Ethiopia – Overview

ETHIOPIA in East AafricaEthiopia: Country Overview

Ethiopia is one of the oldest independent nations located in the Horn of Africa; landlocked and bordered by Somalia, Kenya, Sudan, Eritrea and Djibouti. It is one of the world’s ancient civilizations, with deep-rooted Christian values and practices. The country has a unique collection of natural diversity, breath-taking landscape, hundreds of languages, customs and people. Unfortunately, this beautiful country has a history of droughts and famine that brought its desperate needs to global attention.

Ethiopia is the second-most populous country in Sub-Saharan Africa with a population of more than 85 million (UN, 2011). It is also one of the world’s poorest countries with per capita income estimated US$392 (2010/11, NBE). On the 2011 Human Development Index Ethiopia ranked 174 out of 187 countries. More than 30 % of the country’s population lives in extreme poverty, less than US$0.6 per day. Due to recurring droughts and declining natural resources, extreme poverty remains a common occurrence in Ethiopia.

The country is one of the largest donor recipients, receiving $3.6 billion in 2011. That is over 11 % of national income, according to the Organization for Economic Co-operation and Development [OECD]. Major donors include the US, United Kingdom, the World Bank, the European Union, and the Global Fund to Fight AIDS, TB, and Malaria. The aid is primarily in health, agriculture, food and nutrition security and primary education.

Rural Ethiopia where most of the population lives is exceptionally poor. Only 16% of the total population lives in towns. Agriculture account for 41% of the country’s GDP, 90% of its exports and 85% of total employment. One third of Ethiopia’s children are malnourished with 47%. National HIV/AIDS prevalence is 2.3%. There are an estimated 5.4 million orphans, and most of them have lost one or both parents due to AIDS-related diseases.

In recent years, the country registered an average annual economic growth rate of 10 %. The World Bank noted a significant progress in key human development indicators: primary school enrolments have quadrupled, child mortality has been cut in half, and the number of people with access to clean water has more than doubled. More recently, the poverty headcount fell to 30% in 2010-2011.

However, the majority of people do not benefit from the growth, and third of the population still lives below the poverty line. The country still struggles against poverty, preventable diseases, and child mortality. There is a concern that macroeconomic challenges that include high inflation rates especially on food prices, a shortage of foreign currency, lack of strong capital market, and logistical bottlenecks, would reverse some of the improvements made in recent years.

Despite these challenges, there are good opportunities for investors to take advantage of growth in various sectors. The country enjoys bilateral trade and investment relationships with many developed countries. Partnership is focused on democracy, governance, human rights, economic growth, and regional peace and security. Allies have been encouraging the country to improve its weak human rights record, increase market liberalization, provide greater tolerance for political opposition and civil society groups, and to make space for press freedom.

The ruling party – Ethiopian People’s Revolutionary Democratic Front – controls all aspects of government, including the legislative branch. It holds all most all parliamentary seats. Opposition viewpoints are not equally represented in government. As chair of the African Union, Ethiopia plays a key role in advancing peace and security, and development in Africa. It is playing an important role in mitigating regional conflicts particularly instability in neighbouring Somalia, and disagreements between North and South Sudan.

Current Flag of Ethiopia (While the 3 main colours remain the same, political symbols on the flag keep changing)

Official Name : Federal Democratic Republic of Ethiopia
Population : 84.7 million (UN, 2011)
Population growth rate: 2.7% (1.9 million per year)
Capital : Addis Ababa
Total Area : 1.13 million sq km (437,794 sq miles)
Major languages : Amharic, Oromo, Tigre, Somali
Major religions : Christianity, Islam, Protestant
Life expectancy : 58 years for men, 62 years for women (UN)
Monetary unit : 1 Birr = 100 cents
GNI per capita : US $400 (World Bank, 2011)
GDP: US$31,7bn (World Bank, 2011)
Real GDP growth: 7.2% (World Bank, 2011)
Inflation: 20.1% (July 2012)
Main exports : Coffee, hides, oilseeds, beeswax, sugarcane
Major Industries: Agriculture & animal husbandry 80%, Government and services 12%, Industry & construction 8%.
Major trading partners: China, Germany, Saudi Arabia, US, Belgium, Sudan and India.


Note: Content is intended for informational purposes only. Consult primary sources to confirm accuracy.