Economy Ethiopia
Economy - overview:
Ethiopia's poverty-stricken economy is based on agriculture, which
accounts for half of GDP, 85% of exports, and 80% of total
employment. The agricultural sector suffers from frequent drought
and poor cultivation practices. Coffee is critical to the Ethiopian
economy with exports of some $270 million in 2000/01, but
historically low prices have seen many farmers switching to qat to
supplement their income. The war with Eritrea in 1999-2000 and
recurrent drought have buffeted the economy, in particular coffee
production. In November 2001 Ethiopia qualified for debt relief from
the Highly Indebted Poor Countries (HIPC) initiative. Under
Ethiopia's land tenure system, the government owns all land and
provides long-term leases to the tenants; the system continues to
hamper growth in the industrial sector as entrepreneurs are unable
to use land as collateral for loans. Strong growth in 2002 resulted
from good rainfall early in the year, the cessation of hostilities,
and renewed foreign aid and debt relief. But drought struck again
late in 2002, and the World Food Program (WFP) estimates 14 million
Ethiopians need food immediately to survive into 2003. The
government estimates than annual growth of 7% is needed to reduce
poverty, yet the maintenance of 5% in 2003 will be quite difficult
(one estimate is for 1.5% growth).
GDP:
purchasing power parity - $48.53 billion (2002 est.)
GDP - real growth rate:
3% (2002 est.)
GDP - per capita:
purchasing power parity - $700 (2002 est.)
GDP - composition by sector: agriculture: 52% industry: 11% services: 37% (2001 est.)
Population below poverty line:
45% (2002 est.)
Household income or consumption by percentage share:
lowest 10%: 3%
highest 10%: 33.7% (1995)
Distribution of family income - Gini index:
40 (1995)
Inflation rate (consumer prices):
4% (2003 est.)