Ethiopia has seen a dramatic increase in government revenue over the past seven years, Finance Minister Ahmed Shide said Thursday, attributing the gains to comprehensive economic reforms that have transformed the nation from macroeconomic stress to one of Africa’s fastest-growing economies.
Speaking at a press briefing, Shide said Ethiopia’s financial landscape seven years ago was characterised by high debt burdens, foreign-exchange shortages, and market instability. In response, the government implemented two successive Home-Grown Economic Reform programmes, establishing modern institutions and introducing innovative revenue mobilisation strategies.
“These reforms have enabled the country to transition from severe fiscal strain to robust economic growth, with increased efficiency and transparency in public finance,” the minister said.
According to the finance ministry, total government revenue has increased by 446 percent compared with 2010 levels, while tax revenue alone has risen by 400 percent. When including external sources, total revenue has grown roughly fivefold. Over the same period, Ethiopia has mobilised US$25 billion in external resources, helping to finance development projects and social programmes.
The report highlighted a shift in fiscal management, with a focus on poverty reduction and social investment. Budget allocations for poverty-focused sectors have quadrupled since 2010, reflecting the government’s efforts to align economic growth with inclusive development.
Shide also noted that the reforms have contributed to improved fiscal stability. The country’s deficit has been reduced from 2.5 percent of GDP in 2010 to 0.9 percent in 2017, a move the minister described as a sign of greater institutional efficiency and enhanced market confidence.
The Home-Grown Economic Reform programmes introduced measures to strengthen tax administration, modernise public financial management, and improve transparency in revenue collection. These reforms were complemented by initiatives to attract foreign investment, promote industrialisation, and expand the financial sector.
Economic analysts say Ethiopia’s progress in revenue mobilisation reflects a broader regional trend of countries implementing structural reforms to enhance domestic resource mobilisation and reduce dependency on external aid. The finance ministry’s figures show that Ethiopia is now better positioned to fund infrastructure, education, health, and social protection programmes domestically.
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Shide emphasised that maintaining fiscal discipline and improving revenue collection are essential to sustaining growth and funding national development priorities. “Our focus remains on building resilient institutions, expanding our tax base, and ensuring that economic gains translate into social benefits for all citizens,” he said.
Observers note that while Ethiopia has made substantial progress, challenges remain. These include ensuring equitable growth, managing inflationary pressures, and sustaining foreign investment inflows amid global economic uncertainty.
The minister’s announcement follows recent reports highlighting Ethiopia’s rapid economic expansion, driven by infrastructure development, industrialisation, and reforms aimed at improving business climate and governance. Experts say the country’s success demonstrates the potential of carefully implemented reform programmes to strengthen fiscal capacity and support sustainable development.
Ethiopia’s experience is being closely watched by other African nations seeking to replicate its model of combining domestic revenue mobilisation with strategic fiscal reforms to promote economic stability and inclusive growth.
