EEA Says Ethiopia’s Next Reform Challenge Is Turning Growth Into Jobs

Ethiopia’s economic reforms have stabilized key macroeconomic indicators, but the country’s next challenge will be ensuring that growth translates into jobs, higher household incomes, and improved living standards, the Ethiopian Economic Association (EEA) has warned.

Speaking at the Association’s 23rd Annual Conference on Friday, EEA President Professor Tassew Woldehanna said the success of Ethiopia’s reform agenda should be judged by its impact on people’s lives rather than by economic statistics alone.

“The real measure of reform is whether it creates productive employment, reduces poverty, raises household incomes, and delivers better public services,” he said.

The remarks come as Ethiopia reports improving economic fundamentals following two years of wide-ranging reforms, including the adoption of a market-based foreign exchange regime, tighter monetary policy, fiscal consolidation, and progress under its IMF-supported reform programme.

Government officials say these measures have strengthened economic stability. Finance Minister Ahmed Shide told the conference that tax revenue has increased significantly over the past two years, foreign exchange reserves have improved, and the economy is expected to grow by 10.2 percent during the current fiscal year.

He also highlighted progress in external debt restructuring and ongoing reforms aimed at improving public finances and restoring investor confidence.

Despite these gains, the EEA cautioned that many households have yet to experience the benefits of the country’s macroeconomic recovery.

Although inflation has moderated compared with previous years, consumer prices remain elevated. Annual inflation stood at 13.4 percent in May, while food and transport costs continued to outpace overall price growth, placing sustained pressure on household purchasing power.

The EEA argued that maintaining macroeconomic stability alone is insufficient unless reforms generate broad-based employment, especially with nearly two million young Ethiopians entering the labour market annually.

To achieve this, creating productive jobs should be the central focus of the next reform phase, supported by modernizing agriculture, strengthening manufacturing competitiveness, and expanding higher-value service industries.

The EEA identified institutional capacity as a critical factor for reform success, warning that ambitious programs underperform without strong coordination, implementation capacity, and clear responsibilities.

The Association also recommended integrating social protection into the reform agenda to help vulnerable households manage short-term adjustment costs, noting that targeted support for low-income families, women, youth, and shock-affected communities improves reform inclusiveness and sustainability.

The conference convened senior government officials, economists, researchers, and development partners to evaluate Ethiopia’s ongoing reform program and medium-term economic outlook.

While acknowledging recent progress, the EEA emphasized that sustaining public support ultimately depends on economic growth delivering tangible improvements in jobs, incomes, and quality of life for ordinary Ethiopians.