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Business images of Ethiopia

Economy of Ethiopia

The economy of Ethiopia is a mixed and transition economy with a large public sector. The government of Ethiopia is in the process of privatizing many of the state-owned businesses and moving toward a market economy. The banking, telecommunication and transportation sectors of the economy are dominated by government-owned companies.<br>Ethiopia has one of the fastest-growing economies in the world and is Africa's second most populous country. Many properties owned by the government during the previous regime have now been privatized or are in the process of privatization and the liberalization of its financial sector in the near future. However, certain sectors such as telecommunications, financial and insurance services, air and land transportation services, and retail, are considered as strategic sectors and are expected to remain under state control for the foreseeable future. Almost 50% of Ethiopia's population is under the age of 18. Even though education enrolment at primary and tertiary level has increased significantly, job creation has not caught up with the increased output from educational institutes.<br>In 2023 Ethiopia has reached an estimated GDP scale of 156.1 billion dollars nominal, for PPP the country's economy has reached an estimated 393.85 billion dollars. This mostly comes from a services-based economy with agriculture.

Top Sectors in Ethiopia

Agriculture in Ethiopia

Agriculture accounts for almost 40.5% of Ethiopia's GDP, 81% of exports, and 85% of the labor force. Many other economic activities depend on agriculture, including marketing, processing, and export of agricultural products. Production is overwhelmingly of a subsistence nature, and a large part of commodity exports are provided by the small agricultural cash crop sector. Principal crops include coffee, pulses, oilseeds, cereals, potatoes, sugarcane, and vegetables. Exports are almost entirely agricultural commodities, with coffee being the largest foreign exchange earner, and the flower industry becoming a new source of revenue. For 2005/2006, Ethiopia's coffee exports represented 0.9% of world exports, and oilseeds and flowers each represented 0.5%. Ethiopia is Africa's second biggest maize producer. In 2000, Ethiopia's livestock contributed 19% of total GDP.<br>some countries that import most of their food, such as Saudi Arabia, have begun planning the purchase and development of large tracts of arable land in developing countries such as Ethiopia. This land grabbing has raised fears of food being exported to more prosperous countries while the local population faces its own shortage.

Textile Industry in Ethiopia

Employees of Ethiopian garment factories, who work for brands such as Guess, H&M, or Calvin Klein, receive a monthly salary of $26. These very low wages have led to low productivity, frequent strikes, and high turnover. Some factories have replaced all their employees on average every 12 months, according to the 2019 report of the Stern Centre for Business and Human Rights at New York University.The report states: "Rather than the docile and cheap labor force promoted in Ethiopia, foreign-based suppliers have met employees who are unhappy with their pay and living conditions and who want to protest more and more by stopping work or even quitting. In their eagerness to create a 'made in Ethiopia' brand, the government, global brands, and foreign manufacturers did not anticipate that the base salary was simply too low for workers to make a living from.

Minerals and Mining in Ethiopia

Mining is important to the economy of Ethiopia as a diversification from agriculture. Currently, mining comprises only 1% of GDP. Gold, gemstones, and industrial minerals are important commodities for the country's export-oriented growth strategy.<br>The country has deposits of coal, opal, gemstones, kaolin, iron ore, soda ash, and tantalum, but only gold is mined in significant quantities. Salt extraction from salt beds in the Afar Depression, as well as from salt springs in Dire and Afder districts in the south, is primarily for internal use, with only negligible amounts exported.<br>The mineral industry lacked significance, contributing less than 0.2 percent of Ethiopia's GDP. Mining for gold has become a key development sector in the country. Gold exports, which were just US$5 million in 2001, increased substantially to US$602 million in 2012. In 2001, gold production amounted to approximately 3.4 tons.

Energy in Ethiopia

Waterpower and forests are Ethiopia's main energy sources. The country derives about 90 percent of its electricity needs from hydropower, which means that electricity generation, as with agriculture, is dependent on abundant rainfall. Present installed capacity is rated at about 2000 megawatts, with planned expansion to 10,000 megawatts. In general, Ethiopians rely on forests for nearly all of their energy and construction needs; the result has been deforestation of much of the highlands during the last three decades. Ethiopia has set out plans to invest $40 billion to 71 energy projects by 2030.<br>Recent oil and gas discoveries across East Africa have seen the region emerge as a new player in the global oil and gas industry. As exciting as the huge gas fields of East Africa are, however, the strong decline in oil prices and expectations for an L-shaped recovery with low prices over the coming years is<br>increasingly challenging the economic viability of the industry in this region. The reserves are estimated at 4 trillion cubic feet, while exploration for gas and oil is underway in the Gambela Region bordering South Sudan. The discoveries were expected to drive billions of dollars in annual investment to the region over the next decade. According to BMI estimates, the findings in the last few years are more than that of any other region in the world, and the discoveries are expected to continue for the next few years.

Manufacturing in Ethiopia

A program to privatize state-owned enterprises has been underway since the late 1990s. There has been a large growth of manufacturing in Ethiopia. Several industrial parks have been built with a focus on textiles.

Tourism in Ethiopia

Aside from wholesale and retail trade, transportation, and communications, the services sector consists almost entirely of tourism. Developed in the 1960s, tourism declined greatly during the later 1970s and the 1980s under the military government. Recovery began in the 1990s, but growth has been constrained by the lack of suitable hotels and other infrastructure, despite a boom in construction of small and medium-sized hotels and restaurants, and by the impact of drought, the 1998 2000 war with Eritrea, and the specter of terrorism. In 2002, more than 156,000 tourists entered the country, many of them Ethiopians visiting from abroad, spending more than US$77 million. In 2008, the number of tourists entering the country had increased to 330,000.


Ethiopia - Key Economic Indicators

Exports and Imports

Ethiopia's exports and imports data show a growing trade activity. In recent years, the country has been increasing its exports, including coffee, oilseeds, and textiles, among other commodities. Imports consist mainly of machinery, petroleum products, and chemicals. In 2023, Ethiopia's total exports were approximately $3.5 billion, while imports amounted to $12.2 billion.

Infrastructure

Infrastructure development, particularly in roads and bridges, is a priority for Ethiopia's economic growth. The government has been investing significantly in expanding the road network and improving transportation links between regions. Currently, Ethiopia has over 113,000 kilometers of all-weather roads, facilitating trade and connectivity across the country.

Balance of Trade

Ethiopia's balance of trade reflects a trade deficit, with imports exceeding exports. The trade deficit is a challenge for the country's economy, as it indicates a reliance on imported goods. In 2023, the trade deficit was approximately $8.7 billion, highlighting the need for strategies to boost export capacity and diversify the economy.

Fiscal Policy

Ethiopia's fiscal policy involves government spending aimed at infrastructure development, education, healthcare, and social programs. The government's expenditure in 2023 amounted to around $15 billion, with a focus on improving public services and supporting economic growth. Taxation plays a crucial role in revenue generation, with the tax-to-GDP ratio standing at approximately 14%.

Monetary Policy

The National Bank of Ethiopia is responsible for monetary policy in the country. Monetary policy aims to control inflation, stabilize the currency, and support economic growth. The NBE manages interest rates and regulates the money supply to achieve these objectives. Inflation in Ethiopia was around 11% in 2023, within the government's target range.

Trade Agreements

Ethiopia is a member of various trade agreements and organizations, including the Common Market for Eastern and Southern Africa and the Intergovernmental Authority on Development. Additionally, Ethiopia benefits from trade preferences under the African Growth and Opportunity Act, which allows duty-free access to the U.S. market for eligible goods.

Environmental Regulations

Environmental regulations in Ethiopia aim to promote sustainable development and protect natural resources. The government has implemented laws and policies to address environmental challenges such as deforestation, land degradation, and pollution. Ethiopia is committed to international agreements on climate change and biodiversity conservation, aligning its environmental regulations with global standards.

Tax System in Ethiopia

Capital Gains Tax: Ethiopia imposes a capital gains tax on profits derived from the sale of assets, including investments such as stocks, bonds, and real estate. The tax rate varies depending on the type of asset and the holding period.
Corporate Tax Rate: The corporate tax rate in Ethiopia is 30% on business profits. This rate applies to both domestic and foreign companies operating in Ethiopia, with certain exemptions and incentives available for specific sectors and investments.
Sales Tax: Ethiopia levies a value-added tax (VAT) on goods and services, which is currently set at a standard rate of 15%. Certain goods and services may be exempt or subject to reduced rates, depending on government regulations.
Property Tax: Property tax in Ethiopia is imposed on real estate, including land, buildings, and other immovable properties. The tax rate varies depending on the location, size, and value of the property, with local governments responsible for assessment and collection.
Payroll Tax: Ethiopia imposes payroll taxes on wages and salaries, which are used to fund social security programs and other government initiatives. Both employers and employees are required to contribute to social security, with rates varying depending on income levels and other factors.
Tax Deductions and Credits: Ethiopia provides various tax deductions and credits to reduce tax liability and encourage certain behaviors or investments. These may include deductions for expenses incurred in business operations, investment incentives for specific industries or regions, and credits for education, healthcare, or charitable contributions.
Tax Compliance: Tax compliance in Ethiopia involves the efficiency of tax collection and enforcement mechanisms. The government has been working to improve tax administration systems, streamline processes, and enhance taxpayer education and compliance efforts.
Tax Burden: The overall tax burden in Ethiopia refers to the total amount of taxes paid by individuals and businesses as a percentage of GDP or income. While tax rates in Ethiopia may be relatively high compared to some other countries, the tax burden varies depending on income levels, exemptions, deductions, and compliance levels. Efforts to balance revenue generation with economic growth and development goals are ongoing.

338 Live Notices for Ethiopia ....

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Provision for the EPSS Semera Warehouse Improvement Civil Works
country Ethiopia
posting date07 Dec 2024
deadline30 Dec 2024
RECONSTRUCTION/REHABILITATION OF 13 JICA-FUNDED SCHOOLS IN AMHARA REGION
country Ethiopia
posting date07 Dec 2024
deadline26 Dec 2024
UPGRADING HEALTH FACILITIES IN 33 HEALTH CENTRES 2HOSPITALS IN AMHARA
country Ethiopia
posting date07 Dec 2024
deadline26 Dec 2024
Provision for Furniture and metalwork
country Ethiopia
posting date07 Dec 2024
deadline11 Dec 2024
Provision for Printing service and Visibility items
country Ethiopia
posting date07 Dec 2024
deadline11 Dec 2024
Supply of Scholastic Material
country Ethiopia
posting date07 Dec 2024
deadline11 Dec 2024
Tractor and loader rent for farm Preparation
country Ethiopia
posting date07 Dec 2024
deadline11 Dec 2024
Supply of a field vehicle for project activities
country Ethiopia
posting date07 Dec 2024
deadline26 Jan 2025
Supply of Medical Drugs Consumables, and Equipment
country Ethiopia
posting date07 Dec 2024
deadline06 Jan 2025
Water supply wells drilling & commissioning for Bole-Rwanda & Bole-Bulbula Branches
country Ethiopia
posting date07 Dec 2024
deadline19 Dec 2024
PROVISION OF VEHICLE MAINTENANCE AND REPAIR- GARAGE SERVICE
country Ethiopia
posting date07 Dec 2024
deadline18 Dec 2024
SUPPLY AND INSTALLATION OF GLOBAL POSITIONING SYSTEM (GPS) BASED VEHICLE TRACKING SYSTEM ADVERTISMENT
country Ethiopia
posting date07 Dec 2024
deadline16 Dec 2024
Purchase Lap Top Computer for project activities implementation
country Ethiopia
posting date07 Dec 2024
deadline12 Dec 2024
Provision for Generator Set (250KVA) With ATS
country Ethiopia
posting date07 Dec 2024
deadline18 Dec 2024
purchase Five (5) new hardtop Station wagon vehicles.
country Ethiopia
posting date07 Dec 2024
deadline16 Dec 2024
procurement of the Hidasie Telecom S.C. Head Quarter and Business Complex Finishing Work from G+5th floor and External Façade work
country Ethiopia
posting date07 Dec 2024
deadline26 Dec 2024
PROCUREMENT OF EXTERNAL AUDIT SERVICE
country Ethiopia
posting date07 Dec 2024
deadline11 Dec 2024
Design, Construction Supervision & Contract Administration of Bole Airport Waste Management System Study Project
country Ethiopia
posting date07 Dec 2024
deadline20 Dec 2024
Provision for Consulting Architects and Engineers
country Ethiopia
posting date07 Dec 2024
deadline24 Dec 2024
Etablishment work of Disaster Recovery (DR) site
country Ethiopia
posting date07 Dec 2024
deadline01 Jan 2025

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