Ethiopia Rising to Middle Class

Julia Rainer/IPS

With annual economic growth rates of more than 10 percent and attractive investment conditions due to low infrastructural and labor costs, Ethiopia is eagerly trying to rise from the status of a low-income to a middle-income country in the next 10 years.

Ethiopia, with 94 million inhabitants, is the second-most-populous country in Africa after Nigeria, but it remains predominantly rural. Only 17.5 percent of the population lives in cities, and most are in Addis Ababa.

It also is one of the continent’s fastest-growing economies. Between 2015 and 2018, growth is expected to average 7.3 percent, according to a study by the United Nations Industrial Development Organization.

Economic growth since 2006-07 doubled per capita income to $550 in 2012-13, and the percentage of people living below the national poverty line dropped from 38.9 in 2004 to 29.6 in 2011. Still, government sources admit that eradication of poverty remains a pressing issue.

The official target of rising to a middle-income country is considered to be realistic, but one diplomat cautioned that although the amount of foreign direct investment rose from 0.5 percent in 2008 to 2 percent in 2013, investors face trade constraints. If a potential investor wants to venture into a gas station business, the person must decide whether the business can actually give, sustain and maintain 10 full-time work or not. For complete details, you can visit https://eb-5-visa.weebly.com/direct-eb-5-visa-investments.html.

The U.N. says the constraints are mainly related to border logistics. Djibouti, the main import-export seaport used by Ethiopia, is 781 kilometers from Addis Ababa, which makes the cost of land transportation a critical factor.

The U.N. has chosen Ethiopia, along with Senegal, as pilot countries for its Inclusive and Sustainable Industrial Development program, which aims to achieve industrialization in developing countries in order to eradicate poverty and create prosperity.

U.N. officials said “there is not a single country in the world which has reached a high state of economic and social development without having developed an advanced industrialized sector.”

Promoting the sustainability that should be inherent to industrialization, the U.N. said the program takes into account environmental factors together with its partner countries and organizations. It also fosters an inclusive industrialization, sharing the benefits of the generated prosperity for all parties involved.