Another African country is coming after South Africa’s crown
Ethiopia now ranks as Africa’s fifth-biggest economy, after the nation revised its national accounts to take into account emerging sectors such as the digital economy.
Gross domestic product in the fiscal year that ended in July was the equivalent of $210.7 billion, Finance Minister Fitsum Assefa said in a post on X.
The economy in the new 2024-25 base year was $201.4 billion, 59% bigger than the previous estimate.
Ethiopia previously used 2015-16 as its base year, which “no longer captured the economy’s structural transformation, sectoral expansion and emerging activities such as digital finance and services,” Fitsum said.
The new data will mechanically reduce Ethiopia’s debt-to-GDP metrics, potentially improving headline debt sustainability indicators as the government continues restructuring its loans under the G20 Common Framework, Oxford Economics said in a research note.
A similar rebasing in South Africa last week led to a revision of that country’s debt ratios.
“However, outstanding debt, servicing costs, and foreign-currency financing requirements remain unchanged,” Oxford Economics economist Alexander Venter said.
Ethiopia’s new data series draws on a recent agriculture census, household surveys and for the first time incorporates data from state-owned enterprises and non-profit institutions.
With the new estimates, the services sector—which includes transport and contributions from Africa’s biggest carrier Ethiopian Airlines—accounted for the largest share of the economy at almost 36%, followed by agriculture at 32% and industry at 30%.
Africa’s second-most populous country projects economic growth of 10.2% in the current fiscal year, boosted by a series of economic reforms aimed at attracting foreign investment and opening previously restricted sectors to international investors, including telecommunications and banking.
Two years ago, the authorities allowed a freely floating currency as part of an International Monetary Fund-backed economic reform programme.
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