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Ethiopia tops Kenya as the economic giant of East Africa

Recently Ethiopia has earned a positive fame for being one of the fastest growing country in the world. Confirming to this the International Monetary Fund (IMF) entitled Ethiopia as the new economic giant of East Africa topping the former economic giant Kenya. On the other hand the World Bank reported that Ethiopia’s economy will be the most expansive on the continent for 2017 followed by Tanzania, Ivory Coast and Senegal respectively.

Relative absence of corruption, inexpensive labour costs, financial incentives and lack of security risks render Ethiopia as a strategic market attracting several investors from all over the world says International Monetary Fund (IMF). Ethiopia welcomed pharmaceutical and agriculture companies from Asia, Middle East while Standard Bank announced the opening of the first representative office in the country. Agriculture, infrastructure, manufacturing and energy sectors continue to draw Ethiopia considerable international investment while investment on the service sector is growing attracting major international brands including Jumia Travel and Accorhotels.

In emerging markets and developing economies (EMDE) such as in Ethiopia and in Sub-Saharan Africa, a modest economic recovery is predicted in 2017. Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by the largest economies, which faced challenging macroeconomic conditions in 2016. In the emerging economies growth is going strong dominated by commodity exporters, investment growth and slowdown of imports. The growth become broad-based among energy, metals, and agricultural commodity exporters. Industrial production and manufacturing are also rising booming the continent economy. Growth in commodity exporters is expected to pick up from 0.4 percent in 2016 to 1.8 percent in 2017, and to reach 2.8 percent on average in 2018/19. The development is expected to be broad-based, with an acceleration of activity predicted in the majority of commodity exporters both in 2017 and in 2018 says the World Bank.

Economic activity remains solid in a number of diversified and non-resource intensive, economies such as Ethiopia, Indonesia, Malaysia, Costa Rica, Rwanda, Senegal, Sri Lanka and Tanzania due to the growth of investment. However, improvements needs to be sustainable for long term economic development according to the IMF. The forecast for growth in commodity importers remains stable, at an average of 5.7 percent in 2017/19. In low-income countries, growth picked up, as rising metals prices lift production in metals export. However, some low-income countries are still struggling with declining oil production, conflict, drought, and security and political challenges. On the other hand growth in low-income countries is expected to strengthen during 2017/19, as activity strengths in commodity exporters according to the latest World Bank report. This is an encouraging news for Ethiopia which is striving to become middle income country by 2025. Having a large asset of untapped human power the country status as the second most populated country next to Nigeria is contributing to the growth of the economy. Nevertheless the country has a long way to go to alleviate poverty and to achieve the long awaited development.
By Eden Sahle. She can be reached at eden.sahle@jumia.com  
Ethiopia tops Kenya as the economic giant of East Africa Ethiopia tops Kenya as the economic giant of East Africa Reviewed by IFEDAYO AKINWALERE on 11:18:00 am Rating: 5