Economy Ethiopia
Economy - overview:
Ethiopia's poverty-stricken economy is based on agriculture, which
accounts for half of GDP, 60% 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 $156 million in 2002, but historically
low prices have seen many farmers switching to qat to supplement
income. The war with Eritrea in 1998-2000 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. Drought struck again late in 2002, leading to
a 2% decline in GDP in 2003. Return to normal weather patterns late
in 2003 should help agricultural and GDP growth recover in 2004. The
government estimates that annual growth of 7% is needed to reduce
poverty.
GDP:
purchasing power parity - $46.81 billion (2003 est.)
GDP - real growth rate:
-3.8% (2003 est.)
GDP - per capita:
purchasing power parity - $700 (2003 est.)
GDP - composition by sector: agriculture: 46% industry: 12.6% services: 41.4% (2003 est.)
Investment (gross fixed):
17% of GDP (2003)
Population below poverty line:
50% (2003 est.)
Household income or consumption by percentage share:
lowest 10%: 3%
highest 10%: 33.7% (1995)
Distribution of family income - Gini index:
40 (1995)