EthiopiaChapters
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Alleging that the EEBC acted beyond its mandate in issuing the coordinates, Ethiopia has not accepted them and has not withdrawn troops from previously contested areas pronounced by the EEBC as belonging to Eritrea.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.
Key indicators
- Area
- 1,104,300 km2
- Population
- 110,871,031 (July 2021 est.)
- Government type
- federal parliamentary republic
- Languages
- 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 5.9%
- GDP
- $107.645 billion (2020 est.)
- Growth rate
- 6% (2020 est.)
- HDI
- 173
- Capital
- Addis Ababa
Macroeconomic indicators
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.
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, 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.
In the fall of 2015, the government finalized and published the current 2016-20 five-year plan, known as the Growth and Transformation Plan II, which emphasizes developing manufacturing in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products. To support industrialization, 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.
Source: The CIA World Factbook - Economic Overview
IMF Statistics:
| Subject descriptor | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
|
Gross domestic product, constant prices Percent change (Units) |
6.265 |
6.358 |
7.176 |
6.234 |
6.491 |
|
Gross domestic product, current prices Percent change (Billions) |
99.269 |
118.968 |
159.747 |
205.130 |
236.044 |
|
Gross domestic product per capita, current prices Percent change (Units) |
974.185 |
1,143.024 |
1,511.217 |
1,909.984 |
2,163.217 |
|
Inflation, average consumer prices Percent change (Units) |
26.794 |
33.938 |
30.219 |
25.572 |
18.187 |
|
Volume of imports of goods and services Percent change (Units) |
-1.295 |
7.316 |
-5.223 |
13.782 |
6.316 |
|
Volume of exports of goods and services Percent change (Units) |
3.157 |
10.968 |
-3.176 |
17.215 |
19.957 |
|
Unemployment rate Percent change (Units) |
|||||
|
Current account balance Percent change (Billions) |
-3.169 |
-5.134 |
-4.635 |
-5.235 |
-4.123 |
|
Current account balance Percent change (Units) |
-3.192 |
-4.315 |
-2.902 |
-2.552 |
-1.747 |
Estimates
Source: IMF Statistics - Ethiopia
Relationships with Luxembourg
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
None
Air Services agreement
None
Source: Administration des contributions directes
Further information
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact points in Ethiopia
Embassy of Grand Duchy of Luxembourg in Ethiopia
Ambassador with resident over La Haye: Mr Jean-Marc HOSCHEIT
Chargé d’affaires a.I.: Mr Dominique CHEVOLET
Cape Verde Street
P-O.Box 12813
Addis Abeba
Ethiopia
Tel.: (+251)(0) 11 661 6600
Fax: (+251) (0) 11 618 3902
E-Mail: addisabeba.amb@mae.etat.lu
Source: Ministry of Foreign Affairs of Luxembourg
Country risk as defined by Office du Ducroire for Ethiopia
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Source: Ducroire Office - Country Risk for Ethiopia