Contrasts in African Development

The Economies of Kenya and Ethiopia, 1975-1984

by Paul B. Henze

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This Note compares Kenyan and Ethiopian economic development during the crucial decade, 1975-1984. Both countries experienced basic changes in leadership during the period — Ethiopia in 1974 and Kenya in 1978. The military junta (Derg) that seized power in Ethiopia abandoned pro-Western policies with the aim of building a Marxist-Leninist economy and political structure; the new Kenyan leadership remained pro-Western. Although both suffered because of petroleum price increases, drought, food shortages, and military threats, Kenya emerged from the decade with good prospects for economic growth to accommodate its increasing population. Ethiopia, on the other hand, made no significant economic progress. The situation clearly demonstrated the superiority of Kenya's mixed economy, which emphasized private initiative and peasant agriculture, over Ethiopia's Marxist-Leninist system.

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