The Ministry of Finance and Economic cooperation (MoFEC) expects the 8.5pct growth rate projection to be maintained. According to Ahmed Shide, State Minister of MoFEC, economic targets set in the second Growth and Transformation Plan are not being revised as they are expected to be met.
“The plan in our second GTP has a prospect growth set and we expect that to be maintained. Again it is a prospect and we will try to unleash all our potential to reach that. We did not revise our growth target, still the economy is registering a very rapid growth rate and it will continue to do so. We will need a lot of foreign direct investment, agricultural investment as well as industrial park development,” Ahmed stated.
This was discussed during the ‘Ethiopian’ launch of the African Economic Outlook 2016 report on Thursday 29 September. The report that is published by the African Development Bank focused on sustainable cities and structural transformation of African economies.
“This report places special emphasis on sustainable cities and structural transformation, these are very crucial if Africa is to move up to a higher level of development and ensure sustainability of the gains secured so far,” Ahmed also said. He further underlined that structural transformation of African economies can only be realized if the manufacturing sector growth and value addition is given attention.
The 15th edition of the African Economic Outlook predicts the bulk of Africa’s investments that will facilitate the achievement of desired levels of industrialization are yet to come.
Despite growing trends in urban expansion, and the productivity this has brought forth, industrialization has grown at a relatively low pace across the continent. In order for countries to tap into this opportunity while ensuring sustainability, they will need to adopt multi-faceted participatory approaches in their urban development policies and strategies, the report states.
Looking at Ethiopia, the report underlines that the country was facing inflationary pressure due to the drought it had experienced requiring emergency food and aid while the risk of public-debt distress increased due to rising non-concessional borrowing and export under performance in 2014/15.
Despite that, the economy showed strong growth in 2014/15 estimated at 10.2 percent. The report states that this growth will continue in the 2016/17 period while public investment is expected to ease infrastructure bottlenecks and bolster economic structural transformation.