Unpacking Ethiopia’s Homegrown Economic Reform

Ethiopia in the past decade has shown impressive economic growth. Most of this growth came from a large government spending on infrastructure and huge investment on state-owned projects including the Grand Ethiopian Renaissance Dam (GERD). In 2010 the Ethiopian government adopted The Growth and Transformation Plan as a guiding policy document to gear the economy and achieve substantial economic growth. The Growth and Transformation Plan’s (GTP I and II) main goal was for Ethiopia to become a lower-middle-income country by 2025 through average annual real growth of 10-11 percent. The government had taken the greater role as the engine of the economy in the implementation of the transformation plan. It embarked on huge projects such as the renaissance dam, the industrial parks, the sugar plants in addition to spending on basic infrastructure such as roads and communications. During the first GTP Ethiopia achieved multiple positive changes in different sectors within the economy: achieving decline in poverty; notable progress in access to health and education; and improvement in access to major public infrastructures such as electricity, water, road and communication. The fruitful results Ethiopia achieved in different sectors by accomplishing the objectives of the first Growth and Transformation Plan (GTP-I) contributed as a springboard to the implementation of GTP-II.

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