Back to Front Page

Ethiopia’s effort to create strong economic integration with neighbouring countries is compatible with African Union’s goal to create African Free Trade Zone (AFTZ), various ambassadors of Ethiopia stated

Ethiopia playing indispensable role in regional integration

 

By Gemech Tussa 08-15-17

 

Some two and half decades ago, when Ethiopia has launched the Agricultural led Industrialization policy, there were different suggestions against the idea. Many people, including scholars and analysts argued that it was difficult to develop the country’s economy, giving a priority to the agricultural sector. They rather suggested that giving priority to industrial development could facilitate the development of the country. 

 

The very argument in introducing the Agricultural Led industrial Development Policy was the country’s resource. It was impossible for Ethiopia to develop the industry at that time as it had no enough capital. But it is endowed with a large farming land and human labor. That is why the government decided to develop the agriculture sector harnessing the available resources.

 

In fact, it is incredible for many people that Ethiopia, one of the poor nations in the world, has become one of the fast economic growing countries. The rising economy in Ethiopia particularly in the past fifteen years has contributed to regional closeness. The economic growth has confirmed by the international community. 

In the first growth and transformation plan (GTP I), Ethiopia has laid bases for the development of the country’s industry that resulted in the growth of the share of industry in the GDP from 11 percent at take off stage to 14 percent in 2015; whereas the service sector grew by 46 percent in the same period. 

Besides, the country has been working hard to be a hub for supplying sustained electric power to countries in the region and even beyond.  Djibouti, Kenya, Sudan, Somalia Rwanda, Tanzania, South Sudan and other countries are also included in the plan.

The expansion of trade and investment is one of the boosting sectors in the country. The country has exerted unreserved efforts to create a viable environment for investment through improving its regulations and upgrading the country’s infrastructure and security.

                                                                                 

The strong move to build the economy and integrate it with other countries around has further strengthened in the second Growth and Transformation Plan (GTP II). The rising import-export items of the country have contributed to countries like Djibouti to earn a huge amount of money for Ethiopia used its ports. Djibouti has the stance of improving its services and also expanding its ports so as to become so competent to serve the rising Ethiopian economy and benefit from it. This in turn has been playing a significant role in maximizing the credibility and trustworthiness of the country. 

 

Ethiopia has also attempting to integrate itself with Djibouti that it has been offering the later electricity for the later with reasonable price. Agreements to enhance this trade relationship have also been improving from time to time.  Similar accords are also underway with Sudan and Kenya. Somalia is also expected to have such kinds of agreements if it managed to secure its peace and realize the stability.

 

The trade and investment of Ethiopia with its neighbors in particular and other countries around the world in general has been growing significantly.  One the typical example is the trade and investment between Ethiopia and Sudan. According to available documents the trade balance between Ethiopia and Sudan has grown from 3 million to 300 million USD in the past decade.  The investment relationship between the two countries has also been growing from time to time about 800 Sudanese investors have got their investment licenses. 

 

Ethiopia has also exerting efforts in connecting the people living at borders with people of nearest area in other countries. It has established market centers along borders with Kenya, Sudan and Djibouti.

 

The economic relation between Ethiopia and Djibouti has become a model for horn countries economic integration. The railway built between Ethiopia and Djibouti would enhance economic integration of the two countries. Djibouti at this time has become the sole outlet for Ethiopia’s export and import.

 

Established in 2014, Blue Spring water has been exporting water to Djibouti since 2016. It has also agreed with Ethiopia to develop tap water from Ethiopia to Djibouti about two years ago. Ethiopia endowed with ample amount of water but countries like Somalia, Sudan and Djibouti have shortage in having drinking water. It is possible for these countries to import bottled water from Ethiopia.

The efforts to expand road networks, electric power supply and other infrastructural development in the region could further facilitate the development endeavors of countries in the area. Ethiopia has been providing Electric power to Djibouti and Sudan so far.

It supplies 175 and 100 megawatts of electricity to Sudan and Djibouti respectively. Ethiopia has also built a 682 kilometer long standard gauge rail network connecting Addis Ababa to Djibouti. It has also worked industriously to increase power generation capacity from the existing 2,000 to 10,000 megawatts.

Apart from the efforts exerted to enhance regional economic integration, Ethiopia has been working hard to ensure peace and stability in the region.  It is commendable that Ethiopia’s contribution to create strong economic integration and peace in the region could also raise assimilation of the people in the region. 

 

Ethiopia shares borders with Djibouti, Eritrea, Kenya, Somalia, South Sudan and Sudan. It has been working to integrate the region.  The country has envisioned joining the middle income countries in the shortest possible time.  This could be a reality if and only if it has maximized the economic growth and enhancing peace and security in the region. Cognizant of the difficulty to grow alone while there are various conflicts and wars in the neighboring countries in particular and the continent in general, Ethiopia has been scarifying to bring an enduring peace. This is particularly strengthened in both the first and second Growth and Transformation Plans. 

 

 


Back to Front Page