1. The annual progress report on the second year of GTP implementation has been prepared focusing on
economic growth, social development and good governance. The report presents the major achievements
and challenges of the GTP during the fiscal year 2011/12 in economic growth, social development and
good governance in details. Moreover, the report analyzes the consolidated progresses made in the last
two years in light of the GTP targets set for 2014/15, and thereby aims to provide insight into the
possibilities and challenges in terms of achieving the GTP goals.
2. During 2011/12, EthiopiD¶V HFRQRP\ DV PHDVXUHG E\ *URVV 'RPHVWLF 3URGXFW *'3 JUHZ E\
percent. Agriculture, Industry and Services grew by 4.9 percent, 13.6 percent and 11.1 percent
respectively. The rate of GDP growth registered in 2011/12 was slightly lower than the target set for the
fiscal year under review because of the short fall in the performance of agriculture and industry. The
growth registered in the fiscal year is, however, very high compared to the 5.3 percent of Sub Saharan
Africa average growth rate for the same period and the average GDP growth rate of 7 % required to
achieve the MDGs target of reducing poverty by half by 2014/15. It is noted also that this remarkable
growth performance has been achieved amidst global economic challenges.
3. In the first two years of GTP implementation, the GDP has grown on average by about 10 percent per
annum. This achievement is slightly lower than the 11.1 percent annual average growth rate target set
for the first two years of the GTP period and the 11.2 percent annual average growth rate target set for
the entire GTP period. This marginal difference can, however, be compensated in the remaining three
years of GTP period through accelerated growths of the agricultural and industrial sectors.
4. Economic growth registered in the last two years has enabled the country to maintain an average annual
economic growth rate of 11 percent over the last nine consecutive years between 2004 and 2012. In
order to sustain the rapid growth momentum and achieve the planned target, it is imperative to increase
the productivity of agriculture and expand investment in the industrial sector (particularly in
manufacturing industry) in the remaining years of GTP period
5. Economic growth which has been registered since 2003/04 in Ethiopia is rapid, broad-based and
effective in accelerating social development and reducing poverty. The 2004/05 Household Income
Consumption and Expenditure Survey (HICES) had shown that 38.7 percent of the population was
living under poverty. This figure has declined to 29.6 percent in 2010/11 and is estimated to further
decline to 27.6 percent in 2011/12 indicating that the rapid economic growth has indeed been pro-poor.
The achievements also indicate that by intensifying economic growth, the MDG goal of reducing
poverty by half (to 22.2 per cent) by 2015 is achievable. The rapid and broad based economic growth
which has been registered in the last nine years has also generated new job opportunities. Accordingly,
in urban areas unemployment rate has declined from 18.9 per cent in 2009/10 to 18 per cent in 2010/11
and further to 17.5 per cent in 2011/12. In the same period, delivery of basic services such as education,
health, drinking water, transport, etc. has expanded significantly. The achievements in this regard
indicate that by sustaining the economic growth and strengthening the implementation of the
undergoing social and economic programs, it is possible to achieve most of the social development
MDG goals by 2015.