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Ethiopia Print & Pack Expo
Date:2019-05-05

9 – 13 May 2019, Addis Ababa – Ethiopia

Int'l Trade Exhibition on all kinds of Printing & packaging Equipments, Machinery & Technology etc.

BRIEF INTRODUCTION

With a population of approximately 120 million and an annual population growth rate of about 4.50 percent, Ethiopia is the third most populous country in Africa, after Nigeria and Egypt. Land area is 1.14 million square kilometers (423,828 square miles). With a per capita income in 2002 of roughly $90, however, Ethiopia ranks among the poorest countries in the world. Despite its poverty, Ethiopia has been among the top ten markets in sub-Saharan Africa over the last several years, due primarily to airplane exports. U.S. exports to Ethiopia in 2002 were $60 million.

The agricultural sector, consisting mostly of small holdings, accounts for about 45 percent of the nation’s gross domestic product, 85 percent of total employment, and more than 80 percent of merchandise exports

As a land-locked country, Ethiopia relies on the port of Djibouti for nearly all of its trade, although it is exploring the use of alternative seaports in Sudan, Kenya, and Somaliland. Ethiopia’s primary exports are coffee, chat, hides and skins, sesame seeds, pulses, live animals, honey and beeswax, spices, natural gum, fruits and vegetables. Coffee is by far the most important export commodity, constituting between 40-50 percent of exports by value. The country’s main imports include motor vehicles, petroleum products, civil and military aircraft, spare parts, construction equipment, medical and pharmaceutical products, agricultural and industrial chemicals, agricultural machinery, fertilizers, irrigation equipment, and food grains. The major manufacturing sub-sectors in Ethiopia are food processing, beverages, textiles, clothing, and leather goods.

Since the early 1990s, Ethiopia has pursued a market-oriented economic development strategy and focused on agricultural development as the catalyst for economic growth. It has eliminated discriminatory tax, credit, and foreign trade treatment of the private sector and tried to simplify bureaucratic regulations and procedures. Ethiopia’s reform program has achieved some success in stabilizing the economy and aiding the transition to a free market system. From 1998-2002, the country achieved an annual average economic growth rate of about 4.2% and annual inflation rate averaged – 0.4%. In FY 2003, GDP is expected to fall by 3.8% with agricultural output falling by 12.2% due to the drought.

Government budget deficit before donor grants was about 14% of GDP in FY 2001/02. External sources, particularly external borrowing and counterpart funds financed about 89% of the deficit. The Ethiopian Government approved a budget of $2.24 billion for FY2003/04, of which $919 million is for recurrent expenditures, $628 million for capital expenditures and $698 million for subsidy to the regions. Some 64% or $1.43 billion of the budget is expected to be secured from domestic sources ($1.27 billion from internal revenues and $160 million from domestic borrowing) and the remaining $810 million from foreign loans and grants (the exchange rate is Birr 8.61 to $1.00 as of September 2003).

The new peace agreement with Eritrea has improved Ethiopia’s relations with the international financial institutions and other donors. In May 2003, the World Bank approved a $1.5 billion loan for undertaking various development projects to be implemented under the Country Assistance Strategy (CAS), while the African Development Bank granted Ethiopia $200 million for the same purpose. The funds would be used during 2003 – 2005 for food security, rural development, capacity building, infrastructure development activities and prevention of HIV/AIDS. Similarly, the EU has allocated over 500 million Euros (about $570 million) towards the development of infrastructure, food security and capacity building projects between 2002 and 2007.

Foreign investors find Ethiopia a difficult environment in which to operate. Many sectors, particularly in services and trade, are off-limits to foreigners. The government retains rigid control over the utilities sector and prohibits foreign participation in banking and insurance. Land cannot be purchased or sold, but can be leased. Government procedures and paperwork are usually complicated and time-consuming. The commercial code is antiquated and the under-staffed judicial system is inadequate. The transportation and telecommunications systems, especially internet service, are fair to poor. Despite a relatively well-educated labor force, there are shortages in highly skilled professions and proficiency in the English language is not universal.

In the short to medium term, Ethiopia’s economic performance will depend on its ability to continuously improve the business environment for the private sector, further liberalize the economy – particularly in the financial and telecommunications sectors, attract foreign investments, speed-up the privatization process, streamline the bureaucracy and maintain political stability. Other factors such as favorable weather conditions and external market situations will also play an important role over the coming years.

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