AfDB Board approves 2016-2020 Country Strategy Paper for Ethiopia

07/04/2016
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Supports Ethiopia’s goal to become a middle-income country by 2025

At its regular sitting in Abidjan, Côte d’Ivoire on Wednesday, the Board of Directors of the African Development Bank Group (AfDB) approved Ethiopia’s Country Strategy Paper for 2016-2020, which aims to support the country’s ambition of becoming an industrialized middle-income country by 2025.

With an anticipated resource envelope of close to US $2 billion, the CSP is tied to the country’s new medium-term development plan and the second Growth and Transformation Plan (GTP II). GTPII aims to achieve climate resilient, green economic transformation through promoting and pursuing the following three objectives: (i) maintaining an annual average real GDP growth rate of at least 11%; (ii) pursuing aggressive measures towards rapid industrialisation and structural transformation; and (iii) ensuring the sustainability of growth by fostering a stable macro-economic framework and climate resilient green economy.

According to the CSP document, Ethiopia continues to record strong economic growth, with annual real gross domestic product (GDP) growth rate averaging 10.8% since 2004/05. This has been relatively inclusive and has contributed to the uplifting of about 20 million people out of poverty during the MDG period. As a result, Ethiopia has been able to achieve most of the Millennium Development Goal (MDG) targets.

Despite the reduction in the country’s poverty levels, an estimated 23 million people still live below the poverty line. The economy also faces several challenges including low agricultural productivity, low domestic resource mobilisation, high levels of youth unemployment, poor quality and inequitable distribution of basic services, insufficient access to finance, and a weak business climate to the private sector.

Thus, the CSP makes the case for scaling up investments in agricultural transformation, energy, transport, business climate and improved access to quality basic services. Agro-based industrialisation will be accelerated and the role of the private sector expanded across all economic sectors while emphasis will be placed on achieving food security, promoting gender equality and creating jobs for the youth.

The strategy will align with and facilitate attainment of GTP II objectives by continuing to focus on two main pillars: (i) infrastructure development, especially energy, transport, and water and sanitation, and (ii) economic governance, with particular emphasis on facilitating effective and efficient delivery of basic services at local level and business enabling environment for private sector development.

By aligning with GTP II, the new CSP’s twin pillars are consistent with the objectives and core operational priorities of the Bank’s Ten Year Strategy for 2013-2022 as emphasized in the High 5 priorities – Light up and power Africa, Feed Africa, Integrate Africa, Industrialize Africa, and Improve the quality of life for the people of Africa.

The Bank has emerged as one of Ethiopia’s largest development partners in the infrastructure sector –second in the energy sector, third in the transport sector, and fifth largest in terms of annual disbursements. 

During the discussion of the CSP, Board members welcomed the proposed pillars of engagement, and underscored the importance of expanding the role of the private sector in order to ensure inclusive and sustainable growth and development.