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Ethiopia’s economy is forecasted to grow by 9% in the 2025/2026 fiscal year, driven by ongoing structural reforms and renewed efforts to bolster macroeconomic stability, according to President Taye Atske Selassie.
Speaking at a joint session of the House of Peoples’ Representatives and the House of Federation in Addis Ababa, the president emphasized the government’s ambition to build a more self-reliant, diversified economy following an 8.8% growth rate recorded in the previous year. Key growth sectors—including agriculture, manufacturing, and services—have shown strong recovery. To sustain this momentum, the government plans to implement policies aimed at curbing inflation, increasing productivity, and accelerating infrastructure investment.
A central initiative highlighted by President Atske Selassie is the launch of a large-scale domestic fertilizer production facility, intended to transform agricultural practices and improve food security. Agriculture, employing over two-thirds of the population, remains the foundation of the Ethiopian economy, and this step is seen as crucial in reducing dependency on imports and boosting yields.
In the 2024/2025 fiscal year, Ethiopia achieved a record $8.3 billion in export earnings, largely from agricultural products, manufactured goods, and services like air transport. The government now seeks to diversify further, focusing on agro-processing, renewable energy, and digital innovation to enhance export competitiveness and value addition.
Tourism has also been identified as a strategic growth sector. Plans include expanding tourist infrastructure, preserving heritage sites, and improving air transport, aligning with the African Union’s Agenda 2063 vision for sustainable, inclusive tourism across the continent.
Infrastructure development remains a cornerstone of Ethiopia’s growth strategy. Continued investment is being channeled into irrigation systems, water management, energy production, and transport networks—efforts aimed at enhancing domestic connectivity and regional trade integration, particularly under the African Continental Free Trade Area (AfCFTA), which Ethiopia ratified in 2020.
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Despite the optimistic outlook, the president acknowledged challenges including fiscal constraints, climate variability, and global economic volatility. Analysts stress the importance of maintaining macroeconomic stability and supporting small and medium-sized enterprises to ensure inclusive, sustainable growth.
Ethiopia’s development model underscores a broader Pan-African commitment to self-determined, resilient growth rooted in national priorities rather than external prescriptions. As one of the Horn of Africa’s most populous nations, Ethiopia’s trajectory offers key lessons in African-led transformation.
