Agriculture is Ethiopia's economic base and
accounts for almost a third of GDP. Apart from the
processing of agricultural products, other industries
are of no greater importance. Despite strong economic
growth since 2004, Ethiopia remains one of the world's
poorest and most aid-dependent countries.
GDP growth has been around 10 percent for one and a
half decades, which means that the economy is one of the
fastest growing in Africa. This has enabled investments
in education, poverty reduction and infrastructure
projects. However, high transport costs and political
unrest in the country and in the region are hampering
economic development. Several construction projects are
underway to improve the roads to ports in the coastal
country's neighboring countries.
Major imports by Ethiopia, covering a full list of top products imported by the country and trade value for each product category.
Three out of four residents depend on agriculture for
their livelihood. The majority are found in the informal
economy and grow mainly for self-catering. The market
for consumer goods is small; household income mostly
goes to food.
Agriculture also accounts for the majority of
exports. The coffee dominates, although oil plants
nowadays bring in almost equal revenue. This is not
least due to the sale of sesame seeds to China, which
has become Ethiopia's largest trading partner. The
mildly narcotic plant khat is mainly sold to Somalia and
Djibouti. Leather and leather goods are also important
export goods, as are gold, sugar and cut flowers.
Imports are significantly larger than exports.
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including ETH which represents the country of Ethiopia. Check findjobdescriptions to learn more about Ethiopia.
Drought and mist growth threaten
Agriculture is old-fashioned and on a regular basis
the country suffers from drought and famine. Even during
years of normal weather conditions, many Ethiopians,
especially children, have too little to eat. The last
truly major famine disaster, 1984–1985, claimed a
million lives. Since then, international weather systems
for weather disasters have been built up. Thus,
preventive relief efforts can be put in place before the
drought leads to full-scale famine. Nevertheless,
millions of people needed emergency assistance when
severe drought occurred in 2011, 2015, 2016 and 2017. In
2015, every third Ethiopian got too little to eat.
Even during years of normal harvests - and despite
the good growth - Ethiopia needs external aid and loans
to bring the economy together. The EU and the US are
Ethiopia has a large external debt, even though it
was included in the World Bank's debt-relief program for
heavily indebted poor countries (HIPC) from the
beginning of the 2000s. This resulted in the
cancellation of loans to individual lenders. Ethiopia
also became one of the 18 countries that in 2005 were
granted full write-off of debts to the World Bank, the
IMF and the African Development Bank. The decision was
made by G8, the world's seven richest industrialized
countries, and Russia. Since then, foreign debt has
The EPRDF government, which has been in power since
1991 (see Modern History), invested from the beginning
on opening up the economy and has implemented some
deregulation and privatization. In the beginning of the
2010s, the government again strengthened its influence
over the business sector, which risked discouraging
foreign investors. Privatization was also slow: of
eleven state-owned companies that were offered in 2014,
only five attracted stakeholders and only three were
ultimately approved for sale.
New reform agenda
When the Abiy government came to power in the spring
of 2018, a series of economic reforms and privatization
plans were launched, again with the aim of attracting
foreign companies to invest. Companies in civil
aviation, shipping, the energy sector, the sugar
industry and telecommunications were intended to be sold
out. However, the violent domestic political conflicts
(see Current policy) have contributed to the fact that
interest has remained limited and that the economy must
therefore be driven by public initiatives.
At the end of 2019, the IMF granted a $ 2.9 billion
three-year aid package to help the Abiy government
implement the planned economic reforms. The World Bank
pledged $ 3 billion in financial aid, and Abiy said a
further $ 9 billion would come from other lenders,
including the European Development Bank and UN agencies.
Earlier, money had come from Middle Eastern countries,
such as $ 3 billion from Abu Dhabi.
Ethiopia has a major shortage of foreign currency.
The country needs to restructure a number of state-owned
companies and make the financial sector more stable.
High inflation is also a problem, as is a rapidly rising
FACTS - FINANCE
GDP per person
US $ 772 (2018)
US $ 84,355 million (2018)
6.8 percent (2018)
Agriculture's share of GDP
31.1 percent (2018)
Manufacturing industry's share of GDP
5.8 percent (2018)
The service sector's share of GDP
36.5 percent (2018)
14.6 percent (2019)
Government debt's share of GDP
61.0 percent (2018)
US $ 26,562 M (2017)
US $ 3,030 million (2017)
US $ 14,235 million (2017)
- US $ 5 566 million (2017)
Commodity trade's share of GDP
21 percent (2018)
Main export goods
coffee, oilseeds, live animals, leather goods, gold,
pearls, precious stones (2017)
Largest trading partner
China, USA, Somalia, India, Saudi Arabia, Germany,
Tough punishment for suspected coup makers
Judgments fall against the suspected Ginbot members who are charged with
plans to overthrow the government (see April 2009). Five
receive the death penalty and 33 life imprisonment. Four of those sentenced to
death are in exile, including Ginbot leader Berhanu Nega.
The UN decides on damages
The UN commission commissioned to investigate the debt and damages issue
following the war against Eritrea is ordering Ethiopia to pay close to US $ 164
million to Eritrea. At the same time, Eritrea will pay $ 174 million to
Ethiopia. Although the decision represents a "net profit" for Ethiopia, the
government rejects the decision.
New law against terrorism faces criticism
Parliament adopts a new anti-terror law with vague definitions of terrorism.
Human rights groups fear that the law can be used to restrict human and civil
Several arrested for suspected coup attempt
About 40 people, including several army officers, are arrested on suspicion
of sabotage plans and overthrowing the government. They are accused of belonging
to the banned group Ginbot 7 ("May 15", which refers to Election Day 2005).
Ginbot 7 is led by Berhanu Nega, who was elected mayor of Addis Ababa in 2005
but never took office and now lives in a country escape in the United States.
New law makes it difficult for voluntary organizations
A new law is adopted which means that non-profit organizations (so-called
NGOs) find it difficult to operate in Ethiopia. Organizations that receive more
than a tenth of their money from abroad can no longer work on issues related to
human rights, conflict resolution, the judiciary or children's and women's