Ethiopia is in the midst of a US $75 billion dollar, 5-year growth plan. The plan includes infrastructure projects in and around Addis Ababa, the nation’s capital. According to Mathewos Bekel, head of the city’s planning office, Addis Ababa is already more than 125 years old so plans will change the existing situation of the neighborhoods in order to put in more infrastructure. Therefore, the main challenge developers will come when trying to redevelop the existing areas.

The plans will expand market areas, creating more space for leisure areas and transportation, and will bring in more services such as cafeterias and restaurants. The city and surrounding areas are expecting a population growth of about 5 million people in the coming, and as many as 8 million in the coming 25 years. Rapid population growth is a trend seen across Africa. 41% of Africans live in cities and that numbers grows by 1% every 2 years. The city planning office will work to transform 50% of the cities slums into permanent housing complexes within a decade. In order to improve the slum areas in terms of the quality of the buildings, the infrastructure, and services, they need to be redeveloped and updated.

Based on its Annual Competitiveness Report, the African Development Bank says a shortage of infrastructure reduces the continents annual growth by at least 2 percent. Infrastructure deficit has been identified as a major barrier to improved productivity, private sector development, economic diversification, and spatial inclusion. By spending just 5% of its total GDP on infrastructure, the bank estimates productivity could increase by up to 40%.

Ethiopia is one of the world’s oldest and poorest countries. The country’s per capita income of US$370 is significantly lower than the regional average of US$1,257. The government is working to reach middle-income status—US$1,025—over the next decade.

The economy has experienced strong economic growth over the past decade, averaging 9.9% per year in 2004/05-2011/12, substantially higher than the regional average of 5.4%. This economic growth has created positive trends in reducing poverty throughout urban and rural areas. In 2004-2005, 38.7% of Ethiopians lived in extreme poverty. Five years later this proportion was reduced to 29.6%. Using the Growth and Transformation Plan (GTP), the goal is to reduce this to 22.2% by 2014-2015.

Ethiopia’s investment in infrastructure will play a key role in continuing and accelerating the progress made in recent years towards economic growth and development goals. Over the past two decades, significant progress has been made:

  • Primary school enrollments have quadrupled
  • The number of people with access to clean water has more than doubled
  • Child mortality has been cut in half

Ali Warlich

Sources: CNN, AfDB, World Bank
Photo: Focus Africa