The impact of human capital development on economic growth in. 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. Ethiopia is now africas fastest growing economy cnn. Federal democratic republic of ethiopia growth and transformation.
Ethiopia a growth miracle ethiopia investment commission. 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. Ethiopia economic outlook african development bank. Ethiopia aims to achieve middleincome economy as of 20202023 while. This procedure is usually referred to as growth accounting. 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 second section discusses the economic growth and poverty in ethiopia. The role of financial instituions in economic growth of. Apr 12, 2017 this is a revision presentation on aspects of growth and development in the fastgrowing country of ethiopia. Factors that determine the growth of micro and small enterprises.
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. Economic growth, particularly in agriculture, has been an important driver of. Ethiopia has over the past decade achieved strong and robust economic growth coupled with the expansion of social services. 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. Their research investigations revealed that the key determinants that significantly affected the economic growth of ethiopia, as per their order of. The role of financial instituions in economic growth of ethiopia. The third section highlights the economic growth and development in the country. As a result, there is decreased or less investment in ethiopia, decreasing economic growth. 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. Productive capacity and economic growth in ethiopia. Agriculture and the economic transformation of ethiopia. The relationship between infrastructure development and economic growth is investigated for ethiopia during the. Ethiopia s strategy for sustaining the rapid and broadbased growth path hinges on the following pillars.
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. Pdf the study elucidates the mystery surrounding the belief that, infrastructure development induces economic growth. Growth and development in ethiopia economics tutor2u. The country is a net importer of fuel, which accounts for onefifth of goods imports. 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. Oct 26, 2017 the story of ethiopias incredible economic rise. It is time to see the performances and challenges of growth and transformation plan in ethiopia. World bank, world development indicators, in us dollar terms viii. Economic growth refers to the percentage change in the national output gross domestic product of the given economic. Nov 10, 2010 ethiopia economic development the policy of the ethiopian government is to create the conditions necessary for sustained economic growth. In developing countries like ethiopia economic growth is one of the preconditions for economic development. 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.
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. Strong economic growth therefore advances human development, which, in turn, promotes economic growth. The government aspires to an agricultureled industrialization and focuses its attention on food security, rural. The next section presents economic growth of ethiopia and selected african countries. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted. 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. Economic growth and development in ethiopia springerlink. The government is devoting a high share of its budget to propoor programs and investments. However, there are also some other indirect factors, which affect the causal relationship between exports and economic growth.
It is over 15 years since the last national human development report for ethiopia was published and much has changed in the intervening period. Our mission in ethiopia works to advance an environment that supports increased private sector investment and growth. Economic growth without structural transformation the case. This volume is a collection of selected empirical studies on determinants of economic growth and development in ethiopia. Pdf infrastructure development and economic growth in. The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of ethiopia. The ethiopian government has developed comprehensive agricultural and economic development plans that have contributed to the countrys substantial growth in agriculture, industry and services. Effect of inflation on economic growth of ethiopia science. Ethiopia overview international development, poverty. This page provides ethiopia gdp annual growth rate actual values, historical data, forecast, chart, statistics, economic.
However, basic challenges such as unskilled labor, high transport costs. The third section explains the economic development in the country. Policies have the potential to alter not just the rate of. Productive capacity and economic growth in ethiopia the united. The impact of government expenditure on economic growth. There are many ways in which the ethiopian economy can be applied to different areas of the a level economics course. Pdf policy options for pastoral development in ethiopia. 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. The various reports have been published in 2014 which indicate the economic development in the world. The main objective of this paper is to test that, whether inflation is an indicator or obstacle for economic growth of. The ethiopian road authority era investigated the link between the country.
Ethiopia wants to join the ranks of emerging economies by 2025 with the support of this sector. Current efforts are directed towards sustaining doubledigit growth episodes by deepening struc. Economic development transforms an economy from one that is largely agricultural to one that is largely manufacturing and services. 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 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. Ethiopia belongs to saa countries where poverty is widespread though the country has. Time series data on real gross domestic product growth rate, external debt stock. Ethiopia global economic prospects examines trends for the world economy and how they affect developing countries. Economic growth, development and poverty in ethiopia. Ethiopian economic growth compared to sub saharan africa. The study generally indicated that there is a wellestablished nexus between the. Economic growth and development in ethiopia request pdf.
Dbe development bank of ethiopia eal ethiopian airlines edri ethiopian development research institute. Infrastructure development and economic growth in ethiopia. Ethiopia s national development plans, including the current growth. Economic development ethiopia issues, growth, economic. Pdf determinants of food security in the oromiya region of ethiopia. Ethiopia real gdp growth annual % ethiopia real gdp per capita growth annual %. Ethiopia economy gdp, inflation, cpi and interest rate. Ethiopia a view of the capital of ethiopia, addis ababa. The ethiopian economy has experienced impressive growth performance.
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. The impact of human capital development on economic growth in ethiopia. Factors that determine the growth of micro and small. Growth should benefit from the homegrown economic reform program, which seeks to address macroeconomic imbalances and unlock structural. The labor productivity hypothesis asserts that individuals who are healthier have higher returns to labor input. Ethiopias national development plans place emphasis on promoting exportled industrialization with a focus on light manufacturing. The asia pacific economic cooperation council apec countries and economies are taken as examples here. Effect of inflation on economic growth of ethiopia. Farmers have reacquired the economic freedom of price, of production, and of settlement. Pdf infrastructure development and economic growth in ethiopia. Since economic development stages differ widely among apec countries, the examination will be a good test of how universally the balassasamuelson hypothesis may apply. Economists and other social scientists jealously guard their right to define concepts as they see fit.
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. Contribution of ethiopia to the preparation of sdgs and. Determinants and potentials of foreign trade in ethiopia. Growth and transformation plan ii united nations in ethiopia. Ethiopias steady economic growth leads to poverty reduction. The country has experienced fast economic growth in the last decade, averaging around 10% a year. Ethiopias growth miracle, coupled with its large population and. The interaction between growth and inflation is one of the macroeconomic problems. However, the contribution of the industrial sector to gdp, employment and exports remains low. 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. 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. 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.
The role of health in economic development is analyzed via two channels. Economic developments in ethiopia economic development shows the change in economic growth and at the same time change in. In the past five years, ethiopia has experienced substantial growth in all three major economic sectors agriculture, industry and services. Thus, gtp ii is primarily considered to be an important milestone towards.
Ethiopia economic development the policy of the ethiopian government is to create the conditions necessary for sustained economic growth. 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. Growing manufacturing industry in ethiopia case study. There has also been tremendous growth in the number, diversity and market share of private businesses in the ethiopian economy. Akshaya kumar mohanty abstract the study evaluates the impact of external debt on economic growth in ethiopia for the period 19812014. Ethiopia s growth miracle, coupled with its large population and significant land mass, has attracted. 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. Ethiopias economic growth performance african development bank. Sustainable development and poverty reduction program. Ethiopias national development plans, including the current 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 core argument for editing this book is to provide an uptodate picture of the state and patterns of growth and development 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. The report includes countryspecific threeyear forecasts for major macroeconomic indicators, including commodity and financial markets. Ethiopia has registered strong economic and social progress in the last decade the country achieved an average annual growth rate of 9.
Ethiopia gdp annual growth rate 19812018 data 2019. Ethiopia growth and transformation plan ii gtp ii green. 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. The recent fall in global oil prices is expected to have a positive economic impact on ethiopia. I distinguish three successive policy regimes in the post1960 period and use growth accounting and crosscountry econometrics to characterize the. Growth and transformation plan ii gtp ii is ethiopia s fiveyear development plan for 20152020. Road sector development and economic growth in ethiopia. 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 ethiopias development trajectory. Ethiopias strategy for sustaining the rapid and broadbased growth path hinges on the following pillars.
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 economic outlook is positive, and real gdp growth is projected to stabilize at 7. 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. 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. Growth and transformation plan gtp 201011201415 draft. Greater economic growth is key to reducing poverty, the report notes. 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. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. I begin in section 2 by placing growth in ethiopia in its politico economic and historical contexts. Ministry of finance and economic development mofed from csa website. Sectoral economic growth and structural transformation in.
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