Economic overview Ethiopia, in 36 editions.

Ethiopia is one of the poorest and least developed countries in Africa. Its economy is based on subsistence agriculture, which accounts for about 45% of GDP, 90% of exports, and 80% of total employment; coffee generates over 60% of export earnings. The manufacturing sector is heavily dependent on inputs from the agricultural sector. The economy is centrally planned, and over Over 90% of large-scale industry industry, but less then 10% of agriculture, is state run. Favorable agricultural weather largely explains the 4.5% growth in output in FY89.

Ethiopia is one of the poorest and least developed countries in Africa. Its
economy is based on subsistence agriculture, which accounts for about 45% of
GDP, 90% of exports, and 80% of total employment; coffee generates 60% of
export earnings. The manufacturing sector is heavily dependent on inputs
from the agricultural sector. Over 90% of large-scale industry, but less then
than 10% of agriculture, is state run. run; the government is considering selling
off a portion of state-owned plants. Favorable agricultural weather largely
explains the 4.5% growth in output in FY89. FY89, whereas drought and
deteriorating internal security conditions prevented growth in FY90. In 1991
the lack of law and order, particularly in the south, interfered with
economic development and growth.

With the independence of Eritrea on 27 April 1993, Ethiopia is continues to
face difficult economic problems as one of the poorest and least developed
countries in Africa. Its (The accompanying analysis and figures predate the
independence of Eritrea.) Its economy is based on subsistence agriculture,
which accounts for about 45% of
GDP, 90% of exports, and 80% of total
employment; coffee generates 60% of
export earnings. The manufacturing
sector is heavily dependent on inputs
from the agricultural sector. Over 90%
of large-scale industry, but less
than 10% of agriculture, is state run; the
government is considering selling
off a portion of state-owned plants.
Favorable agricultural weather largely
explains the 4.5% growth in output in
FY89, whereas drought and
deteriorating internal security conditions
prevented growth in FY90. In 1991
the lack of law and order, particularly in
the south, interfered with
economic development and growth. In 1992, because
of some easing of civil strife and aid from the outside world, the economy
substantially improved.

With the independence of Eritrea on 27 April 1993, Ethiopia continues to
to face difficult economic problems as one of the poorest and least developed
developed countries in Africa. (The accompanying analysis and figures
predate the
independence of Eritrea.) Its economy is based on
subsistence agriculture,
which accounts for about 45% of GDP, 90% of
exports, and 80% of total
employment; coffee generates 60% of export
earnings. The manufacturing
sector is heavily dependent on inputs from
the agricultural sector. Over 90%
of large-scale industry, but less
than 10% of agriculture, is state run; the
government is considering
selling off a portion of state-owned plants.
Favorable agricultural
weather largely explains the 4.5% growth in output in
FY89, whereas
drought and deteriorating internal security conditions
prevented
growth in FY90. In 1991 the lack of law and order, particularly in
the
south, interfered with economic development and growth. In 1992, because
because of some easing of civil strife and aid from the outside world,
the economy
substantially improved.

With the independence of Eritrea on 27 April 1993, Ethiopia continues
continues to face difficult economic problems as one of the poorest
and least
developed countries in Africa. (The accompanying analysis and figures
predate the independence of Eritrea.) Its economy is based on
subsistence agriculture, which accounts for about 45% of GDP, 90% of
exports, and
80% of total employment; coffee generates 60% of export
earnings. The
agricultural sector suffers from frequent periods of drought, poor
cultivation practices, and deterioration of internal security
conditions. The manufacturing sector is heavily dependent on inputs from
from the agricultural sector. Over 90% of large-scale industry, but less
less than 10% of agriculture, is state run; the run. The government is considering
considering selling off a portion of state-owned plants. Favorable agricultural plants, and is
weather largely explains implementing reform measures that are gradually liberalizing the 4.5% growth in output in FY89, whereas
drought and deteriorating internal security conditions prevented
growth in FY90. In 1991 economy. A major medium-term problem is the lack improvement of law and order, particularly in the roads,
south, interfered with economic development water supply, and growth. In 1992,
because other parts of some easing an infrastructure badly neglected
during years of civil strife and aid from the outside world,
the economy substantially improved. strife.

With the independence of Eritrea on 27 April 1993, Ethiopia
continues to face difficult economic
problems as one of the poorest
and least developed countries in
Africa. Its economy is based on
agriculture, which accounts for
about 45% half of GDP, 90% of exports, and
80% of total employment;
coffee generates 60% of export earnings. The
agricultural sector
suffers from frequent periods of drought, poor
cultivation
practices, and deterioration of internal security
conditions. The
manufacturing sector is heavily dependent on inputs
from the
agricultural sector. Over 90% of large-scale industry, but
less than
10% of agriculture, is state run. state-run. The government is
considering
selling off a portion of state-owned plants, plants and is
implementing
reform measures that are gradually liberalizing the
economy. A major
medium-term problem is the improvement of roads,
water supply, and
other parts of an infrastructure badly neglected
during years of
civil strife.

Ethiopia continues to face difficult economic
problems as one of the poorest and least developed countries in the
Africa. world. Its economy is based on agriculture, which accounts for more
about than half of GDP, 90% of exports, and 80% of total employment;
coffee
generates 60% of export earnings. The agricultural sector
suffers from
frequent periods of drought, poor cultivation
practices, and
deterioration of internal security conditions. The
manufacturing
sector is heavily dependent on inputs from the
agricultural sector.
Over 90% of large-scale industry, but less than
10% of agriculture, is
state-run. The government is considering
selling off a portion of
state-owned plants and is implementing
reform measures that are
gradually liberalizing the economy. A major
medium-term problem is the
improvement of roads, water supply, and
other parts of an
infrastructure badly neglected during years of
civil strife.

Ethiopia continues to face difficult economic
problems as remains one of the poorest and least
developed countries in the
world. Its economy is based on agriculture,
which accounts for more
than half of GDP, 90% of exports, and 80% of
total employment; coffee
generates 60% of export earnings. The
agricultural sector suffers from
frequent periods of drought, poor
cultivation practices, and
deterioration of internal security
conditions. The manufacturing
sector is heavily dependent on inputs
from the agricultural sector.
Over 90% of large-scale industry, but
less than 10% of agriculture, is
state-run. The government is
considering selling off a portion of
state-owned plants and is
implementing reform measures that are
gradually liberalizing the
economy. A major medium-term problem is the
improvement of roads,
water supply, and other parts of an
infrastructure badly neglected
during years of civil strife.

Ethiopia remains one of the poorest and least
developed
countries in the world. Its economy is based on agriculture,
which
accounts for more than half of GDP, 90% of exports, and 80% of
total
employment; coffee generates 60% of export earnings. The
agricultural sector suffers from frequent periods of drought, poor
cultivation practices, and deterioration of internal security
conditions. The manufacturing sector is heavily dependent on inputs
from the agricultural sector. Over 90% of large-scale industry, but
less than 10% of agriculture, is state-run. The government is
considering selling off a portion of state-owned plants and is
implementing reform measures that are gradually liberalizing the
economy. A major medium-term problem is the improvement of roads,
water supply, and other parts of an infrastructure badly neglected
during years of civil strife. Renewed fighting with Eritrea dims
economic prospects for 1999.

Ethiopia's economy is based on agriculture, which accounts for half of GDP, 90% of exports, and 80% of total employment. The agricultural sector suffers from frequent periods of drought and poor cultivation practices, and as many as 4.6 million people need food assistance annually. Coffee is critical to the Ethiopian economy, and Ethiopia earned $267 million in 1999 by exporting 105,000 metric tons. According to current estimates, coffee contributes 10% of Ethiopia's GDP. More than 15 million people (25% of the population) derive their livelihood from the coffee sector. Other exports include live animals, hides, gold, and qat. In December 1999, Ethiopia signed a $1.4 billion joint venture deal to develop a huge natural gas field in the Somali Regional State. The war with Eritrea has forced the government to spend scarce resources on the military and forced the government to scale back ambitious development plans. Foreign investment has declined significantly. Government taxes imposed in late 1999 to raise money for the war will depress depressed an already weak economy. The war has forced the government to improve roads and other parts of the previously neglected infrastructure, but only certain regions of the nation have benefited. Recovery from the war is mostly contingent on natural factors. A drought has continued into the end of 2000 and food relief is expected to be needed through mid-2001 at least. Ethiopia may receive Highly Indebted Poor Countries (HIPC) debt relief by the end of the year.

Ethiopia's poverty-stricken economy is based on agriculture, which accounts for half of GDP, 85% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices, and as many as 4.6 million people need food assistance annually. practices. Coffee is critical to the Ethiopian economy with exports of some $260 $270 million in 2000. Other important exports include qat, live animals, hides, and gold. 2000/01, but historically low prices have seen many farmers switching to qat to supplement their income. The war with Eritrea in 1999-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001 Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Despite this limitation, strong Strong growth is expected to continue in the near term as 2002 resulted from good rainfall, rainfall early in the year, the cessation of hostilities, and renewed foreign aid and debt relief push relief. But drought struck again late in 2002, and the economy forward. World Food Program (WFP) estimates 14 million Ethiopians need food immediately to survive into 2003. The government estimates than annual growth of 7% is needed to reduce poverty, yet the maintenance of 5% in 2003 will be quite difficult (one estimate is for 1.5% growth).

Ethiopia's poverty-stricken economy is based on agriculture, which accounts for half of GDP, 85% 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $270 $156 million in 2000/01, 2002, but historically low prices have seen many farmers switching to qat to supplement their income. The war with Eritrea in 1999-2000 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001 Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Strong growth in 2002 resulted from good rainfall early in the year, the cessation of hostilities, and renewed foreign aid and debt relief. But drought Drought struck again late in 2002, and the World Food Program (WFP) estimates 14 million Ethiopians need food immediately leading to survive into a 2% decline in GDP in 2003. Return to normal weather patterns late in 2003 should help agricultural and GDP growth recover in 2004. The government estimates than that annual growth of 7% is needed to reduce poverty, yet the maintenance of 5% in 2003 will be quite difficult (one estimate is for 1.5% growth). poverty.

Ethiopia's poverty-stricken economy is based on agriculture, which accounts accounting for half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $156 million in 2002, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 2% decline in GDP in 2003. Return to normal Normal weather patterns late in 2003 should help helped agricultural and GDP growth recover in 2004. The government estimates that annual growth of 7% is needed to reduce poverty.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $156 million in 2002, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative. initiative, and in December 2005 the International Monetary Fund voted to forgive Ethiopia's debt to the body. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 2% decline in GDP in 2003. Normal weather patterns late in 2003 helped agricultural and GDP growth recover in 2004. 2004-05.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $156 $350 million in 2002, 2006, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the International Monetary Fund IMF voted to forgive Ethiopia's debt to the body. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 2% 3.3% decline in GDP in 2003. Normal weather patterns late in 2003 helped agricultural and GDP growth recover in 2004-05. 2004-06.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $350 million in 2006, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF voted to forgive Ethiopia's debt to the body. Under Ethiopia's land tenure system, constitution, the government state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 3.3% decline in GDP in 2003. Normal weather patterns helped agricultural and GDP growth recover in 2004-06. during 2004-07.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $350 million in 2006, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF voted to forgive forgave Ethiopia's debt to the body. debt. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 3.3% decline in GDP in 2003. Normal weather patterns helped agricultural and GDP growth recover during 2004-07. 2004-08.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost half 45% of GDP, 60% of exports, and 80% 85% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $350 million in 2006, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF forgave Ethiopia's debt. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in 2002, leading December 2005 the IMF forgave Ethiopia's debt. The global economic downturn led to a 3.3% decline in GDP in 2003. Normal weather patterns helped agricultural and balance of payments pressures, partially alleviated by recent emergency funding from the IMF. While GDP growth recover during 2004-08. has remained high, per capita inome is among the lowest in the world.

Ethiopia's poverty-stricken economy is based on agriculture, accounting for almost 45% of GDP, and 85% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $350 million in 2006, but historically low prices have seen many farmers switching to qat to supplement income. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF forgave Ethiopia's debt. The global economic downturn led to balance of payments pressures, partially alleviated by recent emergency funding from the IMF. While GDP growth has remained high, per capita inome income is among the lowest in the world.

Ethiopia's economy is based on agriculture, which accounts for 46% of GDP and 85% of total employment. Coffee has been a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought, but recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia's agricultural resilience, contributing to a reduction in the number of Ethiopians threatened with starvation. The banking, insurance, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds. While GDP growth has remained high, per capita income is among the lowest in the world. Ethiopia's Ethiopia''s economy continues on its state-led Growth and Transformation Plan under its new leadership after Prime Minister Meles's MELE's death. The five-year economic plan has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development. Ethiopia in 2013 plans to continue construction of its Grand Renassiance Renaissance Dam on the Nile-the controversial multi-billion dollar effort to develop electricity for domestic consumption and export.

Ethiopia's economy is based on agriculture, which accounts for 46% of GDP agriculture but the government is pushing to diversify into manufacturing, textiles, and 85% of total employment. energy generation.. Coffee has been is a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought, but recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia's agricultural resilience, contributing to a reduction in the number of Ethiopians threatened with starvation. The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds. While GDP growth has remained high, per capita income is among the lowest in the world. Ethiopia''s Ethiopia's economy continues on its state-led Growth and Transformation Plan under its the new collective leadership after that followed Prime Minister MELE's MELES’s death. The five-year economic plan has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development. Ethiopia in 2013 plans to 2014 will continue construction of its Grand Renaissance Dam on the Nile-the Nile – a controversial multi-billion five billion dollar effort to develop electricity for domestic consumption and export.

Ethiopia's economy is based on agriculture agriculture, but the government is pushing to diversify into manufacturing, textiles, and energy generation.. generation. Coffee is a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought, but recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia's agricultural resilience, contributing to a reduction in the number of Ethiopians threatened with starvation. The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds. While GDP growth has remained high, per capita income is among the lowest in the world. Ethiopia's economy continues on its state-led Growth and Transformation Plan under the new collective leadership that followed Prime Minister MELES’s death. The five-year economic and is scheduled to issue another development plan in 2015. Ethiopia has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development. Ethiopia in late 2014 will continue construction of issued its Grand Renaissance Dam on the Nile – a controversial five first sovereign bond, generating $1 billion dollar effort to develop electricity in revenue for domestic consumption and export. a 10 year note.

Ethiopia has grown - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, Ethiopia grew at a rate between 8% and 11% annually for more than a decade and the country is – one of the fifth-fastest fastest growing economy states among the 188 IMF member countries. This growth has been was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.
Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in thirty 30 years in 2015/2016, 2015-16, creating food insecurity for millions of Ethiopians.
Almost 80% of Ethiopia’s population The state is still employed heavily engaged in the agricultural sector, but services have surpassed agriculture as the principal source of GDP. economy. Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Since 2005, the Ethiopian government has introduced a system to register traditional land use rights and provide certificates documenting these rights. Initial surveys show that land-use certificates have significantly increased the willingness of farmers to invest in improvements on their land, from terracing to irrigation. However, title Title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.
Ethiopia’s export foreign exchange earnings are led by the services sector - primarily the state-run Ethiopian airlines Airlines - followed by exports of several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports exports, and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represents represented less than 8% of total exports. exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.
The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant roughly $8.5 billion in foreign investment direct investment, mostly from China, Turkey, India and the EU; US FDI is $567 million. Investment has been primarily in infrastructure, construction, agriculture/horticulture, agricultural processing, textiles, leather, commercial agriculture, leather and light manufacturing. leather products.
Ethiopia remains a one-party state with a planned economy. In the fall of 2015, the government finalized and published the current 2016-2020 five year 2016-20 five-year plan, known as the Growth and Transformation Plan (GTP II). GTP II II, which emphasizes developing manufactures manufacturing in sectors where Ethiopia has a comparative advantage in exporting, including advantage, such as textiles and garments, leather goods, and processed agricultural products. New infrastructure projects are to include power production and distribution, roads, rails, airports and industrial parks. To support industrialization, Ethiopia plans to increase installed power generation capacity by 8,320 MW, up from an installed a capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. Construction is underway on an electric railway network that will connect Ethiopia to all its neighbors, with a link to the Port of Djibouti already finished and partially functioning. A tripling of capacity at the international airport in Addis Ababa to 25 million passengers will be completed in 2017, while construction of a completely new airport is being planned by 2025. Meanwhile, the domestic airport network has expanded to nineteen airports in a country where mountains and deserts make developing and maintaining a road network challenging. Despite difficult topography, more than a hundred thousand kilometers of roads have been built, connecting previously isolated regions.

Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, Ethiopia GDP grew at a rate between 8% and 11% annually – one of the fastest growing states among the 188 IMF member countries. This growth was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.
Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in 30 years in 2015-16, creating food insecurity for millions of Ethiopians.
The state is heavily engaged in the economy. Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.
Ethiopia’s foreign exchange earnings are led by the services sector - primarily the state-run Ethiopian Airlines - followed by exports of several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports, and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represented less than 8% of total exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.
The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted roughly $8.5 billion in foreign direct investment, investment (FDI), mostly from China, Turkey, India and the EU; US FDI is $567 million. Investment has been primarily in infrastructure, construction, agriculture/horticulture, agricultural processing, textiles, leather and leather products.
In the fall of 2015, the government finalized and published the current 2016-20 five-year plan, known as the Growth and Transformation Plan II, which emphasizes developing manufacturing To support industrialization in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products. To support industrialization, products, Ethiopia plans to increase installed power generation capacity by 8,320 MW, up from a capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. In 2017, the government devalued the birr by 15% to increase exports and alleviate a chronic foreign currency shortage in the country.

Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, GDP grew at a rate between 8% and 11% annually – one of the fastest growing states among the 188 IMF member countries. This growth was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.
Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in 30 years in 2015-16, creating food insecurity for millions of Ethiopians.
The state is heavily engaged in the economy. Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.
Ethiopia’s foreign exchange earnings are led by the services sector - primarily the state-run Ethiopian Airlines - followed by exports of several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports, and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represented less than 8% of total exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.
The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted roughly $8.5 billion in foreign direct investment (FDI), mostly from China, Turkey, India and the EU; US FDI is $567 million. Investment has been primarily in infrastructure, construction, agriculture/horticulture, agricultural processing, textiles, leather and leather products.
To support industrialization in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products, Ethiopia plans to increase installed power generation capacity by 8,320 MW, up from a capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. In 2017, the government devalued the birr by 15% to increase exports and alleviate a chronic foreign currency shortage in the country.