Country Economic Transformation Outlook (CETO): Ethiopia

Over the past two decades, Ethiopia has achieved something few African countries have: maintaining a remarkable economic growth rate of 8 percent per year, accompanied by significant increases in per capita GDP, poverty reduction, and improved access to education, healthcare, and infrastructure. Since 2010, the government has enacted multiple development plans to boost the country’s economic transformation potential, and Ethiopia is often cited for notable strides in legal reforms and women’s representation in parliament.

However, growth has not fully translated into economic transformation, and the results of the country’s strategic initiatives and policies have been mixed. According to ACET’s African Transformation Index (ATI), Ethiopia scores just 20 out of 100, indicating a low level of economic transformation and placing the country below the continental average. The manufacturing sector remains underdeveloped, exports are still highly concentrated in a narrow range of primary commodities, and gender disparities continue to limit inclusive growth.

Guided by ACET’s Growth with DEPTH framework and building from the most recent ATI, the Ethiopia Country Economic Transformation Outlook (CETO) assesses the country’s transformation performance while exploring the challenges to future progress. It also takes a deep dive into three sectors deemed particularly crucial to Ethiopia’s economic transformation: light manufacturing (micro, small, and medium enterprises), pharmaceuticals, and the digital economy. The CETO also emphasizes the importance of gender-responsive policymaking.

Using evidence-based analysis, the Ethiopia CETO also provides targeted, actionable recommendations for the country’s sustainable economic growth. And by incorporating a distinct gender lens, it aims to address gender-specific barriers and opportunities to ensure that both men and women benefit from the country’s economic advancements.