Ethiopia 

Ethiopia country policy

Policy established 13 July 1998

• The country ceiling is 80 mln euro
• Early warning signal 30 mln euro
• Public buyers: ORIO facility
• Private buyers: SIF facility, FX generating buyers only

Country class: 7

Restrictions

• Special conditions, consult your accountmanager

Ethiopia country facts

Atradius DSB Economic Research

Country Report last updated :  14h February 2008

Country :  ETHIOPIA 

Political Situation
Relatively Stable Despite Widespread DISCONTENT

Head of state
President Girma Woldegiorgis (since 2001, reelected in October 2007)

Form of government
Coalition government of the EPRDF, a party dominated by the Tigaraye tribe. Public administration based on ethnic federalism and highly decentralized.

Member of
IMF, IBRD, UN, AfDB, AU, Comesa

Internal Economic Situation :   High Growth  

General situation
Ethiopia’s economy consists mainly of subsistence agriculture. Coffee and livestock are the most important export products. Droughts, soil degradation and the prohibition to own land hinder the development of more intensive agriculture. Due to the heavy reliance on agriculture the weather conditions are decisive for economic growth. Ethiopia’s lack of ports and bad infrastructure are other obstacles for development. The harvest of 2005/2006 was exceptionally good due to good rainfall, resulting is GDP growth of 7.5%. The country is also very dependant on foreign aid. Investment climate is poor, due to an incompetent judicial system, lots of red tape and corruption. Ethiopia is strongly dependant on foreign aid. It currently receives $1.9 billion per year. Financial sector is shallow but well-capitalized, profitable and liquid. However state-owned banks suffer from NPL’s (22%).

External Economic Situation
Very Weak

Main sources of foreign exchange
Coffee

Main foreign markets
EU (28%), Djibouti (13%), Japan (8%)

Main expenses of foreign exchange
food, petroleum, capital goods, chemicals