Growing exposure to the unfavorable external environment

D4

SENSITIVE RISK

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD107.645 bn (World ranking 64, World Bank 2020)
Population 114.964 mn (World ranking 12, World Bank 2020)
Form of state Federal Parliamentary Republic
Head of government Abiy Ahmed Ali (PM)
Next elections 2026, legislative
  • Key partnership with China on Africa’s new silk road
  • State committed to meeting development objectives such as the MDGs and SDGs
  • The international community is supportive, particularly in times of drought-induced famine
  • High GDP growth rates in recent years, with an annual average +10.2% in 2006-16
  • Large domestic market (population over 95mn)
  • Fastest growing manufacturing sector in Africa.
  • Strong track record of attracting FDI from both advanced and emerging economies.
  • International agencies periodically question the commitment on protection of human rights
  • The region (Horn of Africa) is high risk. Ethiopia has borders with Sudan, South Sudan, Eritrea and Somalia - all offering challenges
  • The country is landlocked, which increases transport costs and vulnerability to external shocks.
  • High dependence on rain-fed agricultural output but recurrent drought, locust infestations etc. Water rights are a source of potential conflict in the Nile area.
  • Continuing aid dependence, despite significant external debt forgiveness and re-profiling.
  • Fiscal and current account deficits and weak foreign exchange reserves (about 2 months of import cover)

Trade structure by destination/origin

(% of total, 2020)

Exports Rank Imports
Sudan 27.7%
1
29.7% China
Hong Kong 10.8%
2
9.8% United States
China 9.6%
3
8.1% India
United States 9.0%
4
6.6% Kuwait
Switzerland 4.4%
5
4.1% Turkey

Trade structure by product

(% of total, 2020)

Exports Rank Imports
Coffee, tea, cocoa, spices, and manufactures thereof 28.8%
1
8.9% Petroleum, petroleum products ans related materials
Vegetables and fruits 17.1%
2
7.4% Road vehicles
Oil seeds and oleaginous fruits 14.2%
3
7.0% Cereals and cereal preparations
Leather, leather manufactures and dressed furskins 8.0%
4
6.1% Electrical machinery, apparatus and appliances, n.e.s.
Gold, non-monetary (excluding gold ores and concentrates) 4.4%
5
6.0% Iron and steel
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