The World Bank's Ethiopia Economic Update launched yesterday (December 13th) states that Ethiopia has experienced strong and generally broad-based real economic growth of around 10.6% on average between 2004 and 2011.
According to the report the growth over the last nine years was far beyond the growth rates recorded in aggregate terms for Sub-Saharan Africa which amount to 5.2%, less than half of Ethiopia's average real GDP growth rate during the period.
The report indicates Ethiopia's growth is a number of factors, including the result of agricultural modernization, the development of the export sectors, strong global commodity demand, and government-led development investments. The growth over the last 5 years has lifted around 2.5 million citizens out of poverty, a decrease of over 9%. The report further estimates if inflation can be controlled, Ethiopia will be able to meet its Growth and Transformation Plan target to reduce poverty by another 7.4%. Guang Zhe Chen, World Bank Country Director for Ethiopia says the Government target to reduce poverty to 22.2 percent by 2014/15 "is ambitious but attainable." Inflation is on a decreasing trend, falling from 33 percent in 2011 to 15.8 percent in October 2012 (year on year).
The Report illustrates comparisons of Ethiopia's development experience with those of China and Korea. These suggest Ethiopia is well on track for its development. According to the Report, Ethiopia's fiscal performance appears to be adequate given the current state of the economy and financing requirements for development. Growth is estimated to likely stay around the current impressive margin until 2016. The launch of the Ethiopia Economic Update was complemented with the presentation of a Survey Report of Chinese Foreign Investment in Ethiopia.
At the request of the Government, the World Bank surveyed 69 Chinese enterprises doing business in Ethiopia and makes a number of recommendations to facilitate foreign investment. These include streamlining custom procedures and trade regulations, improving tax administration consistency and efficacy, and increasing the supply and quality of skilled workers. The World Bank, as part of its economic policy dialogue with the Government of Ethiopia, is now planning to release an Economic Update report for Ethiopia every six months.