TRALAC - Trade Law Centre

Country Info: Ethiopia

Economic Background

Ethiopia's economy is based on agriculture, which accounts for 46% of GDP and 85% of total employment. Coffee has been a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought, but recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia's agricultural resilience, contributing to a reduction in the number of Ethiopians threatened with starvation.

The banking, insurance, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing.

Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds.

While GDP growth has remained high, per capita income is among the lowest in the world.

Ethiopia's economy continues on its state-led Growth and Transformation Plan under its new leadership after Prime Minister Mele's death.The five-year economic plan has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development.

Ethiopia in 2013 plans to continue construction of its Grand Renaissance Dam on the Nile - the controversial multi-billion dollar effort to develop electricity for domestic consumption and export.

Ethiopia is the host country for the 2013 AGOA Forum.


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