Africa

Ethiopia's wealth to grow at 5th fastest rate in BRICS

Abiy Ahmed, newly elected Prime Minister of Ethiopia, addresses the House of Parliament in Addis Ababa, after the swearing-in ceremony on April 2, 2018. (Photo: Zacharias Abubeker/ Getty Images/ AFP)

By Ibrahim Omar | Wednesday, January 31, 2024

Ethiopia’s wealth will grow 75 per cent between 2023 and 2024, according to the inaugural BRICS Wealth Report released Wednesday by London-based investment migration consultancy Henley & Partners.

Ethiopia is projected to record the fifth fastest wealth growth among countries in BRICS over the next 10 years, beating continental peers South Africa and Egypt.

Ethiopia’s wealth will grow 75 per cent between 2023 and 2024, according to the inaugural BRICS Wealth Report released Wednesday by London-based investment migration consultancy Henley & Partners.

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BRICS is an informal group of countries whose five original members were Brazil, Russia, India, China and South Africa but its membership has now grown to 10 following the admission of the United Arab Emirates (UAE), Egypt, Iran, Ethiopia and Saudi Arabia.

The report projected that India – the world’s most populous country - will record the fastest wealth growth in BRICS of 110 per cent over the next 10 years followed by oil titan Saudi Arabia, which is tipped to grow by 105 per cent.

The UAE, another leading oil producer, is projected to grow its riches by 95 per cent followed by China (85 per cent).

Russia – which is embroiled in a years-long war with Ukraine – and Iran, which is also under heavy US sanctions, are tipped to grow their wealth by the slowest pace of 25 per cent over the next decade.

The report has projected that Brazil will grow its wealth by 45 per cent, Egypt by 55 per cent while South Africa – whose economy is currently being dragged down by rolling power outages due to rationing – is projected to grow by 60 per cent over the same period.

“In January 2024, Brazil, Russia, India, China, and South Africa welcomed Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE into the BRICS bloc. The expanded group is increasing its share of global wealth, challenging the world order, and establishing itself as a powerful rival to the G7 and other international institutions,” ,” Henley & Partners said.

Ethiopia is currently the poorest country in BRICS with a wealth per capita of just $1,200. It is followed by Iran ($3,800), Egypt ($4,200), India ($6,800), Brazil ($10,400), South Africa ($11,200), Russia ($16,500) and China ($18,800).

In contrast, the richest country in the block – the UAE – has a wealth per capita of $103,500 and is followed by Saudi Arabia ($54,000).

The growth projections signal confidence in the long-term growth prospects of Ethiopia, whose population is 120.3 million.

One of the mega projects that is expected to propel the Horn of Africa country's growth is the Grand Ethiopian Renaissance Dam (GERD). The dam, which was built at a cost of $4.2 billion, is expected to generate more than 5,000 megawatts (MW) of electricity.

Revenue from the dam – which will generate electricity for both domestic and export use - is expected to lift millions of Ethiopians from poverty. Ethiopia is already exporting 200MW of power from the dam to Kenya.