Ethiopia has moved into Africa’s five largest economies, overtaking Morocco after a major revision of its national economic statistics lifted its measured gross domestic product (GDP) to $210.7 billion, Cape {town} Etc reports.
Reportedly, the development puts the East African country alongside South Africa, Egypt, Nigeria and Algeria in the continent’s top economic rankings, adding a new dimension to the competition among Africa’s biggest economies.
However, the jump in Ethiopia’s economic standing comes largely from a change in how its economy is measured, rather than a sudden surge in actual economic activity.
A bigger economy on paper
Ethiopia’s Ministry of Finance reportedly revised its national accounts to better reflect the country’s changing economic landscape, increasing its estimated GDP for the 2024/25 fiscal year to $201.4 billion. This estimation represents an increase of approximately 59% compared with the previous estimate.
The revised figures also put the economy at $210.7 billion for the fiscal year ending in July 2026. Finance Minister Fitsum Assefa said the previous statistical baseline, which dated back to 2015/16, no longer reflected the scale and diversity of the country’s economy.
The updated calculations take greater account of emerging industries, including digital finance and services, as well as information from state-owned businesses and non-profit organisations.
The government has also incorporated findings from a recent agricultural census, household surveys and other economic records to produce a more comprehensive picture of national output.
How Ethiopia compares with Africa’s biggest economies
The revised figures place Ethiopia ahead of Morocco in the continental rankings. South Africa remains in the leading position, with an estimated GDP of $489.1 billion, followed by Egypt at $442.9 billion, Nigeria at $386.7 billion and Algeria at $331.9 billion.
Ethiopia’s new $210.7 billion estimate puts it fifth, highlighting the growing economic weight of countries outside the continent’s traditional leading markets. The country’s services industry makes the largest contribution to its economy, accounting for almost 36% of GDP. Agriculture contributes approximately 32%, while industry makes up around 30%.
Transport is an important part of the services sector, with Ethiopian Airlines among the country’s significant economic players.
What the revised figures mean
The statistical adjustment could also improve some of Ethiopia’s headline debt indicators. Oxford Economics noted that a larger GDP figure would mechanically lower the country’s debt-to-GDP ratio, potentially making its debt position appear more sustainable as it continues restructuring loans under the G20 Common Framework.
However, a bigger GDP calculation does not mean the government has less debt or that its repayment obligations have disappeared.
‘Outstanding debt, servicing costs, and foreign-currency financing requirements remain unchanged,’
– Alexander Venter, Oxford Economics economist.
This is a significant distinction, as GDP rebasing changes the denominator used in debt calculations without reducing the actual amount owed. South Africa underwent a similar statistical revision in November 2026, resulting in changes to its reported debt ratios.
Reforms underpin Ethiopia’s ambitions
Beyond the revised statistics, Ethiopia is pursuing an ambitious programme of economic reforms aimed at attracting investment and expanding private-sector participation. The government is targeting economic growth of 10.2% in the current fiscal year, supported by changes intended to open previously restricted industries to international investors.
Telecommunications and banking are among the sectors being opened to greater foreign participation. The country also introduced a freely floating currency two years ago as part of an economic reform programme backed by the International Monetary Fund.
While the latest ranking does not mean Ethiopia has suddenly produced more wealth than Morocco or experienced a 59% economic boom, it does highlight how much national accounting methods can influence the way countries are compared.
Ultimately, the revised figures offer a more detailed picture of Ethiopia’s economy, while its ability to sustain growth, attract investment and manage debt will determine how much of that economic potential translates into lasting prosperity.
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