Geography and Population

Ethiopia is the most populous country in East Africa. It is landlocked with an area of 1,104,300 km2 comprising 1 million km2 of land and 104,300 km2 of water. Its land boundaries extend 5,925 km and are shared with its 6 neighbouring countries. It shares a boundary with North and South Sudan to the west, Somalia and Djibouti to the east, Eritrea to the north and northwest and Kenya to the south.

Ethiopia is one of the world’s oldest countries, its territorial extent having varied over millennia. In ancient times, it was centred at Aksum, an imperial capital located in the northern part of modern Ethiopia, approximately 100 miles (160 km) from the Red Sea.

The present territory was consolidated during the 19th and 20th centuries as European powers encroached upon Ethiopia’s historical domain. The population of Ethiopia is approximately 106.5 million people from ethnically and culturally diverse groups. Oromo is the largest ethnic group, followed by Amhara. The other ethnic groups include the Somali, Tigray, Sidama, Gurage Wollaytte, Afar, Hadiya, and Gamo groups.

Nearly 100 languages are used in Ethiopia, but Amharic is the official language. The two main religions are Islam and Christianity. Ethiopia has a federal system of government with nine member states, the boundaries of which are determined based on ethnic majority.

The president is Ethiopia’s ceremonial head of state. Authority is vested in the prime minister, who has the right to appoint certain ministers.

The Ethiopian Parliament has two houses. The main legislative body is the lower House of People’s Representatives and consists of 546 directly elected members. The upper House of Federation has 153 members chosen by regional governments.

Economic Overview

Ethiopia has a Gross Domestic Product (GDP) of approximately 76.9 billion dollars. The GDP grew 7.5% in 2017 and is expected to increase over the next years if the social and political environment remains stable.

Agriculture: Agriculture is Ethiopia’s economic mainstay. It contributes nearly 35.8% to the country’s GDP, represents 83% of total exports and employs nearly 80% of the workforce. The main agricultural exports are coffee and tea. Ethiopia shows great potential in coffee production, followed by grains, livestock and fishery.  

Livestock is an integral part of agriculture, and live animals and their products account for nearly 40% of the agricultural economy. The sector is also estimated to represent 10% of the GDP and provides employment to over 30% of the agricultural labour force. Livestock serves as sources of food, manure, raw materials, investment, security, and foreign exchange earnings. It also symbolises social and cultural identity. Ethiopia boasts a large livestock population, estimated at approximately 43.1 million cows, 23.6 million sheep, and 18.6 million goats.

Service: Service is one of the main employment sectors in Ethiopia, representing nearly 42% of the country’s GDP. The Ethiopian government plans to restructure the economy from agriculturally based to a diversified economy in which the service industry could constitute an important economic sector.

Tourism is one of the foundations of the service sector. Currently, it contributes only 1.2% to the Gross Domestic Product (GDP) but is planned to contribute 9.0% by 2024.

Manufacturing: Manufacturing represents nearly 10% of Ethiopia’s GDP. Products are primarily for domestic consumption. Among the most important products are processed foods and beverages, textiles, tobacco, leather, footwear and chemical products.

Infrastructure: As infrastructure is a prerequisite for all economic development, Ethiopia implemented several mega projects to upgrade its infrastructure. Successful projects include Ethiopia Airlines, a leading regional carrier, upgrades to its network of trunk roads, and the rapid expansion of access to water and sanitation.

The modern electrified railway project was completed in 2016. The railway, which measures 752 km, is the first modern electrified railway line in East Africa. It will facilitate transportation between two countries. The 3.4-billion-dollar project was financed by China’s Exim Bank and implemented by the China Railway Group and China Civil Engineering Construction Corporation. The railway is the first step in a vast 5,000 km-long network of rail that Ethiopia aims to build by 2020, connecting the country to Kenya, Sudan and South Sudan.

Grand Ethiopian Renaissance Dam: In response to growing energy demands, Ethiopia launched a mega project in 2011 called the ‘Grand Ethiopian Renaissance Dam’. Upon completion, the dam will be the largest hydroelectric power plant in Africa and the 7th largest in the world.