In-Depth Analysis
Ethiopia
The East African giant is the second-most populous nation on the continent after Nigeria and, despite its commendable economic growth performance, remains one of the poorest nations on earth. Under the ambitious reform programme first revealed in 2018, Ethiopia seeks to escape the poverty trap via development towards becoming a regional energy powerhouse and manufacturing hub.
The 2020/21 FY is set to shoulder the bulk of the pandemic shock, with a protracted recovery in services exports and consumer spending, dimming FDI allure and plunge in capex conspiring to slow growth to 0.9%. The risk of a balance of payments event is exceedingly high due to a brittle reserve buffer and weak forex liquidity position, while hidden direct and contingent liabilities contribute to external stress. On the political front, Ethiopia’s battle against Covid-19 – successful by most metrics – has remarkably taken a back seat to a series of major political challenges. The short-term outlook is for higher political risk: much is going wrong at the moment, and the outlook for the next year is uncertain. (Source: Ethiopia Quarterly Update, published August 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-2.5 |
|
Consumer Price Index (% change y-o-y, avg) |
15.8 |
|
Current Account Balance (as a % of GDP) |
-5.3 |
|
Real GDP (annual % change) |
8.3 |
|
GDP per Capita, US$ |
827.3 |
|
Import Cover (months) |
1.8 |
|
Population, million |
112.1 |
| Total External Debt (as a % of GDP) |
33.3 |