On 17 January 2018 the International Monetary Fund (IMF) issued a report following the conclusion of consultations with Ethiopia under article IV of the IMF’s articles of agreement.

Ethiopia’s average annual GDP growth has been around 10% in the past decade buoyed by government investment in agriculture and infrastructure. GDP growth for 2016/17 is estimated at 9%, following severe drought conditions in the previous year. Foreign direct investment grew by 27.6% in 2016/17 with investment flowing into the new industrial parks and further inflows due to privatization. Growth is expected to remain high in 2017/18 reaching 8.5% owing to export expansion as new manufacturing facilities and infrastructure come into use. In the medium term growth is expected to remain at 8% with sustained expansion of exports and investment.

The IMF report notes that the conditions for export expansion and private sector-led growth have been put into place with investments in infrastructure to enhance trade. The IMF Directors support the goal of strengthening domestic revenue mobilization. The report therefore urges the government to accelerate the ongoing reforms of the tax administration.

The report also welcomes the plans to improve the management and oversight of public enterprises and suggests that public-private partnerships, long term concessions and privatization of state owned enterprises could be used to fund infrastructure. The report also notes that the continuing efforts to improve the business climate, promote financial inclusion and improve governance are also important. Efforts to strengthen the compilation of economic statistics are welcomed and the report recommends adoption of international standards on monetary and financial statistics.