Ethiopia is one of the fastest growing economies in Africa and the world. With a population of over 110 million people, Ethiopia is the second most populous nation in Africa and the 14th most populous in the world. It is also one of the poorest countries on the continent, with a per capita income of just $1,500. Despite its poverty, Ethiopia has made impressive strides in recent years in terms of economic growth and development.
In the last two decades, Ethiopia has experienced an average annual growth rate of around 8.5%, the highest in Africa. This growth has been driven by a number of factors, including increased investment in infrastructure, improved access to finance, and a focus on agricultural productivity. The country has also seen a surge in foreign direct investment (FDI) in recent years, with the World Bank estimating that FDI inflows to Ethiopia reached $1.5 billion in 2018.
The Ethiopian economy is largely agricultural, with over 85% of the population engaged in subsistence farming. Coffee is the country’s most important export, accounting for around 60% of total exports. Other major exports include oilseeds, pulses, hides and skins, and cut flowers. The manufacturing sector is also growing, with the government focusing on the development of industries such as textiles, leather goods, and food processing.
The Ethiopian government has also taken steps to improve the business environment and attract more investment. It has implemented reforms to improve the ease of doing business, including streamlining the registration process for companies and introducing a single window system for customs clearance. In addition, the government has created special economic zones (SEZs) to attract foreign investment, and has established a number of incentives for businesses, including tax holidays and duty-free access to certain goods.
The government has also taken steps to improve access to finance for businesses. It has established the Development Bank of Ethiopia, which provides loans to small and medium-sized enterprises (SMEs). In addition, the government has created a venture capital fund to invest in high-growth companies and has implemented a microfinance scheme to increase access to finance for the poor.
Overall, Ethiopia’s economy is on an upward trajectory and is set to continue to grow in the coming years. The government’s focus on improving the business environment and increasing access to finance is likely to further boost economic growth. With its growing population and abundant natural resources, Ethiopia is well-positioned to become an African powerhouse.