AFRICANGLOBE – The World Bank Report says “Ethiopia has experienced strong and generally broad-based real economic growth of around 10.6% on average” between the years 2004 – 2011, double the African average growth rate.
The report launched by The World Bank on Thursday in Addis Ababa has a detail assessment of the nation’s economy in the sated period.
“The growth over the last nine years,” it read, “was far beyond the growth rates recorded in aggregate terms for Africa which is 5.2%, less than half of Ethiopia’s average real GDP growth rate during that period.”
The report indicates Ethiopia’s growth appears to have been inspired by the East Asian experiences namely countries like China, Korea and Taiwan.
The growth is reported to have been induced through a mix of factors: agricultural modernization, development of the export sector, strong global commodity demand, and government-led development investments, among others.
Ethiopia to Continue Growing
According to the report, growth is estimated to stay around that remarkable margin until 2016.
The growth over the last 5 years has lifted about 2.5 million citizens out of poverty, which is a 9.1% decrease. The report further estimates if inflation kept tamed Ethiopia can make its target of the Growth and Transformation Plan (GTP) to reduce the poverty by another 7.4%.
The Report appreciates the country’s strategy of increasing exports to facilitate growth as it is the development pattern of recently successful countries, particularly in East Asia.
Ethiopian goods exports showed growth of 14.8% in 2011/12. Export of goods growth, it says is to a good extent driven by volume growth across a variety of product groups, which is the result of recent efforts to increase and diversify the export base.
However, the increase in annual goods imports by 33.5% in 2011/12 alone indicates overall export and import developments result in a significantly increased trade deficit which is 7.9 billion US Dollars in 2010/11.
The World Bank Report shows interesting comparisons of Ethiopian development experience to China and Korea which depicts Ethiopia is well on track. Yet the nation has to significantly boost its domestic saving and exports performance while bringing inflation down to a single digit is also underscored.
According to the Report, Ethiopia’s fiscal performance appears to be adequate given the current state of the economy and financing requirements for development.
The Bank’s Report suggests key to success for the GTP is to find a way to sustain the high financing requirements as well as giving attention to high public investment and attracting more private domestic and foreign sources.