THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Ethiopia

Ranked 132nd of 149

At a glance

Ranks

132 nd on the Legatum
Prosperity Index™

91st
132nd
115th
128th
128th
123rd
126th
120th
122nd

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Ethiopia performs best on Economic Quality and Governance and scores lowest on the Business Environment sub-index.

Visit our Rankings table to see how Ethiopia compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Ethiopia is a low-income country that is delivering as expected given its wealth. However, an analysis of the different sub-indices reveals uneven performances across them, with a significant surplus in the Economic Quality sub-index and minor gaps in others.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.

Special Analysis

Special Analysis

OVERALL

Over the last decade, Ethiopia has not changed much in terms of both ranking and delivery of prosperity given its wealth. The country has kept its position in the lowest part of the Index, with its prosperity limited in particular by low scores in the Business Environment, Health, and Education sub-indices.

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Areas of Success
Areas of Success

Ethiopia has the sixth biggest prosperity surplus in the Economic Quality sub-index given its wealth. This growth is the result of the expansion of the agricultural sector, the one in which the majority of the population is working. Also, this non-oil reliant economy can count on fertile land that produces valuable exports, such as coffee, to drive growth.

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Areas of Little Change
Areas of Little Change

Safety & Security, as well as Governance, are two sub-indices where Ethiopia has not changed particularly in its performance over the last decade. Unfortunately, both are ranked poorly, with Safety & Security at 123rd and Governance at 115th, and now the situation has even worsened with a declared state of emergency following massive protests in several parts of the country. The current refugee crisis is affecting Safety & Security, and improvement here depends on changing circumstances in Eritrea, Somalia, and (South) Sudan. It is estimated that Ethiopia is hosting the largest share of refugees of all Africa, becoming a microcosm of civil unrest and conflicts going on in the neighborhood.

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Areas of Improvement
Areas of Improvement

The main area for concern is Business Environment, where Ethiopia ranks 132nd and has posted a 19 rank decline over the last ten years, losing its once relatively significant prosperity surplus. This is due to difficult access to credit and electricity, as well as a private sector still being significantly under-developed. Another weak area for Ethiopia is the Health sub-index, although here the country has improved its ranking since 2007. While encouraging progress has been made in improving access to sanitation facilities, the country still has major deficiencies in terms of reaching out to the rural population and limiting the damage of infectious diseases.