Ethiopia has experienced an average economic growth of 10.8% per year in the past decade and it’s expected to overtake Kenya soon to become East Africa’s economic power.

By Gwendolin Hilse (DW) |

Ethiopia’s economy is growing so rapidly it may soon replace Kenya as the largest economic power in the region. But a large number of people in the country still live in poverty and many challenges remain.

The recent inauguration of the giant Hawassa industrial park was a special moment for Ethiopia’s government. Built with Chinese help, the park has modern halls where leather and textile products will be produced for the European and American market. Located 275 km south of the capital Addis Ababa, the park is expected to turnover 1 billion dollars annually and provide employment for more than 60,000 people.

Ambitious plans

The plant in Hawassa is one of 16 industrial parks planned by Ethiopia’s government. In a push to revive the country’s economy, they are investing heavily in large infrastructure projects. In 2015, they rolled out a modern light railway in Addis Ababa – the first fully electric tram in sub-Saharan Africa. By 2020, a 5,000-kilometer rail network should connect the country with its neighbors and the port of Djibouti. To provide a regular source of electricity in a country where less than a quarter of people have access to power, the government is also constructing a vast dam on the upper reaches of the Blue Nile.

With a gross domestic product (GDP) of 800 US dollars (715 euro) per capita, Ethiopia is still one of the poorest countries in the world. Almost 6 million people depend on food aid.

But Ethiopia’s economy is booming. The country has experienced an average economic growth of 10.8 percent per year in the past decade and it’s expected to overtake Kenya soon to become East Africa’s largest economy. In 2014, consulting firm Deloitte & Touch spoke of an “economic miracle”.

The question is how sustainable this boom is in a country that has been under a state of emergency since October 2016 following protests against government policies and human rights abuses. The government has cracked down on dissent and arrested several opposition leaders.

Continue reading this story at Deutsche Welle (DW)
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