Ethiopia economy

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Ethiopia
Flag of Ethiopia.svg
World economic rank 67th (nominal)
64th (PPP)
currency Ethiopian Birr (ETB)
Key figures
Gross domestic
product (GDP) 		$ 79.7 billion (nominal) (2017)
$ 195.8 billion ( PPP ) (2017)
GDP per capita $ 873 (nominal) (2017)
$ 2,161 (PPP) (2017)
GDP by economic sector Agriculture : 35.8%
Industry : 22.2%
Services : 42.0% (2017)
growth   8.5% (2017)
inflation rate 10.3% (2017)
Employed 52.82 million (2017)
Employed persons by economic sector Agriculture : 72.7% (2013)
Industry : 7.4% (2013)
Services : 19.9% (2013)
Unemployment rate 17.5% (2012)
Foreign trade
export 3.08 billion (2017)
Export goods Coffee, oil seeds, vegetables, gold, flowers
Export partner Sudan : 23.3%
Switzerland : 10.2%
China : 8.1%
Somalia : 6.6%
Netherlands : 6.2% (2017)
import 16.76 billion (2017)
Import goods Machinery and industrial products, raw materials
Import partner China : 24.1%
Saudi Arabia : 10.2%
India : 6.4%
Kuwait : 5.3%
France : 5.2% (2017)
Foreign trade balance −13.68 billion (2017)
public finances
Public debt 60.2% of GDP (2017)
Government revenue $ 12.11 billion (2017)
Government spending $ 14.63 billion (2017)
Budget balance −3.2% of GDP (2017)

The economy of Ethiopia has so far been characterized by agriculture and its most important export good is currently coffee .

With a per capita income of around 542 US dollars (2013), the country is one of the poorest in the world; however, the average value is Africa south of the Sahara more than 600 US dollars. Around a quarter have an income of less than one US dollar a day, four fifths have less than two US dollars a day. Around half of the population (44–50%) live below the poverty line .

After the 1974 revolution, a socialist central government economy was introduced. Comprehensive state control was established and a large part of the economy was transferred to the public purse. Since mid-1991 it has been developing again into a decentralized, more market-based system.

In 2015, Ethiopia had the highest economic growth in the world at 10.2% . At the same time, it was the only country this year that could show double-digit economic growth.

In 2017, the country ranked 142nd out of 180 countries in the index for economic freedom .

General considerations

By African standards, Ethiopia is a potentially rich country, endowed with fertile soil and in large areas with sufficient rainfall. Farmers grow a number of different types of grain. Coffee can thrive on the southern slopes. Shepherds can graze their cattle, sheep and goats, in large parts of the country. It also has various valuable mineral raw materials, including gold and platinum .

Framework


The largest union in the country is the one unified union, the Confederation of Ethiopian Unions .

Economic history

After the Greeks , Armenians and Arabs opened the door to the country, they took over the interface between the country and the rest of the world. The Arabs also settled within the country's borders and ultimately dominated business activities. The Italians who had occupied Ethiopia since the 1930s, when they withdrew, left behind an economic structure that hardly differed from the structure of the previous centuries. Little happened in this regard in the next two decades either. The government only concentrated on expanding the administrative apparatus and ancillary services until, in the early 1950s, Emperor Haile Selassie I took up the demands for a change from a subsistence economy to an agro-industrial economy. In the 1954/55 fiscal year, the government set up the National Economic Council to coordinate its development plans. In the early 1970s, the economy saw some growth and the economy began to diversify with industries such as manufacturing and services. However, these changes did not improve the lives of most Ethiopians.

Economic sectors

Agriculture is the most important branch of the economy. Around 43.6% (2003/04; 40.1% in 2005) of the gross domestic product and four fifths of exports are contributed by this. In addition, it is important for the labor market, because four fifths of Ethiopians are employed in agriculture. Furthermore, 1.6% are contributed by the water and energy sectors and 0.6% by mining. The industrial sector contributed 9.6% to GDP over the same period. The service sector holds the largest share with 47.2% (2005) of value added. Ethiopia is therefore one of the least developed developing countries , and with its low per capita income , a so-called Least Developed Country .

Agriculture

The most important agricultural product is coffee, which contributes 65–75% to foreign exchange income.

The country's economic backbone: Coffee harvest in Ethiopia

The country's economy is heavily dependent on coffee. In 1999 alone, US $ 267 million was earned through the export of 105,000 tons of the bean. It is estimated that coffee's contribution to GDP is around 10%. The trademark protection applied for by Ethiopia in 2005 for the three cultivation regions Yirgacheffe, Harrar and Sidamo was settled after a legal dispute with the coffee house chain Starbucks in 2007, after Starbucks had achieved extraordinary profits with the Shirkina Sun-Dried Sidamo variety , without the To involve producers.

Other agricultural export goods are live animals, hides, legumes, the light drug khat and oilseeds.

The agricultural sector faces a number of problems. These include periodic droughts, erosion through overgrazing, deforestation, the high population density, high tax rates on agricultural products and poor infrastructure, which makes market access difficult. So far, agriculture has been the most promising resource for the country's development. The potential for self-sufficiency with grain and an expansion in exports of cattle, grain, vegetables and fruit exists. Around 4.6 million people depend on food deliveries from abroad.

Flower market in the Netherlands

A particularly dynamic area of ​​agriculture is the production of cut flowers and young plants. According to estimates, 32 companies (2001: three companies) should have achieved export revenues of US $ 20 million in 2005. The companies included 15 foreign investors, including three German investors who have already achieved initial success. The critical factor for further development remains the transport capacity, which the airlines could not increase to the extent required, even though Ethiopian Airlines , for example , had expanded its cargo aircraft fleet through leasing.

Mining and energy

Typical drilling rig for petroleum prospecting

The country has no significant raw material deposits. The existing raw material stores are also only exploited to a limited extent. Gold, limestone and small amounts of tantalum are mined. Of these, gold is the most important raw material, around four tons are mined annually. This is done by the MIDROC group of the Saudi-Ethiopian major investor Mohammed Hussein Al Amoudi , who took over the former state gold production for 175 million US dollars in 1997. The MIDROC group also exploits the salt deposits.

Other proven deposits that could be commercially exploited include potassium carbonate , natural gas, phosphorus, platinum, iron ore and petroleum. The secured oil reserves for January 2002 are given as 214,000 barrels. The Malaysian company Petronas conducts oil explorations in Gambela , a region in the west of the country . These were supposedly about to be used, but were endangered by the political instability there. The British-Sudanese joint venture White Nile acquired exploration rights in the same area in July 2005. Petronas also acquired the four-year usage rights (with extension rights) for the south-eastern Somali region. The National Mining Corporation (NMC) of Sheikh Al-Ahmoudi prospected in the Awash Basin region Afar for oil. His National Oil Corporation (NOC), on the other hand, has been building an extensive distribution and filling station network since March 2004. The planned takeover of the existing ExxonMobil network by the entrepreneur did not succeed because the group sold its commitments in Africa, in a total of 14 countries, to Total .

In West-Wellega, in the Oromia region , the 230 million tons of coal will be used by a Chinese consortium of companies in the future by means of a coal-fired power station under construction. The secured gas reserves amount to 24.92 billion m³ (January 2002), of which 12.5 billion m³ are in the Kalub field in the Ogaden / Somali region alone . However, the use of this reserve is frustrated by the tense security situation in the region. In addition, is geothermal energy available.

Commercial and industrial

Ethiopia mainly has light industries such as food, beverage, textile and leather industries. There is also the chemical industry, metal processing industry and cement industry. Industrial production is concentrated in urban centers. The industrial sector grew by 6.8 percent in the period 2003/2004 and thus lagged behind the growth of the overall economy, which was based in particular on the good harvest in agriculture. The Ministry of Finance indicates the shares of the sub-sectors as 4.8 percent for manufacturing companies, three percent for the construction industry and 1.9 percent for small craft businesses.

The privatization and management of the state-owned enterprises were merged. The newly structured Privatization and Public Enterprises Supervising Agency (PPESA) can book successes with the privatization and management contracts in the textile industry and the largest tannery in the country, as well as with the expansion of the sugar industry and its possible privatization.

service provider

Since 1999/2000, the share of the national income from the tertiary sector has been the largest. According to the Ministry of Finance, retail trade accounted for 16.2 percent of GDP in 2002/2003, followed by public administration with 15.4 percent and banking with 7.4 percent.

Banks, insurance companies

Seven private banks are authorized, which meanwhile book 21.3 percent of the deposits, which corresponds to 815 million US dollars (June 2009). The state-run Commercial Bank of Ethiopia (CBE) comes to 74.2 percent or 2.8 billion US dollars. The ratio has thus shifted in favor of the private banks, because in 1999 it was 1:10. The private sector is more committed to lending to medium-sized companies and cooperatives and has started to enter the import / export financing business together with international partners. There are also two smaller state banks, the Development Bank of Ethiopia and the Construction and Business Bank .

The banking system remains underdeveloped in spite of increasing lending to government and the private sector. Since a corruption scandal a few years ago, triggered by a large number of bad loans from the CBE, new security measures have placed a particular burden on the smaller private banks at the expense of the availability of credit. With just 784 branches (2003/04), 20 more than a year earlier, the bank density is very low. Statistically, there are 198,000 Ethiopians for every settlement, which is twice the value compared to the average for Sub-Saharan Africa. Foreign investments are not allowed in the banking sector.

There is one state and nine private insurance companies with a total of 238 branches (2003/04), 17 branches more than a year earlier.

tourism

Sheraton Hotel in Addis Ababa

The political events surrounding the elections in May 2005 and the country's structural weakness are a problem for the tourism sector in particular. This was also able to attract international attention through the return of the Aksum obelisk from Rome and a large concert on Bob Marley's 60th birthday Year change nothing. Due to the conferences of the Addis Ababa-based organizations of the African Union and the Economic Commission for Africa , the major hotels in the capital are regularly booked out. That is why the decision was made in January 2005 to have two new hotels built for a total of 17 million US dollars by a Kuwaiti-French consortium.

With over 864,000 tourists, Ethiopia was the 21st most visited country in Africa in 2016. Tourism income was $ 280 million that same year. The potential for tourism is considered great. There are a total of nine UNESCO World Heritage Sites in the country .

Key figures

All values ​​are given in US dollars ( purchasing power parity ).

year GNI
(purchasing power parity) 		GNI per capita
(purchasing power parity) 		GDP growth per year
1990 20.2 billion 420 2.7%
1995 23.8 billion 420 6.1%
2000 32.4 billion 490 6.1%
2005 49.9 billion 650 11.8%
2010 91.9 billion 1,050 12.6%
2011 104.5 billion 1,160 11.2%
2012 115.6 billion 1,250 8.6%
2013 129.9 billion 1,370 10.6%
2014 145.7 billion 1,500 10.3%
2015 162.7 billion 1,630 10.4%
2016 177.0 billion 1,730 7.6%
2017 198.1 billion 1,890 10.2%

membership

Ethiopia is a member of the following economically relevant organizations:

Regional
trade
Bretton Woods Institutions

See also

swell

The fiscal year in Ethiopia starts on July 8th and ends on July 7th. As a result, many of the information relating to the Gregorian calendar is year-spanning, while other information is based on the Gregorian calendar year. As far as is known, the dates used are based on the Gregorian calendar and not the Ethiopian one .

  1. ↑ Gross domestic product 2016 (PPP) (PDF; 14 kB) In: The World Bank: World Development Indicators database . World Bank. February 3, 2017. Retrieved February 5, 2018.
  2. ↑ a b c d e f g h i j k l m n CIA: The World Factbook , accessed January 29, 2018
  3. ↑ World Economic Outlook Database , April 2014 of the International Monetary Fund, features NGDPDPC and NGDPRPC
  4. ↑ Earth Trends: GDP per capita
  5. ↑ Statista: The 20 countries with the greatest growth in gross domestic product (GDP) in 2015 (compared to the previous year)
  6. ↑ Country Rankings: World & Global Economy Rankings on Economic Freedom. Retrieved December 25, 2017 .
  7. ^ Transparency International (Ed.): Report on the Transparency International Global Corruption Barometer 2005. Berlin 2005.
  8. ^ Freedom House (Ed.): Freedom in the World 2006. Washington DC 2006.
  9. ↑ Transparency International: transparency.org: Corruption Perceptions Index (CPI), ( Memento of the original dated May 12, 2008 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. August 7, 2006. @1@ 2Template: Webachiv / IABot / www.transparency.org
  10. ^ Heritage.org: Index of Economic Freedom.
  11. ^ Countrystudies.us on economic history before 1974
  12. ↑ photius.com on the historical background of the Ethiopian economy
  13. ^ Embassy of the Federal Republic of Ethiopia, August 3, 2006.
  14. ↑ Ethiopian National Bank: Annual Report August 2006
  15. ↑ UNWTO 2017. World Tourism Organization, accessed August 14, 2018 .
  16. ↑ GNI, PPP (current international $) | Data. Retrieved August 21, 2018 (American English).

literature

  • Federal Agency for Foreign Trade (Ed.): Ethiopia - Economic Development 2004/05. Cologne 2006.
  • OECD (Ed.): Development Center and African Development Bank African Economic Outlook 2005/2006 - Country Studies Ethiopia. Paris 2006.
  • UNCTAD (Ed.): An Investment Guide to Ethiopia - Opportunities and conditions. Geneva 2004.

Web links

 Wikinews: Ethiopia  - in the news