An assessment of the Ethiopian economy indicates poor performance of the commodityrnproducing sector most notably agriculture, low domestic sayings, weak private investment,rnextremely low foreign investment inflow, deterioration of living standards, unemploymentrnand poor social and physical infrastructure.rnThis paper looks into the performance of the Ethiopian economy over the period 1971172-rn1994/95. Looking into the empirical determinants of the Ethiopian economic growth (orrnthe likely causes of the inadequate long term record growth) during 1968-1995 the resultrnindicates that growth of population, share of government consumption to GDP, and growthrnin money supply affect GDP per capita growth negatively. Variables as lagged ratio ofrnagricultural output to real GDP, real export growth, percentage change in real effectivernexchange rate, and share of real trade balance in real GDP on economic growth are foundrnto be a significant contributing factors for the economic growth. In contrast growth ofrncapital formation (substantially dominated by government investment), and human capitalrnshowed no evidence that explains at least the poor growth performance, which may bernattributed to the measurement problems.rnThe paper further concludes that the specification for testing the possible export growthrnnexus through its direct and beneficial externality effects on the rest of the economy hasrnshown no evidence and has no satisfactory explanatory power.rnIt follows that policies that favorably affect the agricultural sector; reduce governmentrnconsumption (with out reducing government investment); maintain external competitiveness;rnimprove real effective exchange rate; create conducive environment for private sectorrninvestment, foreign capital inflow, and export diversification; slow population growth, andrnencourage human capital development are found to be important