A thesis submitted to the school of graduate studies of addis ababa university in partial fulfillment of the requirements for the degree of master of science in. Ethiopia is africas fastestgrowing economy for 2019. Sustainable development and poverty reduction program federal democratic republic of ethiopia fdre. He found that foreign aid contributed to economic growth between 1970 and 1980 in ldc. The role of financial instituions in economic growth of. The golden thread narrative of the uk government, which emphasises secure property rights as a key element of promoting economic growth and development. The population of ethiopia in 2019 was 112,078,730, a. Productive capacity and economic growth in ethiopia. The past, present, and future of economic growth dani rodrik 1.
According to the latest international monetary fund imf economic outlook for africa, ethiopia s economy is forecast to grow 8. This economic growth was higher than the average ssa economic growth. Introduction currently the objective of any developing country is to achieve sustainable economic. World bank national accounts data, and oecd national accounts data files. Moreover, the government of ethiopia is committed to rapid growth of agriculture as a means of accelerating the economic transformation and reducing poverty. Is the gdp growth rate over 7% expected in the current fiscal. Questions such as these define the field of economic growth. Its lack of diversity and technology pose a major risk for the country. Contextualizing ethiopias recent economic performance.
A contribution to the theory of economic growth authors. At the same time, once consideration is made of cognitive skills, the variations in the amount of tertiary education have no discernible impact on economic growth. As i have been reading and learning more about ethiopia s economy and preparing this address, there seem to be two important points on which there is broad agreement. Recent economic developments the ethiopian economy continued its strong expansion in fy14 with real gdp growing by 10. Under haile selassie i reigned 193074, ethiopias economy enjoyed a modicum of free enterprise. Ethiopia a view of the capital of ethiopia, addis ababa. The consequences for gdp growth will depend on the. Growth narrative to examine how economic, social and. The economy of ethiopia faces some major challenges that have prevented its continued steady growth. However, the banking, telecommunication and transportation sectors of the economy are dominated by governmentowned companies.
The performances and challenges of growth and transformation plan i in ethiopia. The political economy of growth in ethiopia chapter 4 of volume 2 alemayehu geda1 we are pleased to tell you that we have finally submitted the growth project manuscripts to cambridge university press. Wilson, geoff briscoe empirical analysis of human capital development and economic growth in european regions hiro izushi, robert huggins nonmaterial benefits of education, training and skills at a macro level andy green, john preston, lars erik malmberg. 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. The overall economic growth in the pta subregion has averaged 3. Economic development ethiopia issues, growth, economic. Ethiopia s location gives it strategic dominance as a jumping off point in the horn of africa, close to the middle east and its markets. Productive capacity is defined broadly as the natural resource potential, accumulation of human capital and the institutions that facilitate inclusive and sustainable economic growth. The causality analysis between export and economic growth. Ethiopia s reform agenda is expected to support growth that is projected to be slightly below or above 8% in the near term. Singh 1985 applied an ordinary least squares ols model to investigate the impact of foreign aid on economic growth.
Measuring growth a surprising find why the productivity boom. The government has recognized that the rapid growth of the ethiopian population is a major challenge to poverty alleviation. Economic reform incorporating private sector is expected to help the economy grow faster. For ethiopia, chinese finance provides critical support for the governments legitimacy, as electricity, transport, and employment opportunities continue to expand, stimulating economic growth and helping promote exports to. Gdp is positively related to initial human capital proxied by 1960.
Bordering eritrea, somalia, kenya, south sudan, and sudan, ethiopia is landlocked, and has been using neighboring djiboutis. Determinant of economic growth in case of ethiopia. The economy of ethiopia is a mixed and transition economy with a large public sector. Timeseries data for the period 1990 2011 were used to examine the impact of inflation on economic gro. Impacts of populaon growth on ethiopian development indicators. The country has experienced fast economic growth in the last decade, averaging around 10% a year. Ethiopia s economy is concentrated in the services and agriculture sectors.
Use the free adobe acrobat reader to view pdf files. And why are some countries so much richer than others. Levy 1988 investigated the impact of aid on economic growth in subsaharan african and concluded. For 98 countries in the period 19601985, the growth rate of real per capita. This study investigated the causal relationship between export and economic growth in ethiopia using quarterly data on real gdp and real export for the period 199798 201011 from national bank of ethiopia. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. The ethiopian economics association eea was established as a nonprofit making, nonpolitical and nonreligious. Ethiopia s new prime minister has promised to jumpstart serious economic. United nations projections are also included through the year 2100. Pincus 1998,2001,2002 further documents the critical role of mercantile interests. Development in ethiopia 1 a green bullet indicates that progress is strong and better than that of peers, a yellow bullet indicates that progress is positive but less than that of peers. The current population of ethiopia in 2020 is 114,963,588, a 2. The ethiopian economy has been characterized by erratic nature of output as the. Pdf infrastructure development and economic growth in.
Does foreign aid contribute to or impeded economic growth. The tenth annual conference focusing on the amhara regional state social and economic development was organized by eea in collaboration with its bahir dar chapter on november 30, 2019 at homeland hotel conference hall, bahir dar. Pdf in this paper, an attempt is made to study the external debt situation in ethiopia across its three economic regimes. This paper documents the facts that underlie these questions. This process also encompasses the nurturing modern entrepreneurial skills in the private sector and fostering innovation. Sources of inflation and economic growth in ethiopia. This registered growth is only a fraction above the population growth rate in the subregion. The past, present, and future of economic growth institute for. Overview of ethiopian economy this chapter presents economic growth history of ethiopia. Ethiopia economy gdp, inflation, cpi and interest rate. The government aspires to an agricultureled industrialization and focuses its attention on food security, rural savings, and labor formation. A genuine golden thread would tie together economic, social. Corruption and economic growth projects at harvard.
Ethiopia population growth rate 19502020 macrotrends. In its communication of march 2020 on the coordinated economic response to the. Several risks to growth prospects exist, among them. Ethiopia is also a significant market for chinese exports that will expand as ethiopia s rapid economic growth continues.
Agricultural output is lower than its full potential because traditional cultivation techniques dont allow for optimal efficiency. This section documents six stylized facts that are particularly relevant to the. Moreover the capital expenditure, direct tax and budget balance have positive relationship with economic growth in the long run. As discussed in chapter three a number of factors including investment, trade, economic policy, institution and many others affect economic performance of countries. Economic growth in a cross section of countries robert j. Chart and table of ethiopia population from 1950 to 2020. Ethiopia s growth has been inclusive in nature, spanning different level 1. The policy of the ethiopian government is to create the conditions necessary for sustained economic growth.
This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart, statistics, economic calendar and news. Once one starts to think about economic growth it is hard to. The production and export of cash crops such as coffee were advanced, and importsubstituting manufactures such as textiles and footwear were established. While these projections are lower than the gtp projections and o. Agriculture and the economic transformation of ethiopia. The government has been engaged in a major effort to transform ethiopian society and place the country on a trajectory to become a middleincome economy by the year 2025.
Introduction planning can be defined as a continuous process which involves decisions or choices, about. Over the last 25 years, ethiopia has made incredibly important development progress, underpinned by rapid economic growth. Economic growth depends on the domestic saving rate and the external. Introduction the last decade has been an extraordinarily good one for developing countries and their mostly poor citizensso good in fact that it has become commonplace to look upon them as potential saviors of the world economy. Ethiopia is now africas fastest growing economy cnn.
Ethiopia s growth miracle, coupled with its large population and significant land mass, has attracted. Ethiopias steady economic growth leads to poverty reduction. Despite the lower economic growth of ssa countries, it was characterized as irregularity which is not the case of ethiopia economic growth. Pdf determinant of economic growth in case of ethiopia. Economic growth brought with it positive trends in reducing poverty, in both urban and rural areas. The ethiopian government is in the process of privatizing many of the stateowned businesses and moving toward a market economy. Farmers have reacquired the economic freedom of price, of production, and of settlement. Growth was driven mainly by the services sector from the supply side and public investment from the demand side.
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