Unique among African countries, the ancient Ethiopian monarchy maintained its freedom from colonial rule with the exception of a short-lived Italian occupation from 1936-41. In 1974, a military junta, the Derg, deposed Emperor Haile SELASSIE (who had ruled since 1930) and established a socialist state. Torn by bloody coups, uprisings, wide-scale drought, and massive refugee problems, the regime was finally toppled in 1991 by a coalition of rebel forces, the Ethiopian People's Revolutionary Democratic Front. A constitution was adopted in 1994, and Ethiopia's first multiparty elections were held in 1995. A border war with Eritrea in the late 1990s ended with a peace treaty in December 2000. In November 2007, the Eritrea-Ethiopia Border Commission (EEBC) issued specific coordinates as virtually demarcating the border and pronounced its work finished. Alleging that the EEBC acted beyond its mandate in issuing the coordinates, Ethiopia has not accepted them and has not withdrawn troops from previously contested areas pronounced by the EEBC as belonging to Eritrea. In August 2012, longtime leader Prime Minister MELES Zenawi died in office and was replaced by his Deputy Prime Minister HAILEMARIAM Desalegn, marking the first peaceful transition of power in decades.
Eastern Africa, west of Somalia
small reserves of gold, platinum, copper, potash, natural gas, hydropower
Population - distribution
highest density is found in the highlands of the north and middle areas of the country, particularly around the centrally located capital city of Addis Ababa; the far east and southeast are sparsely populated
Oromo (official working language in the State of Oromiya) 33.8%, Amharic (official national language) 29.3%, Somali (official working language of the State of Sumale) 6.2%, Tigrigna (Tigrinya) (official working language of the State of Tigray) 5.9%, Sidamo 4%, Wolaytta 2.2%, Gurage 2%, Afar (official working language of the State of Afar) 1.7%, Hadiyya 1.7%, Gamo 1.5%, Gedeo 1.3%, Opuuo 1.2%, Kafa 1.1%, other 8.1%, English (major foreign language taught in schools), Arabic (2007 est.)
ADDIS ABABA (capital) 3.238 million (2015)
- Conventional long form
- Federal Democratic Republic of Ethiopia
- Conventional short form
- Local long form
- Ityop'iya Federalawi Demokrasiyawi Ripeblik
- Local short form
federal parliamentary republic
- Addis Ababa
- Geographic coordinates
- 9 02 N, 38 42 E
- Time difference
- UTC+3 (8 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, Ethiopia grew at a rate between 8% and 11% annually – one of the fastest growing states among the 188 IMF member countries. This growth was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.
- External debt stocks
- US$ 20,413,666,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -2,985,273,921
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 20,107,334,667
- Exports of goods and services
- US$ 5,795,740,479
- Total Merchandise Trade
- FDI, net inflows
- US$ 2,167,600,000
- Commercial Service Exports
- US$ 2,536,557,849
cereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish
food processing, beverages, textiles, leather, garments, chemicals, metals processing, cement
- coffee (27%, by value), oilseeds (17%), edible vegetables including khat (17%), gold (13%), flowers (7%), live animals (7%), raw leather products (3%), meat products (3%)
- Switzerland 14.3%, China 11.7%, US 9.5%, Netherlands 8.7%, Saudi Arabia 5.9%, Germany 5.7% (2015)
- machinery and aircraft (14%, by value), metal and metal products, (14%), electrical materials, (13%), petroleum products (12%), motor vehicles, (10%), chemicals and fertilizers (4%)
- China 20.5%, US 9.2%, Saudi Arabia 6.5%, India 4.5% (2015)
- Country Risk Rating
- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Remarkable track record on growth and reduction of poverty
- Public investment in infrastructure
- Effort to diversify the economy
- Strong hydroelectric potential
- Vulnerability to climatic events and the volatility of commodity prices
- Land-locked country
- Inadequate foreign exchange reserves
- Persistent handicaps in terms of business climate and governance
- Unstable regional environment
- Heightened ethnic tensions
After twelve years of record economic growth, the economy slowed in 2016, hit by a severe drought and a less buoyant international environment. However, this downturn has been softened by effective government intervention and the strength of industry and services (trade, transport, telecommunications, tourism and banking). In 2017, a return to normal weather conditions was likely to be reflected in a rebound in growth of over 7%. However, serious ethno-political trouble erupted at the start of October 2016, leading to the establishment of a state of emergency. This instability has adversely affected activity, impacting on both investment and tourism, which is likely in turn to hamper the recovery.
If the political situation normalizes, growth is expected to benefit in future years from the implementation of a substantial public investment program, which continued under the Ethiopia's second Growth and Transformation Plan. The Plan continues to be focused on developing transport networks and energy, telecommunications and IT-related infrastructures. It also emphasizes expansion of the export-oriented manufacturing sector. The leather, shoes, textiles and agri-food sectors are likely to continue to play a key role in this expansion, unless there is a long-term impact on foreign direct investments caused by the worsening political climate.
The supplementary budget for 2016 allowed the social cost of the drought to be taken into account, while limiting the budget deficit to 3% of GDP. However, the under-execution of non-core expenditure will not be sufficient in 2017 to prevent the deficit from rising as a share of GDP and, in the medium term, new reforms will be required to increase the still low level of taxation.
The current account deficit remained high in 2016 because of stagnating export income resulting from the fall in world prices (coffee, oil seeds, gold). Furthermore, higher imports of capital goods and food counterbalanced the drop in the energy bill. However, expatriate workers' remittances and foreign direct investments rose substantially. Despite lower food imports and higher expatriate remittances, there will still be a large current account deficit in 2017. With regard to export performance, the rise in public sector imports is still too great. A more moderate increase in these imports could reduce external financing needs, enable the build-up of a foreign exchange reserve cushion (these represent only 1.9 month of imports) and better resistance to shocks. In addition, the exchange rate is not sufficiently flexible, which harms the country's competitiveness.
Although external debt is up, the risk of debt distress is considered moderate. Public investment could well generate growth and the proportion of official borrowing on concessional terms remains high.
Protests by the majority Oromo ethnic group, who have been demonstrating since November 2015 against the expropriation resulting from the Addis Ababa boundary expansion project, to which those by the Amhara have recently been added, have intensified since early October 2016 following a bloody stampede provoked by the security forces. A nationwide state of emergency was announced on 9 October 2016 for a period of six months after a week of violence marked by a growing number of demonstrations with attacks on public buildings and foreign interests. The risk of an escalation in the conflict cannot be ruled out given the hardening stance of the government, dominated by the minority ethnic group, the Tigrayans.
Ethiopia is located in an unstable region, marked by security and political stability problems. Relations between Ethiopia and Eritrea, former warring parties, remain very tense. Instability in Somalia is also a threat to the country's security. Finally, tensions with Sudan and Egypt over the construction of the Grand Ethiopian Renaissance Damn have not gone away.