The landmark of good governance in order to bring sustainable development in Ethiopia was the ratification of 1995 Federal Democratic Republic of Ethiopia (FDRE) constitution. Within this constitution, the individual and group rights of people were protected, indicators of good governance was identified and mentioned and recognitions for different institutions were given. Even though the constitution was drafted with different rights, the implementation was not as much as it was expected. In order to bring sustainable development, good governance is so important. To conduct the study only secondary data were used. Different relevant data’s on the issues were systematically collected from books, magazines, newspapers, internet, articles, journals, and different report. However those data were critically reviewed and analyzed. Good governance is the precondition for sustainable development. In this paper, the researcher tried to identify the indicator of good governance such as legitimacy of the government, community participation, local empowerment, accountability, transparency, democratic institutions and freedom of media. Different challenges of good governance were identified. These are excessive poverty, population growth and high unemployment combined with a high incidence of HIV/AIDS. Fallow opportunities such as improper utilization of natural resources, lack of proper utilizations of different democratic institutions were also identified. Different measures were taken to overcome those challenges. The strategies such as government and institutions should work together, devise ways and means of sharing of national wealth, avoid failed state, insure discipline and organization, encourage culture of completion and innovation and fight corruption. These strategies are adopted by government, institutions, non state actors and individual members.
Key words: Good governance, sustainable development, linkage.
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