Economy of Ethiopia

By | April 29, 2022

According to businesscarriers, Ethiopia is one of the least developed countries in the world. Its economy is almost entirely dependent on the state of agriculture, which produces more than 50% of the country’s GDP. The basis of agriculture is agriculture and cattle breeding. Coffee provides 2/3 of all export income. The country has the largest livestock population in Africa. 85% of the population is directly or indirectly associated with the production of agricultural products. Ethiopia is the country with the lowest level of urbanization on the African continent. The degree of state socialization of economic sectors, even under the Mengistu regime, was not so significant. OK. 2/3 of GDP came from the private sector. It has a long tradition of handicrafts, small businesses and private retailers. The share of the public sector in industry alone is approx. 85%. Many businesses are unprofitable

GDP in terms of the purchasing power of the currency is $46 billion, GDP per capita is $600 (2001). GDP growth 7.3%. Inflation 6.8%. GDP by economic sectors (2000): agriculture 52%, industry 11%, services 37%.

Agricultural products: cereals (wheat, barley, teff, corn, oats, sorghum, etc.), coffee, legumes, sugarcane, oilseeds, cotton, potatoes, vegetables and fruits, tobacco, khat, hides and livestock.

Industry is underdeveloped. Manufacturing industries: food, incl. production of beverages, tobacco, textile, leather, footwear, construction. There are enterprises of the chemical industry and metalworking. The mining industry (except for gold mining) is poorly developed. It accounts for only 1% of GDP. Salt, limestone, kaolin, gypsum, clay, and marble are also mined.

The Addis Ababa-Djibouti railway is 681 km long in Ethiopia. The length of roads is 24.145 km, incl. covered 3,290 km (1998). There are 86 airports, 14 of them with runway coverage (2001).

Communications: telephones 231,900, mobile phones 17,800 (2000), televisions 682,000, radios 15.2 million, Internet users 20,000 (2002).

Ethiopia has every reason to become a tourist paradise: the diversity of the landscape, the richness of flora and fauna, the diversity of traditional cultures of the peoples inhabiting the country, a rich history with unique cultural monuments. So far, this is hampered by the instability of the socio-political situation and the poorly developed tourism infrastructure.

State budget (2002, billion US dollars): revenues 1.8, expenditures 1.9. External debt $5.3 billion (2002). Economic assistance $308 million (2000/01).

Foreign trade (2000, billion US dollars): export – 442, import – 1.54. The main export commodities are coffee, khat, gold, leather goods, oilseeds; main partners — Germany 18%, Japan

11%, Djibouti 11%, Saudi Arabia 8%. Main import commodities: meat products, petroleum and processed products, chemicals, transport and manufacturing equipment, textiles; the main partners are Saudi Arabia 25%, USA 9%, Italy 7%, Russia 4% (2000).

The socio-economic situation in the country by the end of the summer of 1991 was the most difficult: almost 9.8 million Ethiopians needed food and other humanitarian assistance, 6.5 million people. lived in arid regions, 1.4 million lost their homes during the civil war, the country was St. 1 million Somali and Sudanese refugees. approx. 600 thousand former military personnel of the former regime and their families.

Improving living conditions depends on increasing agricultural productivity, which requires the development of irrigation (due to the high likelihood of droughts) and the use of more fertilizers. In terms of fertilizer use, Ethiopia ranks last among African countries. The country’s water resources are used extremely poorly, less than 4% of all cultivated land is irrigated. The authorities immediately announced their intention to develop the economy in the direction of a greater market orientation. Rural producers and buyers of agricultural products were granted economic independence. The privatization of state-owned enterprises continues. However, land (rural and urban) remains public property, and the state continues to perform regulatory functions in the economy. During the first years of the new government, prices were liberalized and the national currency was devalued. The state controls only the prices of gasoline, fertilizers and rent. In general, Ethiopia’s economic policy after 1991 can be described as reform-oriented, carried out at a cautious, slow pace. Privatization is limited, the country’s land leasing system is selective, and the public is not sufficiently informed about the principles of the economic policy pursued.

Since 1991, the level of inflation has significantly decreased, the budget deficit has decreased from 4.2 to 3%, but the socio-economic situation of the general population remains unsatisfactory. The number of officially registered unemployed 1 million people. in the presence of significant hidden unemployment (ser. 1995). The deterioration of the socio-economic situation was facilitated by a long bloody border conflict with Eritrea and uncertainty about political stability. Despite the formal equality of administrative regions, they are very different economically from each other. Most of the country’s productive forces are concentrated in four of them: in the capital of the country, Addis Ababa, Amhara, Oromiya and the state of the southern peoples. These four states are home to 90% of the total population of the country, and they account for 3/4 of all regional spending.

Economy of Ethiopia