Analysis of Opportunity Factors for Economic Development in Ethiopia: A Commentary

Abstract

Ethiopia has been registering an impressive double-digit growth over the last decades that led to improvements in per capita income and poverty reduction. The purpose of this paper was to review and reflect on the contemporary opportunities available in Ethiopia to build a robust economy, the challenges encountered and the way forward. The assessment employed systematic literature review study design that involved descriptive and content analysis techniques. The results of the intensive desk review indicated that the country is endowed with huge natural resource bases such as diversified agro-ecologies; large labour power supply; enormous renewable energy sources such as hydroelectric power, wind, geothermal and solar energy, and outstanding tourist attractions that expedite its development. Likewise, the Home-Grown Economic Reform and “Medemer”; government commitment; increased economic collaborations with countries, regional organizations and development agents; growing inflows of foreign direct investment; improvements in infrastructure; and aspiration of the people to prosper have contributed for the growth. Key challenges that should be addressed to build a robust economy include the rain-fed, subsistence and traditional nature of agriculture; negative balance of payments and unsatisfactory export performance; price inflation; ethnic conflicts and insecurity; unemployment; climate change; and land degradation. Nevertheless, it could be fairly concluded that Ethiopia is at the right track to build a strong and competent economy.