[Ethiopia] May end poverty at current growth rate

from Reuters Alert Net

By Tsegaye Tadesse

ADDIS ABABA - Ethiopia, one of the world's most needy countries, said on Wednesday it could end extreme poverty if it kept up the healthy 7 percent economic growth of the last three years.

Finance Minister Sufian Ahmed told journalists that sub-Saharan Africa's second most populous nation could jump to the ranks of middle-income nations if current growth was sustained through coming decades.

The drought-prone Horn of Africa country suffers periodic famines, leaving millions dependent on food aid to survive.

"For the first time, Ethiopia's economy has shown an average of seven percent growth over the last three years," Sufian said.

"If the trend continues for the next 20 years, Ethiopia would come out of poverty and be among middle-income nations."

Poverty in Ethiopia took global centre-stage on July 13, 1985, when Irish rock singer Bob Geldof organised charity concerts around the world, raising $245 million in emergency aid for one of its worst ever famines.

But problems have persisted. And Ethiopia is among the countries most affected by this year's drought across east Africa.

Sufian said broad-based economic growth led by a boom in Ethiopia's key agricultural exports would raise living standards. Eighty five percent of Ethiopia's 72 million people live off agriculture.

"The agriculture sector registered a 17.3 percent growth in 2004, while surveys indicate that the sector will register 12.2 percent and 10.5 percent growth in 2005 and 2006, respectively," he said.

Thanks to a boom in coffee prices, Africa's leading coffee producer generated $340 million from 140,000 tonnes of exports in the 2004/05 season, Sufian said.

The country earned over $112 million from exporting oil seeds during the six months from July last year to January 2006, while 193,000 tonnes of sugar exported to Europe last year grossed $108.7 million.

Sufian added that flower farms had become a flourishing business in Ethiopia in the past five years, with the industry's export earnings set to grow to $100 million this year.

He said Ethiopia has benefited from debt cancellation amounting to $9.2 billion over the past 15 years.

But he added that it also needs foreign aid and loans to build roads and hydro-power plants, which take up 10 to 20 percent of the government budget.