The Carnegie Endowment for International Peace published an excellent overview of Ethiopia’s economy today in their International Economic Bulletin. According to their overview, which was in part derived from a recent report in The Economist, the Ethiopian economy has experienced phenomenal economic growth — among the top five…in the world! And over the next five years, The Economist claims that Ethiopia could be ranking the third fastest growing country in the world! Third fastest!!
Much of the success has been due to fast growth in the Services sector. Financial services top the list with more than 20% annual growth from 2006 to 2010 followed by hotels and restaurants, which also grew over 20% a year in the same period. The Carnegie Endowment notes that the growth in financial services has generated relatively little employment though and, with tourism, essential ingredients are lacking for global competitiveness: “such as a well-integrated domestic market, skilled labor force, performing institutions, and quality infrastructure…”
Policy reforms, especially in tourism, which are being addressed, in part with current and future World Bank and USAID support, could help overcome these challenges and increase the competitiveness of Ethiopia’s services economy, particularly its tourism.
To read the full article, click here.