Ethiopia

IV

Economy

Ethiopia is one of the world’s poorest nations, with a per-capita gross domestic product (GDP) of $156.80 a year in 2005. Most Ethiopians do not participate in the monetary economy, and simply barter in local markets. The health of the Ethiopian economy hangs on the earnings of the agricultural sector, which rise and fall depending on rainfall. Ethiopia is therefore heavily dependent on funding from foreign donors.

A

Agriculture

Agriculture by traditional methods, including the raising of livestock, is the most characteristic form of Ethiopian economic activity. Under Ethiopia's land tenure system, the government owns all land and grants licenses to farmers allowing them to work it. Despite a government program of diversification, coffee remains Ethiopia’s most important commodity. Periodic droughts have greatly reduced agricultural output and forced Ethiopia to import basic foodstuffs.

Commercial estates supply coffee, cotton, sugar, fruit, and vegetables to the nation’s processing industries and for export. Legumes and oil seeds are also grown on a commercial scale. The most important food crops grown primarily for local consumption are cereal grains such as wheat, corn, and sorghum. Ethiopian herders raise cattle, sheep, goats, and fowl.

B

Mining

Although many mineral deposits exist in Ethiopia, thick layers of volcanic lava cover the older ore-bearing rock and render exploitation difficult. Outcroppings of iron, copper, zinc, and lead have been mined since ancient times, but deeper reserves of these minerals remain largely unexploited. Gold, limestone, and marble are mined for export.

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C

Manufacturing

Ethiopian industry is limited and centered on processing agricultural commodities. Principal manufactured products include fabrics, leather goods, footwear, cement, and beer. The principal manufacturing center is Addis Ababa.

D

Energy

About 96 percent (1997) of the energy used in Ethiopia comes from traditional fuels such as firewood, charcoal, and dried animal manure. Ethiopia has great potential for producing hydroelectricity. About 99 percent (2003) of the small amount of electricity used in the country comes from hydroelectric facilities.

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