Economy of Ethiopia
Overview
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 $350 million in 2006, but historically low prices have seen many farmers switching to qat to supplement income.
The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF voted to forgive Ethiopia's debt to the body. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans.
Drought struck again late in 2002, leading to a 3.3% decline in GDP in 2003. Normal weather patterns helped agricultural and GDP growth recover during 2004-07.
GDP
Real Growth Rate
10%
Per Capita
USD 700
From Agriculture
49%
From Industry
13%
From Services
38%
Labour Force
Available for Work
27
Working in Agriculture
80%
Working in Industry
8%
Working in Services
12%
Unemployment Rate
0%
Population Below Poverty Line
39%
Inflation Rate
16%
Investment as Percent of GDP
27%
Budget
Revenues
USD 2,944 (m)
Expenditures
USD 3,683 (m)
Public Debt
US$ 0.00 (m)
Agricultural Products
Cereals, pulses, coffee, oilseed, cotton, sugarcane, potatoes, qat, cut flowers; hides, cattle, sheep, goats; fish
Core Industries
Food processing, beverages, textiles, leather, chemicals, metals processing, cement
Exports
Value
USD 1,200 (m)
Commodities
Coffee, qat, gold, leather products, live animals, oilseeds
Partners
Germany 12.8%, China 10.6%, Japan 7.5%, US 6.8%, Saudi Arabia 5.9%, Djibouti 5.8%, Italy 5% (2006)
Imports
Value
USD 4,540 (m)
Commodities
Food and live animals, petroleum and petroleum products, chemicals, machinery, motor vehicles, cereals, textiles
Partners
Saudi Arabia 18%, China 11.3%, India 8.1%, Italy 5.1%, Germany 4.1% (2006)
External Debt
USD 3,793 (m)
Fiscal Year
8 July - 7 July
