The Oxford Handbook of the Ethiopian Economy
Reference volume rather than a read; the only place much of this data exists in English.
Summary
Fantu Cheru, Christopher Cramer and Arkebe Oqubay edited this comprehensive reference on the Ethiopian economy, with contributions from economists and specialists covering every major sector and policy area.
The volume covers the historical background including the imperial and Derg periods; macroeconomic management, exchange rate policy and the foreign exchange constraint that has shaped everything else; agriculture, which employs the large majority of Ethiopians, and the land tenure system in which the state owns all land; industrial policy and the specific sectors targeted including textiles, leather and floriculture; infrastructure, including the enormous public investment in roads, rail, power generation and the Grand Ethiopian Renaissance Dam; the financial sector, which is closed to foreign banks; education and health; and the political economy of the developmental state model the government pursued.
The volume was published in 2019, at the point when Ethiopia's growth record over the preceding decade had been among the fastest in the world and the model was attracting attention. The subsequent conflict from 2020, the macroeconomic crisis, the debt restructuring and the currency reform all fall outside it. Readers should treat it as a comprehensive reference on the model as it stood rather than as an assessment of its outcome. Oqubay's participation as a senior government figure should be weighed.
Key takeaways 7
- Ethiopian growth over the decade to 2019 was driven by public investment in infrastructure funded substantially by external borrowing.
- State ownership of all land constrains agricultural investment and prevents land from serving as collateral.
- The foreign exchange constraint has been the binding limit on Ethiopian growth, since imports required for investment exceed export earnings.
- Industrial policy targeted specific sectors including textiles, leather and floriculture with very different results in each.
- The financial sector remained closed to foreign banks, which limited capital inflow and protected domestic institutions.
- Agriculture employs the large majority of Ethiopians, so agricultural productivity determines both incomes and the labour available for industry.
- The volume documents the model as it stood in 2019 and predates the conflict, macroeconomic crisis and debt restructuring that followed.
Who should read it
Investors and analysts working on Ethiopia who need a comprehensive sectoral reference on the economy as the developmental model stood.
Where it sits in the reference 2
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