Is Ethiopia’s economy bigger than its neighbors combined?

Ethiopian Prime Minister Abiy Ahmed claimed that Ethiopia’s economy was the second largest in East Africa five years ago and is now bigger than those of its neighboring countries combined.

Abiy assumed power in April 2018 following widespread protests, pledging economic and political reforms to foster prosperity and democratization. The Ethiopian government, led by the Prosperity Party, contends that the reforms have significantly improved the country.

The PM has repeatedly asserted that Ethiopia is on the right economic trajectory and the economy is growing. Recently, he claimed that Ethiopia’s GDP doubled within the last five years.

In a recent speech delivered to summer students at the Artificial Intelligence Institute, PM Abiy told the students that Ethiopia is growing. The comparison of Ethiopia’s economy with its neighbors was used to support his argument that Ethiopia and its economy are growing.

As PM Abiy claimed, Ethiopia’s economy, measured by nominal GDP, was the second largest in East Africa after that of Kenya five years ago. In 2018, Ethiopia’s nominal GDP, according to the National Bank of Ethiopia, was 84.4 billion USD, and Kenya’s nominal GDP, according to the Central Bank of Kenya, was 91.2 billion USD.

Five years later, in 2022, Ethiopia’s nominal GDP was 126.8 billion USD, and Kenya’s nominal GDP stood at 119.5 billion USD. Thus, as measured by nominal GDP, Ethiopia’s economy is the largest in East Africa.

However, the claim by Prime Minister Abiy Ahmed that Ethiopia’s economy is even bigger than that of its neighbors combined is false.

Ethiopia is bordered by six internationally recognized countries: Somalia, Kenya, South Sudan, Sudan, Eritrea, and Djibouti, and one de facto sovereign state, Somaliland.

According to the World Bank, Sudan’s nominal GDP in 2022 was 51.7 billion USD. Accordingly, if we combine the nominal GDPs of Kenya and Sudan, they are much bigger than those of Ethiopia (171.2 billion versus 126.8 billion).

The latest data for the nominal GDPs of Sudan, South Sudan, Eritrea, Djibouti, Somaliland, and Somalia are not available online through their respective central banks or statistics agencies. Therefore, we must rely on data from other international financial institutions, such as the IMF, for our purposes.

The International Monetary Fund (IMF) reported the nominal Gross Domestic Product (GDP) figures for several countries in the Horn of Africa for the year 2022. These figures are as follows: Ethiopia’s GDP stood at USD 120.37 billion, Kenya’s at USD 113.7 billion, Sudan’s at USD 33.75 billion, Somalia’s at USD 10.42 billion, South Sudan’s at USD 8.54 billion, and Djibouti’s at USD 3.66 billion. It is important to note that the IMF’s data does not include information on Eritrea and Somaliland for the specified year.

Therefore, the combined nominal GDPs of Ethiopia’s five neighboring countries (excluding Eritrea and Somaliland) in 2022 was 170 billion USD, surpassing Ethiopia’s 120.37 billion USD.

In summary, despite Ethiopia having the largest nominal GDP in East Africa, Prime Minister Abiy’s claim that Ethiopia’s economy is larger than its neighbors combined is found to be false based on economic data from 2022.

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