1.1. Economic performance
As most of the writers agreed, the year 1992 witnessed a more liberalized government along with noteworthy policy and institutional reforms. For example, a variety of market-based reforms were introduced and a new socio-economic strategy was adopted. This strategy is known as Agriculture Led- Industrialization (ADLI) strategy and it was designed to generate broad-based growth and reduce poverty by stimulating farm output and rural incomes. The strategy primerly focuses on productivity enhancement of smallholder agriculture with the intervention of promoting improved technologies, credit services, development of rural infrastructure (MoFED, 2002, 2006). Since, socioeconomic reforms and interventions had a positive influence on development, growth and investment has taken off double-digit growth rates since 2003/04. The possible driving force for the growth was improvements in all sectors but mainly services and agricultural sectors contribution were dominant. As a result, Ethiopia become one of the robust growing economies with an average GDP growth rate of about 10% per annum in last decade (MoFED, 2002, 2006).
As to our finding using WDI data source (2018), GDP of the country was $7.3 billion in 1981, $13.4 billion in 1991, $32.4 billion in 2009 and recently reached $80.5 billion in 2017 (Figure 1). The possible reasons for miraculous performance record were right policy orientations and implementation with political will and commitment has contributed for its success story. A series of reforms were contributing not only to accelerate growth but to improve delivery of basic services, enhancing the country’s enviable ability to achieve a number of Millennium Development Goals (MDGs). Among notable reforms include liberalization of state enterprises and openness, which have begun attracting FDI.
1.2. Employment trends
According to authors finding (using WDI data source), the employment structure has changed steadily with time series. Accordingly, in Agriculture it decreased from 77.2 percent in 2010 to 68.2 percent in 2017, which is almost 11 percent reduction in shifts of labor. Whereas, there is an increment of employment engaged in service from 16.6 percent in 2010 to 22.4 percent in 2017. On the other hand, there is an increment of labor engaged in industry, though not significant. This is of course very limited contribution as compared to agriculture and service (Figure 2). However, due to establishment of recent manufacturing and agro-industrial parks at different regions it is expected that employment generation structure will be shifted to manufacturing. According to CSA (2005, 2013), as cited by Tadele and shiferw (2015) the proportion of employed labor has increased by 0.5 percentage points between 2005 and 2013. A plausible reason for a rise of the rates of employment can be related to the entrance in the labor market of a large number of youth who completed their education.
Recent studies indicate 15+ age employment to population ratio, is not significantly employee engaged in different employment generation sectors along different years. For example, employment to population ratio could be 79.3 percent in 2010 and 78.1 percent in 2017(Table 1). However, since this data is not including the cumulative unemployed labor forces, it seems like understated. From this result we can realize Ethiopia has still a lot to do with regard to employment generation for the newly coming fresh blood graduates and other labor in both urban and rural areas. Otherwise, the issue becomes the source of conflict among different ethnicity and thereby instability of political situation and economic stagnation will be a phenomenon in the country.
1.3. Status of poverty in Ethiopia
Documented literature has indicated that poverty reduction is one of key goals of development efforts in Ethiopia. Moser and Ichida (2001) showed that in African countries there was a noteworthy link between economic advancement and improvements in poverty situation. Ali and Thorbecke (1998) also found that rural poverty tended to be more responsive to growth than urban poverty, while the latter tended to be more responsive to changes in income distribution. Recent WDI data sources indicates that proportion of poverty headcount ratio at national poverty lines has decreased from 45.5 percent in 1995 to 23.5 percent in 2015, this is almost 48 percent poverty reduction in the country (Table 2).
1.4. Trends of Corruption
It is an obvious fact that corruption is widely seen in the globe as one of the biggest hindrance to economic growth, investment, and poverty reduction processes in developing contexts. Ethiopian government has identified sectors like land distribution, administration and facilitation payments are vulnerable to corruption than the other sectors. Public procurement is also seriously impeded by corruption, and different types of irregularities exist, such as non-transparent tender processes and awarding contracts to people with close connection to officials and ruling party.
According to transparency international (2018), it was reported that Ethiopia scored 34 points out of 100 on the 2018 Corruption Perceptions Index. Of course, corruption Index in Ethiopia averaged 29.28 Points from 2000 until 2018, reaching an all-time high of 35 Points in 2002 and a record low of 22 Points in 2005. In this regard, the recent data informed that Ethiopia is the 114 least corrupt nation out of 180 countries in the world (Figure, 4).