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Ethiopia on its way towards building middle income economyMonday, August 24, 2015 > 12:40:03
Ethiopia is on the right track to realize its goal of becoming a middle income economy by 2025, since its economy is expected to expand at 11 percent in average during the coming five years, an official said.
In an exclusive interview with ENA, National Planning Deputy Commissioner Getachew Adem said Ethiopia has a strong growth outlook, with a projected GDP growth of 11 percent during the second Growth and Transformation Plan period.
Ethiopia is amongst the fastest growing non-oil economies in the world. From the fastest growing economies in Sub-Saharan Africa, Ethiopia is the only country in which its growth is driven by other that oil.
Among the Sub Saharan countries, Angola, Ethiopia, Ghana, Nigeria and South Africa accounted for 41 percent of the region’s population and 71 percent of GDP in 2013. Sub-Saharan economies carry on registering impressive growth rates of close to 5 percent in 2013.
“Four of the five, with the exception of Ethiopia, are depending on non renewable based to experience economic growth. But our economy is driven by increase in green economy spending – in turn supported by renewable energy”, the commissioner added.
Since Ethiopia has continued to register fast economic growth driven by huge public investments, efforts need to be exerted to make the growth inclusive, he said.
“Going forward, the main success will therefore be to turn high growth into inclusive growth, touching more of the population. This will require focusing on efforts to transition from still largely agriculture-based economies to higher-value-added activities in order to move the workforce out of agriculture into more productive sectors”
Dr. Costantinos Birhutesfa, Professor at the Addis Ababa University, echoed that the nation will become a middle income economy, supported by the rapid and successive growth the economy has witnessed over the past 12 years.
"Ethiopia is on track to eliminate poverty and become a middle income country by 2025," he said.
But, Costentinos urged that more work need to be done to increase domestic savings.
“Ethiopia could potentially reach middle-income status by 2025 if more emphasis is placed on boosting domestic savings rates, private sector development and improving the trade logistics”, he said.
Increasing savings would help Ethiopia to maintain high investment rates, he added.
The country will be able to do that by expanding access to both private and public financial institutions and by taking advantage of remittances from the Diaspora.