Ethiopia has surpassed Morocco to become the fourth largest economy in Africa, with a Gross Domestic Product (GDP) of $210.7 billion for the 2025/2026 financial year. This new figure was announced by the Ethiopian government after a comprehensive review of the country's economic calculation methodology. The review was conducted to include previously underrepresented economic activities, such as digital financial services, modern trade, and industry and mining.
According to data from the World Bank, Morocco's GDP was approximately $182.37 billion in 2025. This puts Ethiopia's economy above that of Morocco. The Ethiopian government has revised its GDP upward by 59.2% for the 2024/2025 financial year, to $201.42 billion, after adopting a new reference year and including previously unaccounted economic activities.
The revised GDP figures have significant implications for Ethiopia's ranking among African economies. The country now ranks fourth, behind South Africa, Egypt, Nigeria, and Algeria. Morocco, on the other hand, ranks sixth, followed by Kenya. Algeria's GDP is estimated to be around $332 billion, a significant difference of over $149 billion compared to Morocco.
The revision of Ethiopia's GDP is not a reflection of actual economic growth, but rather a change in methodology. The new figures aim to provide a more accurate representation of the country's economy. According to Berkit Fesihasion, Minister of National Strategy, the updated national accounts will provide a clearer picture of the economy and help improve development planning and economic policy-making.
The Ethiopian government hopes that the revised GDP figures will improve the country's debt sustainability, enhance domestic resource mobilization, and provide more accurate indicators for investors and international financial institutions. This move comes as African economies compete for investment and seek to strengthen their positions on the continent's economic map.
Ethiopia's economic growth has been driven by various sectors, including agriculture, industry, and services. The country's strategic location and large population make it an attractive destination for investors. The revised GDP figures are expected to boost investor confidence and attract more foreign investment to the country.
The International Monetary Fund and other international financial institutions have welcomed Ethiopia's move to revise its GDP figures. The revised figures are seen as a positive step towards improving the country's economic transparency and accountability. Ethiopia's economic growth is expected to continue in the coming years, driven by ongoing reforms and investments in key sectors.
Key points
- Ethiopia's GDP has been revised upward to $210.7 billion for the 2025/2026 financial year.
- Morocco's GDP was approximately $182.37 billion in 2025.
- Ethiopia now ranks fourth among African economies, behind South Africa, Egypt, Nigeria, and Algeria.
