The Grand Ethiopian Renaissance Dam on the Nile will be the largest hydroelectric power plant in Africa ©REUTERS/stock.adobe.com
The Grand Ethiopian Renaissance Dam on the Nile will be the largest hydroelectric power plant in Africa ©REUTERS/stock.adobe.com

Country spotlight: Ethiopia

7 February 2020

Population
113 million

Area
1,100,000km2 

The helicopter view
Ethiopia struggled with political unrest in the 20th century but is making good progress under PM Abiy Ahmed. 

Economic outlook
The country has the fastest-growing economy in Africa. 

Biggest investors
The country’s largest investors are China, the EU, Turkey and India. 

Strengths
With the largest water reserves in Africa, hydroelectric plants provide around 90% of the country’s electricity. It also has an abundance of natural resources including gold, potash, copper, platinum and unexploited natural gas. 

Supply chain issues
Ethiopia’s economy depends mostly on agriculture (about 45% of GDP), which is at risk of drought, water pollution and land degradation. Coffee is critical, with exports around $400m per year. Major imports include aircraft, machinery, metal and motor vehicles. 

Challenges
Being landlocked has forced Ethiopia to rely on neighbouring Djibouti for port access, although new-found peace with Eritrea may open up Assab and Massawa. Although education enrolment is improving, the literacy rate is still only at 49%. 

Bottom line
If the government comes good on its promises to privatise state-owned infrastructure, the economy could grow even more. The World Bank says the nation aims to reach lower-middle income status by 2025. But the spectres of government corruption allegations, political instability, terrorism and drought remain in the background.

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