The club of countries continuing to post double-digit economic growth is dwindling rapidly in numbers. Ethiopia remains on the roster, with GDP expected to increase by up to 11.2% this year.

“We have not yet had much impact from the financial crisis on our economy,” says Ahmed Shide, Ethiopia’s state minister for finance and economic development. “In the financial sectors we don’t have any problem as we are not connected to the financial markets of the world. So far, our economy is growing steadily; the government is still embarking on a five-year development plan and we are going to meet our objectives that we have set in this plan.”

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Export worries

If and when the crisis bites, it will be to the detriment mainly of Ethiopia’s export performance, FDI inflows and outside development assistance, he says. For the moment, it is so far, so good. “The transmission of the effects of the financial crisis to the real economy might impact on Ethiopia in the future, but FDI and ODA flows and the performance of the economy in terms of growth are still quite healthy because of the unique nature of our economy.

“We have rigorously developed our own plans, especially the infrastructure projects which we are now undertaking, and we have a lot of prospects for any international investor to come and invest.”

Investment freeze

Nonetheless, Mr Shide says that some projects are bound to be affected. “We are planning now to freeze a lot of resources for major investment projects such as a major hydro-electric plant, which would generate power not only for Ethiopia, but for the whole region. Ethiopia has a lot of potential in water and we need to develop that. So we are trying to raise a lot of resources for this project. We’ll see.”