By Staff Writer
NAIROBI, Kenya – Ethiopia’s ambition to achieve lower middle-income status by 2025 remains unmet, as the latest World Bank classification continues to place the country among low-income economies. The classification is based on Gross National Income (GNI) per person, calculated using the World Bank’s Atlas method. For 2025, countries with a GNI per person of $1,175 or less are considered low-income, while lower middle-income ranges between $1,176 and $4,635. Ethiopia’s current figures fall short of this threshold.
Prime Minister Abiy Ahmed recently spoke to lawmakers about the country’s progress. He emphasized industrial and agricultural growth as signs of economic change. He mentioned that Ethiopia’s manufacturing sector has gone through a major change. The government expanded manufacturing capacity from 47% to 67%, partly because of new industrial parks that have drawn foreign investment.
Abiy also discussed the government’s plan to rely more on domestic production instead of imports.Making products like cement, steel, glass, and ceramics at home has saved about $5 billion.He noted that mining, manufacturing, and energy sectors have grown by 24%, 20.3%, and 23% respectively.The government plans to make $1 billion from exporting industrial goods in the next year.
In agriculture, Abiy pointed out increased production as a sign of change.Ethiopia now cultivates 29 million hectares of land and harvests 1.3 billion quintals of crops.The sector has grown by 7.7%, showing a structural shift in agriculture. He also mentioned the “Bounty of the Basket” program, which has helped Ethiopia become the second-largest avocado exporter in Africa.He also highlighted wheat growing in the Borena region, which has improved after a drought.
Globally, the World Bank notes that the number of low-income countries has declined from 30% in 1987 to 11% today, with six countries moving up in the latest classification. For example, Togo advanced from low-income to lower middle-income, while Jordan, Micronesia, the Philippines, Sri Lanka, and Vietnam progressed to upper middle-income. Ethiopia, however, remains behind, underscoring the gap between its aspirations and current realities.
The government’s reform agenda includes investments in human development, technology, infrastructure, competitive exports, productivity improvements, and trade balance reduction. As the Prosperity Party consolidates its mandate after a strong election win, the success of these reforms will be crucial in determining whether Ethiopia can close the gap and achieve its long-term economic goals by 2030.
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