But Gates warned that progress could be undone by instability, pointing to northern Nigeria, where attacks by Boko Haram extremists have derailed efforts to eradicate polio.
"This Boko Haram disruption is the one real cloud on the horizon, where it means there are groups of children that we're not able to get to," he told reporters after receiving his award.
Gates -- the world's richest man -- and his wife are the co-founders of the Bill and Melinda Gates Foundation, which tackles health and poverty in Africa.
"The rise of this continent... will definitely benefit from the leaders here in Ethiopia, and across Africa, opening up and learning from each other, as well as from their people," he said in a speech at Addis Ababa University.
Gates, dressed in a black and red robe, received his degree from Ethiopia Prime Minister Hailemariam Desalegn, who also called agriculture and health "critical elements" for his country's plan to reach "middle income status in the next decade."
- Aid to support trade -
Africa is home to seven of the world’s fastest growing economies, but Gates said real growth can only be measured through improvements in basic human needs, namely health and nutrition.
"By reducing the rates of malnutrition and premature mortality you can achieve the productivity levels that will lead not only to self-sufficiency, but also to middle income status," Gates said.
He singled out Ethiopia, Liberia and Tanzania for gains in cutting overall mortality rates, and said Zambia was leading the way in curbing malaria, which kills over 600,000 people globally each year.The Bill and Melinda Gates foundation has spent over $30 billion (22 billion euros) on programs in over 100 countries since it was set up in 2000.
Gates said that while a boost in private investment in Africa from outsiders such as China and India is a sign of real progress, he insisted aid programs cannot be replaced.
"Trade will be huge, and that's a sign of success. The goal of aid should be to create an environment for trade," he said.
Gates is the founder and former chief of Microsoft, and is currently the wealthiest man on the planet with a net worth of over $80 billion (59 billion euros), according to Forbes.
He dropped out of Harvard College in the US to found his company, which remains one of the world's largest technology firms.
"I never got a real degree, I dropped out of school because I was hungry to start Microsoft and I never got a chance to go back," he said.
"To be able to add this diploma on the wall... will be a great relief to my father."
Gates has previously received several honourary degrees from universities across the world.