A country report by the United Nations Economic Commission for Africa (UNECA) on Ethiopian economy advised the country for a policy priority that focuses on deeper regional integration.
Ethiopia is becoming more integrated into regional infrastructure networks, with Ethiopian Airlines playing a major role in air travel, a new railway linking Addis Ababa to Djibouti City, and the construction of a power transmission line to Kenya.
However, deeper integration pertaining to trade, finance, and labor with neighboring countries, especially through the country’s membership of COMESA and IGAD, has significant potential to impact greater dynamism in the economy.
In particular, the development and strengthening of regional value chains should be further explored.
The report also suggested that there is scope to create a more conducive business environment.
“While public investment has been the key driver of economic growth, sustaining this positive momentum requires the emergence of a dynamic domestic private sector. The investment climate can be improved through the gradual implementation of financial reforms (to expand credit creation), continued infrastructure development, such as through Private Public Partnerships (PPPs), and greater competitiveness, by, for example, facilitating market entry in key sectors,” the report said.
“Moreover, securing social and political stability – through enhanced civic engagement – is indispensable to create the enabling conditions for sustained economic growth and transformation,” the report said.