Jul 5, 2012

Ethiopia economic performance

Botswana has been a successful story in Africa, not without its critics. Ghana and Rwanda have made outstanding improvements in economic development. More recently there is discussion on the case of Ethiopia. 

A chart of the rates of growth of the country shows that Ethiopia has grown around 10 percent since 2004, in spite of recent reduction in foreign direct investment. 

According to this The Economist article Ethiopia is the front runner, non-oil economy, in the continent. The article however is critical:
Poverty is pervasive, raising questions over how fast a consumer class will emerge. Agriculture is still a big source of national income, accounting for more than 40% of GDP and more than 80% of employment. Almost all private businesses are small: family-owned vendors and repair shops, the kind whose customers cannot suffer inflation for long. Credit is hard to come by for the unconnected. Only licensed exporters consistently benefit from repeated devaluations of the currency. To invest in Ethiopia is to invest in the frontier.

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