Ethiopian Economy

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ARTE ABYSSINIA

Ethiopian economy

Economy overview:

Ethiopia's poverty-stricken economy is based on agriculture, accounting for half of GDP, 60% of exports, and 80% of total employment. The agricultural sector suffers from frequent drought and poor cultivation practices. Coffee is critical to the Ethiopian economy with exports of some $156 million in 2002, but historically low prices have seen many farmers switching to qat to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the International Monetary Fund voted to forgive Ethiopia's debt to the body. Under Ethiopia's land tenure system, the government owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 2% decline in GDP in 2003. Normal weather patterns late in 2003 helped agricultural and GDP growth recover in 2004-05.

GDP (purchasing power parity):	$74.88 billion (2006 est.)
GDP (official exchange rate):	$13.32 billion ( est.)

GDP - real growth rate:

10.6% (2006 est.)

GDP - per capita:

$1,000 (2006 est.)

GDP - composition by sector:

agriculture: 46.7%
industry: 12.9%
services: 40.4% (2006 est.)

Population below poverty line:

38.7% (FY05/06 est.)

Investment (gross fixed):	20% of GDP (2006 est.)
Household income or consumption by percentage share:	lowest 10%: 3% highest 10%: 33.7% (1995)

Distribution of family income - Gini index:	30 (2000)
Inflation rate (consumer prices):	13% (2006 est.)

Labor force:

27.27 million (1999)

Labor force - by occupation:

agriculture and animal husbandry 80%, government and services 12%, industry and construction 8% (1985)

Unemployment rate:

NA (2002 est.)

Budget:

revenues: $2.679 billion
expenditures: $3.388 billion; including capital expenditures of $788 million (2006 est.)

Agriculture - products:	cereals, pulses, coffee, oilseed, cotton, sugarcane, potatoes, qat, cut flowers, hides, cattle, sheep, goats, fish
Industries:	food processing, beverages, textiles, chemicals, metals processing, cement

Industrial production growth rate:

6.7% (2001 est.)

Electricity - production:

2.294 billion kWh (2004)

Electricity - production by source:

fossil fuel: 1.3%
hydro: 97.6%
other: 1.1% (2001)
nuclear: 0%

Electricity - consumption:

2.133 billion kWh (2004)

Electricity - exports:

0 kWh (2004)

Electricity - imports:

0 kWh (2004)

Oil - production:	0 bbl/day (2004 est.)
Oil - consumption:	29,000 bbl/day (2004 est.)
Oil - exports:	NA (2004)
Oil - imports:	NA (2004)
Oil - proved reserves:	214,000 bbl (1 January 2002)
Natural gas -proved reserves:	214,000 bbl (1 January 2002)
Current account balance:	-$3.384 billion (FY05/06 est.)

Exports:

$1.085 billion f.o.b. (2006 est.)

Exports - commodities:

coffee, qat, gold, leather products, live animals, oilseeds

Exports - partners:

China 10.5%, Germany 8.7%, Japan 7.4%, US 6.8%, Saudi Arabia 5.8%, Djibouti 5.8%, Switzerland 5.1%, Italy 5% (2006)

Imports:	$4.105 billion f.o.b. (2006 est.)
Imports - commodities	food and live animals, petroleum and petroleum products, chemicals, machinery, motor vehicles, cereals, textiles

Imports - partners:

Saudi Arabia 18.1%, China 11.4%, India 8.1%, Italy 5.1% (2006)

Reserves of foreign exchange & gold:	$1.108 billion (2006 est.)
Debt - external:	$6.038 billion (2006 est.)

Economic aid - recipient:

$1.6 billion (FY05/06)

Currency:

birr (ETB)

Currency code:

ETB

Exchange rates:

birr per US dollar - 8.69 (2006), 8.68 (2005), 8.6356 (2004), 8.5997 (2003), 8.5678 (2002)
note: since 24 October 2001 exchange rates are determined on a daily basis via interbank transactions regulated by the Central Bank

Fiscal year:

8 July - 7 July