Ethiopia FDI Policy Report

Ethiopia FDI Policy Report
File Size:
3.90 MB
Mulu Gebreeyesus (PhD) Kiflu Gedefe Molla (PhD) Kenichi Ohno Izumi Ohno Sayoko Uesu Toru Homma
17 January 2022
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Overview and Summary 

Ethiopia’s policy learning and growth records were exemplary in the last two decades with active industrial promotion measures on the ground, an increased inflow of FDI and continued high growth. Notwithstanding these achievements, structural transformation fell far short of expectation or plan targets. The weight of output or export hardly shifted from traditional agriculture and services to industry. Manufacturing remains stagnant in volume, quality and productivity despite great policy effort expended. More recently, such unfavorable incidents as political instability and the COVID pandemic reduced Ethiopia’s growth momentum and worsened macroeconomic imbalances. The slowdown is experienced even before the nation reaches middle income unlike many high-performing latecomer economies in the past where fast growth did not stop until high income was attained. Ethiopia’s policy regime needs revamping in light of these circumstances. 

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