Ethiopia

Economy

Ethiopia is an extremely poor and overwhelmingly agricultural country, with agriculture employing 80% of the people and farm products accounting for almost half of the country's GDP and 60% of its exports (mainly coffee). The great majority of the population is engaged in subsistence farming. The chief farm products are cereals, pulses, coffee, oilseed, cotton, sugarcane, potatoes, khat, and cut flowers. Large numbers of cattle, sheep, and goats are raised, and there is a fishing industry. Because of its degraded lands, poor cultivation practices, and frequent periods of drought, Ethiopia has to rely on extensive food imports.

Industry, which is largely state-run, is mostly restricted to agricultural processing and the manufacture of consumer goods. The main industrial centers are Addis Ababa, Dire Dawa, and Nazret. The leading manufactures include processed food, beverages, textiles, leather and leather goods, chemicals, and metal products. No large-scale mineral deposits have been found in Ethiopia; gold, platinum, copper, potash, and natural gas are extracted in small quantities. The country is developing its hydroelectric capacity, which is significant; the electricity being produced is for both domestic use and export.

Ethiopia has a poor transportation network, with few year-round roads. The country's one rail line links Addis Ababa and Djibouti; plans for its revitalization were announced in 1998. The chief ports serving Ethiopia, which became landlocked with Eritrean independence, are in other countries: Djibouti, in the country of Djibouti, and Aseb and Massawa, in Eritrea. The border war that began in 1998 ended Ethiopian use of Eritrea's ports.

The annual value of imports into Ethiopia is usually considerably higher than the value of its exports. The principal imports are food and live animals, petroleum and petroleum products, chemicals, machinery, motor vehicles, cereals, and textiles. The main exports are coffee, khat, gold, leather products, live animals, and oilseeds. The leading trade partners are China, Saudi Arabia, the United States, and Italy.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

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