Economy of Ethiopia

Economy of Ethiopia
Addis Ababa, the financial centre of Ethiopia
CurrencyBirr (ETB, ብር)
8 July – 7 July
Trade organisations
AU, AfCFTA, BRICS, COMESA, IGAD, WTO (observer), G24
Country group
Statistics
GDP
  • Decrease $251.415 billion (nominal, 2024 est.)[3]
  • Decrease $657.805 billion (PPP, 2024 est.)[3]
GDP rank
GDP growth
  • 7.7% (2018) 9.0% (2019)
  • 6.1% (2020) 6.3% (2021)[4]
GDP per capita
  • Increase $1,350 (nominal, 2024 est.)[3]
  • Increase $4,045 (PPP, 2024 est.)[3]
GDP per capita rank
GDP by sector
Positive decrease34.8% (2022 est.)[6]
Population below poverty line
  • 35.0 medium (2015, World Bank)[9]
  • 33.6 (2015)[10]
Decrease 37 out of 100 points (2023, 98th rank)
Labour force
  • Increase 61,664,369 (2023)[13]
  • Increase 78% employment rate (2023)[14]
Labour force by occupation
UnemploymentSteady 3.5% (2022)[16]
Main industries
food processing, beverages, textiles, leather, chemicals, metals processing, cement
External
ExportsIncrease $10.79 billion (2023 est.)[17]
Export goods
coffee, qat, gold, leather products, live animals, oilseeds
Main export partners
  • United Arab Emirates 17.1%
  • United States 13.2%
  • Germany 6.47%
  • Saudi Arabia 6.33%
  • Somalia 6.25%
  • Netherlands 5.22%
  • China 4.13%
  • Japan 3.53%
  • South Korea 2.90%
  • France 2.73% (2022)[18]
ImportsIncrease $22.91 billion (2023 est.)[19]
Import goods
Machinery and aircraft, metal and metal products, electrical materials, petroleum products, motor vehicles, chemicals and fertilizers
Main import partners
  • China 24%
  • United States 9.11%
  • India 8.17%
  • United Arab Emirates 6.27%
  • United Kingdom 4.44%
  • Egypt 4.18%
  • Saudi Arabia 3.96% (2019)[20]
FDI stock
Increase $31.6 billion (2022 est.) Inflows: $2.43 billion (2021-22 est.)
Increase −$15.2 billion (2.77% of GDP, 2022 est.)
Negative increase $52.21 billion (2022 est.)[21]
Public finances
Positive decrease 43.93% of GDP (2022 est.)[3]
RevenuesIncrease $26.18billion (2022.est)
ExpensesIncrease$26.8 billion (2022 est.)
Economic aid$308 million (recipient) (2001)
Standard & Poor's:[22]
B (Foreign currency ratings)
B (Local currency ratings)
B (T&C assessment),
Moody's:[23]
B1 (Outlook stable)
Fitch:[24]
B (Outlook stable)
Decrease $2.4 billion (FY 2022est.)[15]
All values, unless otherwise stated, are in US dollars.

The economy of Ethiopia is a mixed and transition economy with a large public sector. The government of Ethiopia is in the process of privatizing many of the state-owned businesses and moving toward a market economy.[25] The banking, telecommunication and transportation sectors of the economy are dominated by government-owned companies.[26][27]

Ethiopia has one of the fastest-growing economies in the world and is Africa's second most populous country.[28] Many properties owned by the government during the previous regime have now been privatized or are in the process of privatization and the liberalization of its financial sector in the near future.[29] However, certain sectors such as telecommunications, financial and insurance services, air and land transportation services, and retail, are considered to be strategic sectors and are expected to remain under state control for the foreseeable future.

Almost 50% of Ethiopia's population is under the age of 18. Even though education enrollment at primary and tertiary level has increased significantly, job creation has not caught up with the increased number of secondary and postsecondary educational graduates. The country must create hundreds of thousands of jobs every year just to keep up with population growth.[30]

In 2023, Ethiopia reached an estimated GDP of 156.1 billion nominal dollars and an estimated PPP of 393.85 billion dollars. This mostly comes from a services-based economy with agriculture. In the latest data from 2019 Ethiopia's top trading partners globally included China, the United States, UAE, France, the United Kingdom, South Korea, Saudi Arabia, Germany, Japan, Switzerland, the Netherlands, Belgium, Turkey, India, and Egypt.[31][32] In 2021, agriculture made up 37.5% of the country's economic output, while services 36.25% and industry made up 21.85% of the economy.[33] Ethiopia's economy is ranked 159th place out of 190 countries in 'Ease of doing business'.[34] Ethiopia is also a part of African Continental Free Trade Area, Common Market for Eastern and Southern Africa, Intergovernmental Authority on Development, and the G24, and has observer status at the World Trade Organization. Ethiopia joined the BRICS economic alliance in January 2024.[35]

While Ethiopia does not currently have a stock exchange, it did have one in the past during the reign of Emperor Haile Selassie I, called an 'ākisīyoni gebeya.' It now has a commodity exchange in Addis Ababa called the Ethiopia Commodity Exchange, established in 2008.[36]

The Ethiopian economy has a large foreign debt, with an overall external debt of 28 billion US dollars. China owns over 13 billion dollars of its debt. Its debt to GDP ratio is smaller than similar and neighboring countries. Ethiopia currently has 2.4 billion dollars of foreign reserves, representing a decline compared to previous years.[37]

Ethiopia expects to reach a national middle-income status by 2025.[38]

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  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
  3. ^ a b c d e "World Economic Outlook Database, October 2024". IMF.org. International Monetary Fund. Retrieved 23 October 2024.
  4. ^ "Report for Selected Countries and Subjects". IMF. Retrieved 1 January 2024.
  5. ^ "Ethiopia: Share of economic sectors in the gross domestic product (GDP) from 2010 to 2020". Retrieved 15 February 2022.
  6. ^ "Ethiopia's Inflation Rate Drops For First Time in Four Months". bnnbloomberg.ca. Bloomberg. Archived from the original on 25 March 2023. Retrieved 11 July 2022.
  7. ^ "Poverty headcount ratio at national poverty lines (% of population)". data.worldbank.org. World Bank. Retrieved 11 February 2019.
  8. ^ "Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) - Ethiopia". data.worldbank.org. World Bank. Retrieved 5 December 2019.
  9. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 29 September 2020.
  10. ^ Selima., Jāhāna (2015). Work for human development (PDF). Human Development Report. United Nations Development Programme. ISBN 9789211263985. OCLC 936070939.
  11. ^ "UN Pledges Support to Improve Ethiopia's Human Development". www.ena.net. Retrieved 13 September 2022.
  12. ^ "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 11 December 2019.
  13. ^ "Labor force, total - Ethiopia". data.worldbank.org. World Bank. Retrieved 29 July 2023.
  14. ^ "Employment to population ratio, 15+, total (%) (modeled ILO estimate)". data.worldbank.org. World Bank. Retrieved 29 July 2023.
  15. ^ a b "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 11 February 2019.
  16. ^ "Unemployment, total (% of total labor force) (modeled ILO estimate)". data.worldbank.org. World Bank. Retrieved 29 July 2023.
  17. ^ "Exports of goods and services(current US$)-Ethiopia". data.worldbank.org. World Bank.
  18. ^ "Export Partners of Ethiopia". The Observatory of Economic Complexity. Retrieved 21 June 2021.
  19. ^ "Imports of goods and services(current US$)-Ethiopia". data.worldbank.org. World Bank.
  20. ^ "Import Partners of Ethiopia". The Observatory of Economic Complexity. Retrieved 21 June 2021.
  21. ^ "Ethiopia: National debt from 2017 to 2027". statista.com. Retrieved 2 December 2022.
  22. ^ "S&P Global Market Intelligence". www.capitaliq.com. Archived from the original on 11 April 2018. Retrieved 16 April 2018.
  23. ^ "Moody's: Ethiopia's credit profile balances high growth and low debt costs against range of challenges". moodys.com. 1 August 2017. Retrieved 16 April 2018.
  24. ^ "Press Release". www.fitchratings.com. Retrieved 16 April 2018.
  25. ^ Sanchez, Dana (10 January 2017). "Ethiopia Moves Toward Privatization. It's Not about Money. It's About Tech". AFKInsider. Archived from the original on 12 January 2017. Retrieved 12 January 2017.
  26. ^ Maasho, Aaron (21 March 2015). "Ethiopia launches 4G mobile service in the capital". Reuters. Archived from the original on 12 January 2017. Retrieved 11 January 2017.
  27. ^ Maasho, Aaron (29 March 2015). "Ethiopia sells off seven state firms, to offer more". Reuters. Archived from the original on 12 January 2017. Retrieved 11 January 2017.
  28. ^ "Private Sector Boosts Ethiopia's Growth". IFC. Retrieved 27 December 2012.
  29. ^ "Ethiopia sells off seven state firms, to offer more". Reuters. 19 March 2012. Retrieved 27 December 2012.
  30. ^ "A brittle Western ally in the Horn of Africa". The Economist. 1 November 2007. ISSN 0013-0613. Archived from the original on 11 January 2017. Retrieved 11 January 2017.
  31. ^ "International Monetary Fund". IMF.org.
  32. ^ "Import partners of Ethiopia". The Observatory of Economic Complexity.
  33. ^ "Ethiopia: Share of economic sectors in the gross domestic product (GDP) from 2011 to 2021". Statista.
  34. ^ "Ease of doing business score in Ethiopia from 2015 to 2020". Statista.
  35. ^ "How Egypt and Ethiopia joining Brics could help boost China's influence in Africa". South China Morning Post.
  36. ^ "Ethiopia's Commodity Exchange Opens its Doors". IFPRI.
  37. ^ "IMF Pins Ethiopia Funding Program on Debt-Restructuring Progress". Bloomberg News.
  38. ^ "Working paper series - Ethiopia 2030: A Country Transformed? Options for A Next Generation of Reforms". United Nations.