If the word ‘Ethiopia’ still brings mental images of famine and abject poverty, it’s time to update your preconceptions. The country’s economy is now the fastest-growing in sub-Saharan Africa, and the IMF expects growth to exceed 8 percent for the next two years. Last year the country successfully completed a US$ 1bn bond sale, and foreign investment is pouring into the country. Workers wages are among the world’s lowest, at a tenth of current rates in mainland China. The African Growth and Opportunity Act also enables duty-free export to the United States.
Now Ethiopia has announced an ambitious goal — to become Africa’s next manufacturing center. The country intends to invest US$ 1bn per year over the next decade on industrial parks, with the World Bank and Chinese government having recently announced major funding commitments. It will take some time for Addis Ababa to take the lead in Africa, though; the World Bank estimates that its total manufacturing output at US$ 1.4bn, compared with US$ 48bn in South Africa.