Ethiopia is a
predominantly rural and young society. The average age is 59, and 84% of the
population lives mainly in densely populated highland settlements. It is also
one of the poorest countries in the world, with 38.7% of the population being
below the poverty line in the year 2004. In the year 2011-2012, Ethiopia
accounted $31.7 billion of GDP. The recently achieved annual growth rate is
11.4%, which, if achieved would allow the nation to achieve its poverty
reduction millennium development goal by 2015. Ethiopia is rich in natural
resources, but they are underexploited. According to government’s recent survey
in 2000, the country has natural resources like copper, platinum, gold, potash,
salt, natural gas. However, the few and small industrial firms working on these
resources are not capable currently of competing globally and exploiting those
resources in a way sufficient to help the country.
Agriculture accounts
for almost half of GDP and more than 90 percent of export earnings. However,
the share of agriculture is declining steadily whereas the share of the service
sector in GDP is rising. On the other hand, the share of the manufacturing
sector has been relatively static at between only 13 and 14 percent. Despite
the fact that the history of the growth performance was poor in the past, the
country has experienced strong economic growth in the current period (especially,
since 2003/04). According to Ncube, Lufumpa and Ndikumana (2010) real GDP growth
averaged 11.2 % per annum during the 2003/04 and 2008/09 period, placing
Ethiopia among the top performing economies in sub Saharan Africa. This growth
performance well exceeded the population growth rate and the 7 percent rate
required for attaining the Millennium Development Goals of halving poverty by
2015.
This study tries to
project the degree of effectiveness of foreign aid on Ethiopia in the struggle
to accomplish the Millennium development Goals. In addition to government’s
commitment and dedication in combating the challenges, what is the contribution
and extent of foreign aid is the focus of this research paper. Similarly, it
tries to show the amount of foreign aids implemented so far in order to realize
the strategies and achieve the goals so far. Therefore, the paper mentions only some of the
Millennium Development Goals and the amount of money spent for each goals to
effectively implement and the failures if found will be projected.
