Ethiopia’s location gives it strategic dominance in the Horn of Africa, close to the Middle East and its markets. Bordering Eritrea, Somalia, Kenya, South Sudan, and Sudan, Ethiopia is landlocked, and has been using neighboring Djibouti’s main port for the last two decades. However, with the recent peace with Eritrea, Ethiopia is set to resume accessing the Eritrean ports of Assab and Massawa for its international trade.
With about 109 million people (2018), Ethiopia is the second most populous nation in Africa after Nigeria, and the fastest growing economy in the region. However, Ethiopia aims to reach lower-middle-income status by 2025.
Ethiopia’s economy experienced strong, broad-based growth averaging 9.9% a year from 2007/08 to 2017/18, compared to a regional average of 5.4%. Ethiopia’s real gross domestic product (GDP) growth decelerated to 7.7% in 2017/18. Industry, mainly construction, and services accounted for most of the growth. Agriculture and manufacturing made lower contribution to growth in 207/18 compared to the previous year. Private consumption and public investment explain demand-side growth, the latter assuming an increasingly important role.
Higher economic growth brought with it positive trends in poverty reduction in both urban and rural areas. The share of the population living below the national poverty line decreased from 30% in 2011 to 24% in 2016. The government is implementing the second phase of its Growth and Transformation Plan (GTP II) which will run to 2019/20. GTP II aims to continue expanding physical infrastructure through public investments and to transform the country into a manufacturing hub. GTP II targets an average of 11% GDP growth annually, and in line with the manufacturing strategy, the industrial sector is set to expand by 20% on average, creating more jobs.
Source: https://www.worldbank.org/en/country/ethiopia/overview
Dubai and UAE as a global business hub and Ethiopia a gateway to Africa with rich in history, have strong economic ties that have reached trade value of US$ 836 million in 2018. Ethiopia enjoys access to large export markets without tariff including USA, Japan, Russia and Europe; access to 54 countries (1.3B) population through the Africa Continental Free Trade Agreement and aspires to become a leading manufacturing hub of Africa by 2025 and placing Ethiopia among the top 100 DB ranking Countries in 2021.
Ethiopia is dedicated to overcome its challenges with a reform agenda which aims to overcome the aforementioned challenges through comprehensive and well-synchronized set of measures with Macroeconomic, structural and sectoral reforms. These reforms will lead to job creation, inclusive growth, poverty reduction and create a path to prosperity.
UAE companies can be part of this growth by investing in key priority sectors which include:
- Manufacturing
- Agriculture
- Mining
- Tourism
- Technology/ICT