The capital of Ethiopia is the base for multiple development efforts in the country. Ethiopia has become one of the fastest-growing economies in the world, with 11 percent average growth since 2005. The development projects in Ethiopia are a product of foreign aid, government goals and foreign direct investments.

Ethiopia is Africa’s second most populated and oldest independent country. Although it has the fastest growing economy in the region, it is also the third poorest country in the world with a Multidimensional Poverty Index (MPI) of 87.33 percent. To address the growing capacity issues related to the large population and poverty rate, the Ethiopian government has focused on advancing development.

These five development projects in Ethiopia are examined based on the organizations that implement them.

The Federal Democratic Republic of Ethiopia

The Ethiopian government is focused on addressing developmental concerns in multiple areas. Past development projects in Ethiopia include the Sustainable Development and Poverty Reduction Program and the Plan for Accelerated and Sustained Development to End Poverty. Now, Ethiopia is in its second of two, four-year Growth and Transformation Plans (GTP I, II). GTP I focused on advancing industrial development to relieve fiscal and capacity deficits in Urban Local Governments (ULG). The GTP II goals address specific challenges the GTP I goals met.

Within Ethiopia’s twin GTP’s, the country’s Agricultural Transformation Industry (ATI) and Industrial Park Development Corporation (IDPC) achieve specific goals. The corporation “nurtures manufacturing industries to accelerate economic transformation and attract both domestic and foreign investors.” IDPC is currently working on four major industrial parks, three of which are in the capital, Addis Ababa.

The ATI is focused on impacting the smallholder farmer level. In alignment with GTP I, the ATI focused on agricultural productivity, production, marketing, research and natural resource conservation. With GTP II, the ATI continues the GTP I pillars to enhance food security and adds additional pillars to address agri-business and implementation capacity.

Since the inception of the Sustainable Development and Poverty Reduction Program in 2001, Ethiopia’s GDP rose by close to $62 billion, the largest growth recorded in the country. In the past 15 years, Ethiopia’s population also rose by 64 million. Ethiopia has experienced immense growth since these programs were initiated and its ability to track and maintain the growth indicates the effect of these development projects in Ethiopia.

International Fund for Agricultural Development (IFAD)

The IFAD is a specialized agency of the U.N. that “finances agricultural development projects for food production in developing countries.” In 2010, the IFAD established a country office in Addis Ababa to further relations with Ethiopia and oversee the development and expansion of rural finance.

Agriculture is an important asset to Ethiopia’s economy, as a majority of their exports are agriculture commodities and agriculture consists of about 45 percent of Ethiopia’s GDP. The significance of the agriculture industry for Ethiopia’s economy is a large reason the IFAD has invested a total of $398 million in agriculture development programs in Ethiopia. The IFAD’s programs focus on improving poor rural people’s access to natural resources, agriculture and livestock production technologies.

World Bank

The World Bank is a strong supporter of Ethiopia’s development, primarily through its International Development Assistance (IDA), the World Bank’s fund for the poorest. The IDA is Ethiopia’s largest provider of official development assistance. Since 1991, the IDA has committed over $17 billion to Ethiopia’s development primarily to “protect basic services, productive safety nets and roads.”

The World Bank and IDA recently provided Ethiopia with $200 million to fund the expansion of access to energy and has committed $380 million to Ethiopia’s GTP II. The World Bank has implemented development projects in Ethiopia to address education, water and sanitation and road quality and is a large contributor to Ethiopia’s poverty rate reduction from 55.3 percent in 2000 to 33.5 percent in 2011.

United Nations Development Program (UNDP)

The UNDP Ethiopia works with the Ethiopian Government and funding partners to forward a “developed and democratic nation with empowered citizens.” The UNDP in Ethiopia strengthens the relationship between the U.N. and Ethiopia by advocating for Ethiopia’s development and poverty reduction on a global platform and providing support for locating funds.

The UNDP set up the Agricultural Transformation Agency (ATA) to provide innovative technological productivity solutions to the industry that constitutes 80 percent of the employment base in Ethiopia. The UNDP focuses additional efforts on elevating the transparency, accountability and responsiveness of the Ethiopian government. With the support of the UNDP, Ethiopia was able to formulate and adopt Grant Sharing Formula, addressing the balance of resource flow in various regions and bringing equitable development throughout the country.

China

Formal relations between The People’s Republic of China and Ethiopia began in 1970. Now, China is one of Ethiopia’s largest trading partners with the volume of trade estimated to be over $6.3 billion. The China Communications Construction Company is currently contracted to build two industrial parks in Addis Ababa in partnership with the IPDC. These newly built industrial parks will house factories such as the TAL apparel factory, a Chinese company providing new jobs in Ethiopia already.

China is Ethiopia’s key foreign investor, primarily in infrastructure. In 2014, China-funded a $475 million urban rail project in Addis Ababa. China has also invested heavily in dams and roads and even built Ethiopia’s African Union headquarters in the capital. The investments from China have advanced Ethiopia’s development and provided employment opportunities for Ethiopia’s estimated 450 million workforce.

Arkebe Oqubay, from the prime minister’s office driving the industrialization policy, says Ethiopia is “focused on economic performance… the ultimate goal of any nation aspiring to develop, aspiring to catch up, is to improve the livelihoods of the people.”

With support from the Ethiopian government, multiple partners have assisted in growing the economy through development projects in Ethiopia. Today, Ethiopia has surpassed Kenya’s economy and taken the title of “East Africa’s Economic Giant.”

Ethiopia has many challenges to surpass that are associated with growth, such as job creation and capacity, but their alliances across the globe and governmental backing are a strong indicator of Ethiopia’s developmental success.

– Eliza Gresh

Photo: Flickr