffering from a shortage of rainwater due to droughts and other natural disasters. Famines occur, and crops suffer tremendously as a result. Food and fertilizer prices in Ethiopia are also rising, leaving many Ethiopians unable to purchase these necessities. This is especially troublesome given the fact that agriculture provides economic stability to 80% of Ethiopians.
Ethiopia’s poverty is exacerbated by a lack of infrastructure and basic amenities such as safe drinking water, education, and healthcare. Malaria, HIV, and other ailments kill many Ethiopians who work to support their families. More Ethiopian families could be able to climb above poverty if more Ethiopians have access to healthcare and other essential services.
Women-headed Ethiopian families are more vulnerable to poverty. Many Ethiopian mothers do not participate in awareness campaigns, and as a result, many of their infants are malnourished, lack literacy skills, and die. If more Ethiopian women and other underprivileged groups in the country participated in awareness campaigns, this problem may be prevented.
Why is Ethiopia so impoverished? Human rights violations have harmed Ethiopia’s poor, even if some were committed with the intention of strengthening the country’s economy. According to Obang Metho, executive director of the Solidarity Movement for a New Ethiopia, “progress is not as durable when a society is not free.”
There is reason to believe that Ethiopia’s economy would improve. Ethiopia has had a ten percent economic growth rate for more than a decade, putting the country on track to reach the United Nations’ development goals. Ethiopia’s government hopes to achieve a middle-income status by 2025.
In 2000, Ethiopia’s poverty rate was 44%, but by 2011 it had reduced to 30%. One of the primary causes of this shift was the expansion of agriculture. If such a transformation occurred again, it might be beneficial to Ethiopians now. Since 2000, education, household health, and living standards have all improved steadily.
Why is Ethiopia so impoverished? To grow its economy, Ethiopia should retain a focus on agricultural development. Promoting farm expansion and assisting households in overcoming migratory barriers could also help Ethiopians achieve financial stability. While safety net initiatives have proven to be beneficial, they must continue to adapt to Ethiopia’s fluctuating poverty levels.