Ethiopia: World’s Third Fastest Growing Economy

Published on 9th April 2012

The last decade has shown that in the race to claim the 21st century, Africa will give Asia and a rising Latin America a run for its money. McKinsey global recently published a ground breaking publication named “Lions on the Move: the progress and potential of African Economies.”  Drawing a direct parallel to the economic emergence of the Asian Tiger Economies, the study fixed impressive numbers against the impending rise of the African Lion economies. 

“There is no more impressive an African Lion economy on the move than that of Ethiopia” says Henock Assefa, Managing Partner of Precise Consult International PLC, the organizers of the Ethiopia Investment Summit 2012.  “According to the conservative estimates of the Economist Magazine, Ethiopia will be the third fastest growing economy in the world in the period between 2011-15.  It is no surprise that the World Economic Forum has chosen Ethiopia as its host for its 2012 gathering of the continent’s best under the theme “Shaping Africa’s transformation.”
With a population of 85 million, Ethiopia is the second largest country in Africa and one of the largest unexplored markets in the world.  More than 70% of the country is aged under 30 and the country’s rapidly expanding education system currently boasts 20 million students.  The national economy has registered growth rates in excess of 10 percent for several years and the country appears to be emerging on the world scene and attracting much interest from investors. The country is already the third largest coffee producer in the world and boasts the largest livestock population in Africa.  It is also the fourth largest sesame exporter in the world, second largest horticulture exporter in Africa, and one of the largest honey and beeswax producing countries in the world.
For those who knew Ethiopia in the past as the unfulfilled promise of an African breadbasket, all the current noise the nation is making in agriculture and agro processing is non-too surprising.  What has become a surprise is the rapid wave in which the country seems to be building value added industries on its increasing agricultural output.  With labor costs uniformly rising across Asia, Ethiopia has now become a competitive location for sourcing garments, attracting the attention of some of the world’s leading brands.  The chief economist of the World Bank, Justin Lin, recently lauded Ethiopia, citing a study that has shown that Ethiopia can be competitive with China in both these industries.
While economic growth numbers are already impressive, Ethiopia is likely to surprise further in the coming years.  With new mining finds in recent years, the country is poised to become among the top five gold producing countries in the world.  With its heavy investments in renewable hydropower, it is clearly on the way to become a major exporter of power into the rest of Africa and the Middle East.

 Research conducted by the Frontier Strategy Group recently pointed out Addis Ababa, Ethiopia’s capital, as one of the next 5 large cities in Africa with rapidly expanding economies.  Indeed, as a seat of the African Union, Addis Ababa is already the diplomatic capital of an emerging pan African polity.
These solid hard facts are the platform on which the Ethiopian Investment Summit is based:  “The idea behind the Ethiopia Investment Summit 2012 is to help foreign investors understand this newly emerging giant of an African economy,” says Henok Assefa.  “We will have in one room 200 CEOs of Ethiopia’s largest and most promising enterprises, meeting with upto 200 foreign CEOs exploring the Ethiopian market, against a background of some serious economic analyses and information. With the strong support we’ve so far received from the Government of Ethiopia, we expect a very strong and relevant participation from key decision-making personalities, including several key cabinet ministers.
The kind of interest the country is witnessing is clearly indicated in the type of companies who are sponsoring the Ethiopia Investment Summit 2012.  The list includes premiere consulting and finance firms the likes of The Boston Consulting group and Ernst and Young, and Schulze Global Investments, a private equity firm well experienced in Asia but currently betting on Ethiopia.  Access Capital and South West Energy are also two of the companies currently betting big in Ethiopia’s future. 

“If you are an investor still upset because you missed the start of the Asian and Chinese economic revolutions of the last 20-30 years, then you owe it to yourself to attend the Ethiopia Investment Summit 2012” concludes Mr. Assefa.
Courtesy: Precise Consult International PLC (PCI)

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