Economy of 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.

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.

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.

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.

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.

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.