Problems

Ethiopia’s remarkable economic growth has been accompanied by a substantial decline in poverty over the past years. The recent growth was driven mainly by services and agriculture on the supply side, and private consumption and investment on the demand side. Despite that, the country is one of the poorest in the world, with a rapidly growing population [1] .  

In Ethiopia, economic activity has shifted from agriculture directly into construction and services, largely bypassing the critical phase of industrialization. To facilitate industrialization, Ethiopia has strengthened its institutional, legal and regulatory framework with a focus on promoting Foreign Direct Investment (FDI) in light manufacturing, especially in the form of industrial parks. Ethiopia’s Growth and Transformation Plan II has a goal of making Ethiopia as a manufacturing hub in Africa [1].

Sustaining the current economic growth, creating employment opportunities for the young, and sustainably manage the natural resources remain among the greatest challenges in Ethiopia.  Moreover, keeping with the conventional economic development model of the country (business as usual) would more than double its GHG emissions. Ethiopia’s contribution to GHG emissions is very low on a global scale, however, if the conventional economic development is pursued, the projected environmental impact risks follow the pattern observed around the globe [2]. As noted previously, in Ethiopia, the country’s economy and the livelihood of its people are highly vulnerable to climate change.

Causes
Responses
Opportunities