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Ethiopia
Chamber of Commerce Country Factsheet Last update: 12.07.2018

Your advisors at the Chamber of Commerce

  • Thomas Bertrand
    +352423939337
  • Steven Koener
    +352423939379
Contact us: africa@cc.lu

Key Indicators

Area
1,104,300 km2
Population
105,350,020 (July 2017 est.)
Government type
federal 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
$195.8 billion (2017 est.)
Growth rate
8.5% (2017 est.)
HDI
174
Capital
Addis Ababa

 

Introduction

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Alleging that the EEBC acted beyond its mandate in issuing the coordinates, Ethiopia has not accepted them and has not withdrawn troops from previously contested areas pronounced by the EEBC as belonging to Eritrea.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.

Source: The CIA World Factbook - Ethiopia

 

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 descriptor20142015201620172018
Gross domestic product, constant prices
Percent change
10.31510.2006.4927.5007.512
Gross domestic product, current prices
U.S. dollars (Billions)
55.51161.62969.21876.90784.004
Gross domestic product per capita, current prices
U.S. dollars (Units)
628.335686.593758.994830.027892.349
Inflation, average consumer prices
Percent change
7.40410.1157.7058.1958.195
Volume of imports of goods and services
Percent change
32.31729.64514.4801.9344.076
Volume of exports of goods and services
Percent change
5.9648.0273.5517.9176.796
Current account balance
U.S. dollars (Billions)
-4.407-7.392-7.427-7.164-7.486
Current account balance
Percent of GDP
-7.939-11.994-10.730-9.316-8.911
Colored cells are estimates

Source: IMF Statistics - Ethiopia

 

Luxembourg and the country

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 in La Haye: Mr Jean-Marc HOSCHEIT

Buisness Manager: Mr Eric MULLER

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(at)mae.etat.lu 
Site internet: unionafricainerp.mae.lu

Source: Ministry of Foreign Affairs of Luxembourg

 

Economic and Commercial Attaché (FIT)

Economic and Commercial Attaché in charge of Djibouti, Eritrea, Chad, Egypt, Sudan and Ethiopia:

Mrs Haguer Magdi

Embassy of Belgium
20, Kamel El Shennawi Street
Garden City
EG - 11511 Cairo 
Egypte
Tel.: (+20) 22-792.38.57
E-mail: cairo(at)fitagency.com

Source: FIT

 

 

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

 

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