Official Name: Federal Democratic Republic of Ethiopia (FDRE)

Political System: Federal system with a multi-party democracy.

Head of State:


 


President - Sahle-Work Zewde, (Parliament elected Sahle-Work Zewde as the Ethiopia's first woman president in October 2018.)




 

Head of Government:



Prime Minister – Dr. Abiy Ahmed









Location:  Eastern Africa, west of Somalia

Geography: Eastern Africa, west of Somalia

Geographic coordinates: 8 00 N, 38 00 E

Map references: Africa

Time difference: UTC+3

Area:

total: 1,104,300 sq km 

land: 1,096,570 sq km 

water: 7,730 sq km 

Population: 108,386,391 (July 2018 est.) the second most populous country in Africa and the 13th in the world.

Urban population: 20.8% of total population (2018)

Rate of urbanization: 4.63% annual rate of change (2015-20 est.)

Addis Ababa (capital) population: 4.4 million (2018)

Government structure and plans

The FDRE comprises the Federal Government and the member states. The Federal Government and the states have legislative, executive and judicial powers. The House of People's Representatives is the highest authority of the Federal Government. The House is responsible to the people.

The country has a parliamentarian form of government with a bicameral parliament, which is comprised of the House of Peoples’ Representatives and the House of the Federation. The House of Peoples’ Representatives is the highest authority of the Federal Government and its members are elected by the people for a term of five years on the bases of direct universal suffrage. The House of the Federation is composed of representatives of Nations, Nationalities and Peoples elected by the State Councils for a five year term.

The President is the head of the Federal State and the Prime Minister, as the chief executive of the Federal Government, leads the Council of Ministers. The Prime Minister is elected from among the members of the HPR belonging to the party or coalition of parties that commands a majority in the House. The President is elected by the joint session of both houses for a six-year term and the Prime Minister, who is responsible to the HPR, is elected for a five-year term.</p>

Languages:  Amharic is the official language of Ethiopia, although English, Italian, French, and Arabic are widely spoken. In areas outside of the larger cities and towns, indigenous languages are likely to be spoken — of which there are eighty-three, with some 200 dialects. The most common of these are Orominga and Tigrinya.

Historical and Most Visited Cities:

Addis Ababa – capital of Ethiopia and one of the biggest shopping cities in Africa.

Adama – a popular weekend destination near Addis; also known as Nazret or Nazareth.

Aksum or Axum – home of ancient tombs and stelae fields, in the far north near Eritrea.

Bahir Dar – the monasteries on the islands of Lake Tana and close to the beautiful Blue Nile Falls.

Dire Dawa – the second largest city.

Gondar - the ancient capital of Ethiopia and home to the country's emperors during the 17th and 18th centuries.

Harar – ancient walled city near Dire Dawa

Lalibela – home to 11 astonishing rock-hewn churches.

Mekele – a town in the Tigrayan Highlands in the north.

Climate: Ethiopia has three different climate zones according to elevation:

Kolla (Tropical zone) - is below 1830 meters in elevation and has an average annual temperature of about 27 degree Celsius with annual rainfall about 510 millimeters. The Danakil Depression (Danakil Desert) is about 125 meters below sea level and the hottest region in Ethiopia where the temperature climbs up to 50 degree Celsius.

Woina dega (Subtropical zone) - includes the highlands areas of 1830 - 2440 meters in elevation has an average annual temperature of about 22 degree Celsius with annual rainfall between 510 and 1530 millimeters.

Dega (Cool zone) - is above 2440 meters in elevation with an average annual temperature of about 16 degree Celsius with annual rainfall between 1270 and 1280 millimeters.

The average annual temperature in Addis Ababa is 16°C (61°F), with daily maximum temperatures averaging 20 - 25°C (68 - 77°F) throughout the year, and overnight lows averaging 5 - 10°C (41 - 50°F). 

Ethiopian Seasons:

Kiremt or Meher (summer) - June, July and August are the summer season. Heavy rain falls in these three months.

Tseday (spring) - September, October and November are the spring season sometime known as the harvest season.

Bega (winter) - December, January and February are the dry season with frost in morning especially in January.

Belg (Autumn) - March, April and May are the autumn season with occasional showers. May is the hottest month in Ethiopia.

Time and calendar: Ethiopia uses the Ethiopian calendar, which dates back to the Coptic calendar 25 BC, and never adopted the Julian or Gregorian reforms. One Ethiopian year consists of twelve months, each lasting thirty days, plus a thirteenth month of five or six days (hence the "Thirteen Months of Sunshine" tourism slogan). The Ethiopian new year begins on September 10 or 11 (in the Gregorian calendar), and has accumulated 7-8 years lag behind the Gregorian calendar.

 In Ethiopia, the 12-hour clock cycles do not begin at midnight and noon, but instead are offset six hours. Thus, Ethiopians refer to midnight (or noon) as 6 o'clock.

Daylight: Being relatively close to the Equator, there is an almost constant twelve hours of daylight. In Addis Ababa, the sunrise and sunset starts at around 06:30 and 18:45 respectively

Currency: The local currency is the Ethiopian Birr.

Notes: are issued in denominations of 5, 10, 50, and 100 birr.

Coins: 1, 5, 10, 25, 50 “santim”; 1 Birr.

Currency regulations:  There is no limit to the amount of foreign currency imported into Ethiopia, but it must be declared on arrival, using a currency declaration form. Foreign currency may be changed only at authorized banks and hotels. The currency declaration form will be required by Customs on departure. Visitors may change back any excess birr into foreign currency at the airport before departure, but you must, in addition to the currency declaration form, bring with you all receipts for exchange transactions.

Traveler Visa: All visitors, except Benin, Haiti, Kenya, Micronesia, Philippines, Senegal, Singapore, St. Vincent and the Grenadines are required to obtain entry visas. Since 2002, tourists from 33 countries (listed below) are able to obtain entry visas upon their arrival at Bole International Airport in Addis Ababa, and at the airport in Dire Dawa. In August 2011, the fees for visa-upon-arrival were US$20 or EUR 17, regardless of whether one is applying for a Tourist, Business or Transit Visa. The procedure is relatively quick and painless; just look for a door with a sign "Visa" on the left hand before the immigration counters.

Nationals of the following countries can get three months tourist visas upon their arrival at Bole International Airport: Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, India, Ireland, Israel, Italy, Japan, Kuwait, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Democratic people's Republic of Korea (northern Korea), Poland, Portugal, Republic of Korea (south Korea), the Russian Federation, Slovakia, South Africa, Spain, Sweden, Switzerland, United Kingdom, United States of America.

Economy Overview

Ethiopia - the second most populous country in Africa - is a one-party state with a planned economy. For more than a decade before 2016, GDP 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’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, Chat, 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 (FDI), 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.

To support industrialization in sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather goods, and processed agricultural products, 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.

GDP (purchasing power parity):

$200.6 billion (2017 est.)

$181 billion (2016 est.)

$167.6 billion (2015 est.)

Note: data are in 2017 dollars

Country comparison to the world: 64

GDP (official exchange rate):

$80.87 billion (2017 est.)

GDP - real growth rate:

10.9% (2017 est.)

8% (2016 est.)

10.4% (2015 est.)

Country comparison to the world: 5

GDP - per capita (PPP):

$2,200 (2017 est.)

$2,000 (2016 est.)

$1,900 (2015 est.)

Note: data are in 2017 dollars

Country comparison to the world: 204

Gross national saving:

32.1% of GDP (2017 est.)

32.7% of GDP (2016 est.)

32.4% of GDP (2015 est.)

Country comparison to the world: 26

GDP - composition, by end use:

Household consumption: 69.6% (2017 est.)

Government consumption: 10% (2017 est.)

Investment in fixed capital: 43.5% (2017 est.)

Investment in inventories: -0.1% (2017 est.)

Exports of goods and services: 8.1% (2017 est.)

Imports of goods and services: -31.2% (2017 est.)

GDP - composition, by sector of origin:

Agriculture: 34.8% (2017 est.)

Industry: 21.6% (2017 est.)

Services: 43.6% (2017 est.)

Agriculture - products:

Cereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish

Industries:

food processing, beverages, textiles, leather, garments, chemicals, metals processing, cement

Industrial production growth rate:

10.5% (2017 est.)

Country comparison to the world: 13

Labor force:

52.82 million (2017 est.)

Country comparison to the world: 13

Labor force - by occupation:

Agriculture: 72.7% 

Industry: 7.4% 

Services: 19.9% (2013 est.)

Unemployment rate:

17.5% (2012 est.)

18% (2011 est.)

Country comparison to the world: 180

Exports:

$3.23 billion (2017 est.)

$2.814 billion (2016 est.)

Country comparison to the world: 127

Exports - partners:

Sudan 23.3%, Switzerland 10.2%, China 8.1%, Somalia 6.6%, Netherlands 6.2%, US 4.7%, Germany 4.7%, Saudi Arabia 4.6%, UK 4.6% (2017)

Exports - commodities:

coffee (27%, by value), oilseeds (17%), edible vegetables including khat (17%), gold (13%), flowers (7%), live animals (7%), raw leather products (3%), meat products (3%)

Imports:

$15.59 billion (2017 est.)

$14.69 billion (2016 est.)

Country comparison to the world: 89

Imports - commodities:

Machinery and aircraft (14%, by value), metal and metal products, (14%), electrical materials, (13%), petroleum products (12%), motor vehicles, (10%), chemicals and fertilizers (4%)

Imports - partners:

China 24.1%, Saudi Arabia 10.1%, India 6.4%, Kuwait 5.3%, France 5.2% (2017)

Reserves of foreign exchange and gold:

$3.013 billion (31 December 2017 est.)

$3.022 billion (31 December 2016 est.)

Country comparison to the world: 110

Debt - external:

$26.05 billion (31 December 2017 est.)

$24.82 billion (31 December 2016 est.)

Country comparison to the world: 87

Why Invest in Ethiopia

Strong Government guarantees and protections

Private property is protected by the Constitution and the investment law.

A foreign investor has the right to make remittances out of Ethiopia in convertible foreign currency at the prevailing rate of exchange.

Member of the Multilateral Investment Guarantee Agency (MIGA), a World Bank affiliate which issues guarantee against non-commercial risks in signatory countries, and of the World Intellectual Property Organization (WIPO).

Concluded over 30 bilateral investment promotion and protection agreements, of which 11 are with individual European Union Member States. Significant other partners include China, India, South Africa, and Russia, and a number of regional economic partners (Israel, Egypt, and Sudan, among others)

Affordable labor

Ethiopia’s labor law, which regulates worker-employer relations, is in line with international conventions.

The most populated country next to Nigeria with more than half of its population is in the working age.

Ethiopia’s minimum wage is among the lowest in Africa.

Generally, private sector monthly salaries for university graduates range from USD 150 to USD 200, while construction sector monthly wages range from USD 60 for daily laborers to USD 300 for a foreman (Source: Ethiopia’s Ministry of Urban Development and Construction).

Regional Hub with Access to a wild market

With a population of appx. 108 million people and a rapidly growing middle-class society, Ethiopia is the second largest market in Africa, and is also part of the Common Market for Eastern and Southern Africa (COMESA) comprising 19-member countries and over 400+ million people.

Addis Ababa has emerged as a regional hub and is home to key international organizations such as the African Union (AU) and the United Nations Economic Commission for Africa.

Addis Ababa is also the main air hub for Africa and the home of Ethiopian Airlines, which has won repeated recognition as the best airline in Africa. Ethiopian Airlines offers flights to 101 international passenger destinations (57 in Africa, 20 in Europe and America and 23 in the Middle East and Asia), 22 domestic passenger destinations, and 35 cargo destinations (21 in Africa, 11 in the Gulf, Middle East and Asia, and 3 in Europe). It carries two thirds of Africa’s air freight.

Ethiopian products have duty-free, quota-free access to wide market:

COMESA (Common Market for Eastern and Southern Africa),

19 member countries,

Over 400+ million people

AGOA (African Growth and Opportunities Act) and GSP (Generalized system of preference) of the United States Government initiatives, and

EBA (Everything But Arms) of the European Union,

Improved Economic Infrastructure (“ new power house”)

Ethiopia is the only African country whose economic growth has been consistently high for more than a decade without relying on a natural resource boom.

Power production has increased steadily over the last ten years, with 99% sourced from clean energy in the form of hydropower. Ethiopia has the second largest hydropower potential in Africa (Deloitte, 2014), and the country’s installed electricity generating capacity is expected to reach 10,000 MW by mid-2015.The Grand Ethiopian Renaissance Dam – the largest hydroelectric power dam in Africa being built on the Nile river - is expected to generate 6,000MW electricity. This coupled with Gilgel-gibe III (1,870MW) and Genale-Dawa III (254MW) and other wind power projects will make Ethiopia a regional power house.

Cheapest electricity rate in Africa and the whole world.

Expanding and improving telecommunication service.

Expanding road networks connecting national and regional markets.

Newly built Addis-Djibouti electric-powered railway - making access to port Djibouti much easier. Other standard gauge networks are in pipeline. As a significant portion of Ethiopia’s import/export trade passes through port Djibouti, the rail way construction is a huge efficiency enhancer for producers and traders. As part of this big project, a 34 km Addis Ababa light rail is fully operational while a new 756 km Addis Abeba-Djibouti electrified railway route is well completed in 2016.

Africa’s world class and star alliance member Ethiopia Airlines the passenger network covers more than 90 international destinations in the five continents in Africa, Asia, Europe South and North America.

Competitive Incentive package

Ethiopia offers a comprehensive set of incentives, particularly for priority sectors, such as:-

Customs duty payment exemption on capital goods and construction materials, and on spare parts whose value is not greater than 15% of the imported capital goods’ total value;

Investors have the right to ask refund of customs duty paid on inputs (raw materials and components) when buying capital goods or construction materials from local manufacturing industries.

Income tax exemption of up to 6 years for manufacturing and agro-processing, and of up to 9 years for agricultural investment. Additional 2-4 years income tax exemption for exporting investors located within industrial parks and 10-15 years exemption for industrial park developers;

Carry forward of losses for half of the tax holiday period;

Several export incentives, including the Duty Draw-Back, Voucher, Bonded Factory and Manufacturing Warehouse, and Export Credit Guarantee schemes.

In addition, the government guarantees the remittance of profit, dividends, principals and interest payments on external loans, and the provision of land at competitive lease prices.

Government Commitment

High level political commitment for investment promotion and protection, investment policy making is led by the Ethiopian investment board chaired by the prime minister.

Wide-ranging incentive packages for priority sectors and export oriented investments.

Bold initiative in the development of state-of the art industrial parks, electric powered railway connecting the capital and other economic corridors to the port of Djibouti.

Strategic Sector (Attractive investment areas)

Leather&Leather products

Textile & Garment

Horticulture

Agriculture

Construction

Manufacturing

Pharmaceuticals

Tourism

Power

Agro-Processing

Industrial Park

Operational Industrial Parks

Bole Lemi phase 1 IP

Hawassa IP phase I

Jimma IP

Adama IP

Kombolcha IP

Upcoming Industrial parks

Dire Dawa IP

Kilinto IP

Bole Lemhi phase 2 IP

Arerti Industry Park 

Debre-Birhan Industry Park

Bahir- Dar Industry Park