Ethiopia Threshold Program - Constraints Analysis

MCC’s evidence-based approach to its investments begins with a mutual understanding of a country’s main growth challenges. During the first phase of the compact or threshold program development process, MCC and the selected partner country, jointly conduct a constraints-to-growth analysis (CA). This analysis identifies the constraints to private investment and entrepreneurship that are most binding to economic growth in the country. The results of this analysis enable the country, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.

The Constraints Analysis Report for the Ethiopia Threshold Program highlights the country's shortage of foreign exchange as the top binding constraint to the nation's economic growth. Additional, though less binding, constraints appear in the power sector and access to finance.