Ethiopia Economy - 2021


SOURCE: 2021 CIA WORLD FACTBOOK

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Economic overview

Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, GDP 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.

Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in 30 years in 2015-16, creating food insecurity for millions of Ethiopians.

The state is heavily engaged in the economy. Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia's constitution, the state owns all land and provides long-term leases to tenants. Title rights in urban areas, particularly Addis Ababa, are poorly regulated, and subject to corruption.

Ethiopia’s foreign exchange earnings are led by the services sector - primarily the state-run Ethiopian Airlines - followed by exports of several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports, and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represented less than 8% of total exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.

The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted roughly $8.5 billion in foreign direct investment (FDI), mostly from China, Turkey, India and the EU; US FDI is $567 million. Investment has been primarily in infrastructure, construction, agriculture/horticulture, agricultural processing, textiles, leather and leather products.

To support industrialization in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products, Ethiopia plans to increase installed power generation capacity by 8,320 MW, up from a capacity of 2,000 MW, by building three more major dams and expanding to other sources of renewable energy. In 2017, the government devalued the birr by 15% to increase exports and alleviate a chronic foreign currency shortage in the country.

Real GDP growth rate

10.9% (2017 est.)

8% (2016 est.)

10.4% (2015 est.)

country comparison to the world: 4

Inflation rate (consumer prices)

15.7% (2019 est.)

13.9% (2018 est.)

10.8% (2017 est.)

country comparison to the world: 217

Credit ratings

Fitch rating: B (2014)

Moody's rating: B2 (2020)

Standard & Poors rating: B (2014)

Real GDP (purchasing power parity)

$248.972 billion (2019 est.)

$229.755 billion (2018 est.)

$215.094 billion (2017 est.)

note: data are in 2010 dollars

country comparison to the world: 62

GDP (official exchange rate)

$92.154 billion (2019 est.)

Real GDP per capita

$2,221 (2019 est.)

$2,104 (2018 est.)

$2,022 (2017 est.)

note: data are in 2010 dollars

country comparison to the world: 210

Gross national saving

33.2% of GDP (2018 est.)

30.6% of GDP (2017 est.)

32.4% of GDP (2015 est.)

country comparison to the world: 27

GDP - composition, by sector of origin

agriculture: 34.8% (2017 est.)

industry: 21.6% (2017 est.)

services: 43.6% (2017 est.)

GDP - composition, by end use

household consumption: 69.6% (2017 est.)

government consumption: 10% (2017 est.)

investment in fixed capital: 43.5% (2017 est.)

investment in inventories: -0.1% (2017 est.)

exports of goods and services: 8.1% (2017 est.)

imports of goods and services: -31.2% (2017 est.)

Ease of Doing Business Index scores

Overall score: 48 (2020)

Starting a Business score: 71.7 (2020)

Trading score: 56 (2020)

Enforcement score: 62.8 (2020)

Agricultural products

maize, cereals, wheat, sorghum, milk, barley, sweet potatoes, roots/tubers nes, sugar cane, millet

Industries

food processing, beverages, textiles, leather, garments, chemicals, metals processing, cement

Industrial production growth rate

10.5% (2017 est.)

country comparison to the world: 13

Labor force

52.82 million (2017 est.)

country comparison to the world: 12

Labor force - by occupation

agriculture: 72.7%

industry: 7.4%

services: 19.9% (2013 est.)

Unemployment rate

17.5% (2012 est.)

18% (2011 est.)

country comparison to the world: 184

Population below poverty line

23.5% (2015 est.)

Gini Index coefficient - distribution of family income

35 (2015 est.)

30 (2000)

country comparison to the world: 106

Household income or consumption by percentage share

lowest 10%: 4.1%

highest 10%: 25.6% (2005)

Budget

revenues: 11.24 billion (2017 est.)

expenditures: 13.79 billion (2017 est.)

Taxes and other revenues

13.9% (of GDP) (2017 est.)

country comparison to the world: 203

Budget surplus (+) or deficit (-)

-3.2% (of GDP) (2017 est.)

country comparison to the world: 139

Public debt

54.2% of GDP (2017 est.)

53.2% of GDP (2016 est.)

country comparison to the world: 83

Fiscal year

8 July - 7 July

Current account balance

-$6.551 billion (2017 est.)

-$6.574 billion (2016 est.)

country comparison to the world: 186

Exports

$3.23 billion (2017 est.)

$2.814 billion (2016 est.)

country comparison to the world: 132

Exports - partners

China 17%, United States 16%, United Arab Emirates 8%, Saudi Arabia 6%, South Korea 5%, Germany 5% (2019)

Exports - commodities

coffee, sesame seeds, gold, cut flowers, zinc (2019)

Imports

$15.59 billion (2017 est.)

$14.69 billion (2016 est.)

country comparison to the world: 92

Imports - partners

China 27%, India 9%, United Arab Emirates 9%, France 9%, United Kingdom 7% (2019)

Imports - commodities

aircraft, gas turbines, packaged medicines, electric filament, cars (2019)

Reserves of foreign exchange and gold

$3.013 billion (31 December 2017 est.)

$3.022 billion (31 December 2016 est.)

country comparison to the world: 110

Debt - external

$27.27 billion (2019 est.)

$26.269 billion (2018 est.)

country comparison to the world: 87

Exchange rates

birr (ETB) per US dollar -

25 (2017 est.)

21.732 (2016 est.)

21.732 (2015 est.)

21.55 (2014 est.)

19.8 (2013 est.)

NOTE: The information regarding Ethiopia on this page is re-published from the 2021 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Ethiopia 2021 information contained here. All suggestions for corrections of any errors about Ethiopia 2021 should be addressed to the CIA or the source cited on each page.

This page was last modified 16 Dec 23, Copyright © 2023 ITA all rights reserved.