Ethiopia’s Ten-year Development Plan
Priorities, prospects, and challenges ahead
Zewdie Adane
Addis Ababa 03 March 2022
Remarkable Growth Under GTP I and GTP II
Real GDP Growth Rate: 10.14% during GTP I and 8.2% during GTP II
11.4
12.0
9.9 10.3 10.4 10.2
10.0 8.7 9.0
8.0 7.7
8.0
6.1 6.3
6.0
4.0
2.0
0.0
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
Regardless of the huge strides in GDP Growth, Poverty Reduction, Physical
Infrastructure, and Social Developments; various challenges persisted
Macroeconomic
01
Structural 05
Sectoral
Imbalances Bottlenecks Inefficiencies
02 06 Low Capacity
Unsustainable Debt Regulatory Hurdles Utilization
Key Logistical Issues & Low Productivity
Rising Budget Deficit03
Challenges Institutional Rigidities 07
Low Export
during Competitiveness
Persistently Rising Inflation Red tape/bureaucracy
Implementation
04 08 Low Capacity for
of previous PlansReserves &
Dwindling FOREX Mismanagement of Sustainable & Decent
Exchange Rate Challenges SOEs & Public Projects Job Creation
Call for Urgent Need to Respond to the Challenges
❖ A Comprehensive Homegrown Economic Reform Agenda with a well-
synchronized set of measures was launched in 2019 to:
➢redress macroeconomic imbalances,
➢resolve structural bottlenecks, and
➢solve sectoral inefficiencies by unlocking new growth potentials
Key Pillars and Focus Areas of the Reform
Macroeconomic Structural Reform Sectoral Reform
Reform
Strengthen Public Sector Streamline regulations Agriculture sector reform
Finances - -
- Energy Sector Reform Manufacturing sector
Correct FOREX Problems - reform
- Trade Facilitation and -
Control Inflation Logistics Reform Tourism reform
- - -
Address Debt Sustainability Improve status & Mining sector reform
- management of SOEs, -
Improve Access to Finance Liberalization ICT sector and digital reform
Results of the Homegrown Economic Reform Implementation
. . . rising credit to the private sector, inclusion
. . . improving export earnings
Share of total credit disbursements Foreign trade: Merchandise Export
by Institutional Sectors (%) and Trade Balance (Billion USD)
80
69 6,000.0
70 2,988 3,617
4,000.0 2,836.1 2,666.5
60 53 55 2,000.0
49
50 44
0.0
39 -2,000.0 2017/18 2018/19 2019/20 2020/21
40 35
-4,000.0
30
20 -6,000.0
20 -8,000.0
10 11
10 7 8
-10,000.0 (10,894) (10,671)
(12,419) (12,446)
0 -12,000.0
2017/18 2018/19 2019/20 2020/21 -14,000.0
Public enterprises Cooperatives Private sector Merchandise Export Trade Balance
Results of the Homegrown Economic Reform Implementation
. . . rising domestic finance, not deterred by the pandemic and other challenges
Revenue and Resources Mobilization
Total deposits of the banking system Government revenue collection including
(Million Birr) tax revenues (Million Birr)
1,600,000.0 450,000.0
1,400,000.0 400,000.0
1,200,000.0 350,000.0
1,000,000.0 300,000.0
800,000.0 250,000.0
600,000.0 200,000.0
400,000.0 150,000.0
200,000.0 100,000.0
50,000.0
-
2017/18 2018/19 2019/20 2020/21 -
2017/18 2018/19 2019/20
Total Deposit Outstanding Demand Deposit Total Government Revenue Domestic Revenue Tax revenue
Savings Deposit Time Deposit
The Ten-years Development Plan
Overarching Objectives
01. To accelerate the path to prosperity
through a private sector-led
04. To ensure the quality and universal
accessibility of social services and
pragmatic market economy infrastructure
02. To maintain macroeconomic
stability and ensure sustainable
05. To ensure competitive, independent,
and quality public service system
job opportunities
To ensure structural
03. transformation through
productivity and competitiveness
06. To build just and inclusive
institutions that would ensure
peaceful society
Strategic Pillars of the Ten-Year Development Plan
1. Quality growth and shared prosperity;
2. Productivity and competitiveness;
3. Area
Focus Technological capability and digital economy,
4. Sustainable development financing;
5. Private sector-led economic growth;
6. Resilient green economy;
7. Institutional transformation;
8. Gender and Social inclusiveness;
9. Justice and efficient public services;
10. Peace building and regional economic cooperation
Priority Focus Areas of the Ten Years Development Plan
1. Multisectoral sources of growth and job opportunities
Focus
2. Area
Ensuring sustainable and inclusive development financing
3. Harnessing the demographic dividend
4. Improving the quality and efficiency of infrastructure projects
5. Managing urban development and making urbanization sustainable
6. Building Peace, Justice, and inclusive institutions
Economic Growth
✓The economy will stay in its high growth trajectory
✓ . . . average annual growth rate of 10% has been targeted
✓. . . and this is sufficient to reduce poverty from 19% in 2019/20 to 7% in 2029/30
Average
Sectors 2015/16-2019/20 2020/21-2024/25 2025/26-2029/30 2020/21-2029/30
Agriculture
4.1 5.5 6.2 5.9
Industry
15.2 11.4 14.6 13
Manufacturing
13.0 18.4 22.9 20.6
Construction
17.3 8.5 9.2 8.9
Service
8.2 10.4 10.7 10.6
Real GDP
8.2 9.2 10.9 10
Structural Transformation
Sectoral Composition of GDP (%): The share of Agriculture in GDP to decline,
leaving way for the value adding Industrial Sector (mainly Manufacturing)
Agriculture Industry Manufacturing Construction Service
2029/30 22.0 35.9 17.2 17.9 42.1
2028/29 23.0 34.6 15.5 18.3 42.4
2027/28 24.1 33.4 14.0 18.6 42.5
2026/27 25.1 32.3 12.6 18.9 42.6
2025/26 26.2 31.3 11.4 19.1 42.5
2024/25 27.2 30.4 10.3 19.3 42.4
2023/24 28.2 29.7 9.4 19.4 42.1
2022/23 29.2 29.0 8.6 19.6 41.8
2021/22 30.2 28.4 8.0 19.6 41.3
2020/21 31.2 28.0 7.4 19.8 40.8
2019/20 32.7 29.0 6.9 21.1 39.5
Structural transformation continued
Composition of export goods by major sectors (%): Manufactured goods to
dominate the export market, a departure from past trends
100
77 2019/20 2029/30
80
60 48.4
40 36.4
20 13.3
6.9 11.3 2.2 2.4 0.5 1.4
0
Agriculture Manufacturing Mining and Electricity Others
Fuel
Structural transformation continued
Labour force participation (%): Shift in labour force participation from Agriculture
to Industry (predominantly to Manufacturing) & Services
Service 39
20
Manufacturing 15
4.5
2029/30
Industry 19 2012/13
7.5
Agriculture 42
72.7
0 20 40 60 80
The Ten-year Development Plan has been linked with Global and
Regional Development Commitments at the GOAL and INDICATOR levels
The Sustainable Development Goals The ten-years Development Plan
THE ECONOMY
✓The macroeconomic Plan
✓Economic sector plan
✓Infrastructure Plan
THE SOCIETY
✓Population and human development plan
✓Peace, justice, good governance
✓Gender, social protection & social inclusion
✓Regional cooperation and partnerships
THE BIOSPHERE
✓Environment, emissions reduction
✓Resilience and climate change issues
✓Water, sanitation, basin development
✓Renewable energy
The Challenges
1. The prolonged COVID-19 pandemic
2. Unprecedented
Focus Area level of drought, exacerbated by a changing climate
3. The after effect of the conflict in Northern Ethiopia
4. Shifting focus to rehabilitation and reconstruction of the war’s damage
5. Rising global commodity prices [fuel, fertilizer, etc.]
6. Changing external environment, including suspension from AGOA
7. Geopolitical tensions and falling external financing
The Prospects
1. Possible productivity gain from increased digitalization, GERD
2. Area
Focus More opportunities from opening up of SOEs to private investment
3. Liberalization of certain markets and services, improve efficiency
4. New trade opportunities (AfCFTA, Zero Tariff export to China)
5. Prospect appears to be cautiously positive, but not impressive
6. Significant number of the plan’s targets unlikely to be met
7. Need for possible revision and refocusing
Thank You!
