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African Review of Economics and Finance

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Ethiopia’s Investment Prospects: A Sectoral Overview*

H Assefa, D Bienen, D Ciuriak

Abstract


Ethiopia is in the midst of a sustained growth surge that is becoming increasingly broadbased, building on major improvements in educational attainment, improved health outcomes, and infrastructure capacity in terms of access to power, transportation and telecommunications. The Government’s Growth and Transformation Plan sets ambitious targets for further improvements in these areas, together with significant reforms aiming to improve trade logistics, by rolling-out the authorized economic operator program across export-oriented industry parks and improving the main export corridor to Djibouti. This industrialization push coincides with global trends that provide Ethiopia an opportunity to integrate its economy into the modern “Made in the World” production system, including by attracting labor-intensive production, which is leaving China and other East Asian economies due to their rising wage rates. This paper considers Ethiopia’s prospects to succeed in this endeavor. It reviews overall economic management and performance indicators and provides a horizontal overview of the investment framework. It then summarizes the investment prospects in several major sectors of the economy, in light of Ethiopia’s emerging capacities and global developments: agriculture, mining, oil & gas, economic infrastructure, manufacturing, and selected services, including health and tourism.

Keywords: Ethiopia, investment, growth and transformation plan



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