Economic Development

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 (PPP):
$1,000 (2006 est.)

GDP - composition by sector:
agriculture 46.7%, industry 12.9% and services 40.4% (2006)

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

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

Imports:
$4.105 billion f.o.b. (2006 est.) 

External Debt:
$6.038 billion (2006 est.)

Currency:
1 Birr = 100 centim

Exchange Rate:
U.S. $1 = 8.69 (2006) Ethiopian Birr (subject to daily exchange) 

Major industrial products: 
food and beverages, textiles, leather, cement, metal products, paper, plastic products, automotive and tractor assembly, tires and certain chemicals.

Major agricultural products: 
coffee, pulses, oilseeds, cereals, cotton, tubers, tobacco, fruits, pepper, sugar cane, fish and livestock.

Major exports: 
coffee, oilseeds, hides, livestock and textiles

Major imports:
machinery and equipment, industrial inputs, pharmaceuticals, chemicals.

Ethiopia is endowed with vast agricultural, mineral, and energy resources, which remain virtually untapped.  In 1992, following the collapse of the military dictatorship and command economy, Ethiopia has taken a major policy shift towards democracy and economic development.

The Government of the Federal Democratic Republic of Ethiopia has introduced an economic reform plan that emphasizes the use of free market mechanisms and liberalized trade and investment laws to encourage foreign investment and trade, as well as domestic entrepreneurs.

As the result of the reforms, the direct role of the State in economic activity has progressively declined.  In particular, tariffs were substantially reduced, quota constraints relaxed, licensing procedures simplified, foreign exchange controls eased, and privatization of public enterprise became widespread.  The government has also adopted the strategy of Agricultural Development Led Industrialization (ADLI) as a central plank of its development program.  This strategy emphasizes productivity growth in smallholder agriculture and labor-intensive industrialization.

Agriculture

Ethiopia is a predominantly agricultural country with over 80 percent of its population farming on about 15 - 20 percent of the arable land. The agricultural sector accounts for over half of the GDP and 90 percent of export earnings, the most important of which is coffee. Some of the finest and rarest coffees in the world are grown in the highlands of Ethiopia, and Ethiopia is Africa’s third largest producer of coffee, after Uganda and the Ivory Coast. In addition, Ethiopia has one of the largest livestock resources in the world.

Given the key role that agriculture plays in the economic development of the country, the Government has placed special focus on agriculture in its development agenda. Agriculture can be a stimulus to improve land utilization and productivity, generate income and be used as a spring-board for growth in the industrial and service sectors.  

Industry

The industry and manufacturing sector plays an important role in the economy by supplying consumer goods, generating employment opportunities, absorbing agricultural raw materials and earning foreign exchange through exports. This sector comprises light manufacturing products such as construction materials, metal and chemical products as well as basic consumer goods such as food, beverages, leather, clothing and textiles. Production is concentrated in and around Addis Ababa and mostly caters to the domestic market, although the number of exported goods is steadily growing.

To help the industrial sector grow, the Government is making concerted efforts to dismantle barriers to investment and private sector participation caused by excessive regulation from past regimes.

Mining

The mining sector of the economy has immense potential for development. A limited scale of gold tantalum and platinum mining is currently being undertaken. Several countries have signed contracts with Ethiopia to conduct gold exploration in certain parts of the country.

The development of Ethiopia’s mineral wealth is one of the Government’s leading economic objectives. Mining operations are expected to be an important economic catalyst for the Government’s export-oriented development strategy. The goal is to get the minerals sector up to 10 percent of GDP within 10 years.