Economic Indicator’s
and Business in Ethiopia
By- Nikhil Gangula - 015
Abhishek Mishra - 035
Chaitali Kharat - 028
Shruti Pathak - 042
Uday Vora - 060
Rohit Mhandelkar - 034
Manish Chiplunkar - 007
Darshan Patil - 044
Leena Joshi - 022
Sakshi Bele -002
CONTENT
About Ethiopia
Gross Domestic Product (GDP)
Population Growth
Employment
Import/Export
Inflation rate
Stock Exchange
Examples of Businesses
Ethiopia
• Ethiopia is one of the fastest-growing economies in the world and
most populated country in the Horn of Africa region of East Africa.
• The economy of Ethiopia is a Mixed and transition Economy with a
large public sector.
• The Government of Ethiopia is in the process of privatizing many of
the state-owned businesses and moving toward a Market Economy.
• The banking, telecommunication and transportation sectors of the
economy are dominated by government – owned companies.
• Coffee was first discovered in Ethiopia and moved around the world
through slave trading and other means.
• Ethiopia's economy is based on agriculture, which accounts for 46%
of GDP and 85% of total employment.
Gross Domestic Product (GDP)
Introduction
• Ethiopia's GDP in 2014 was $55.6 billion.
• Reached an estimated $163.7 billion in 2023 - approx. 194% increase.
• The country's GDP in current prices was forecast to continuously increase
between 2024 and 2029, with a total increase of 163.6%.
Causes
• Strong economic expansion and rising consumer demand.
• Tourism, Air Freight and Telecommunications.
Effects
• Creates opportunities for businesses in these industries.
• Creates Employment.
• Increases Purchasing Power of each individuals.
Tourism & Transportation Service Business
Population Growth
Introduction Age Structure in %
• Ethiopia is the second populated city in African Continent. 3%
• Population grew from 20 million (1960) to 128 million (2023).
• As per 2023, The Population of Males and Females are 63.55 million
and 62.98 million respectively. 46%
• Average annual growth rate of 3%. 51%
Causes
• High fertility rates (Avg 4.5 children per woman).
under 15 Age 15 to 64 Age
• Limited family planning access. Above 64 Age
• Cultural preference for large families.
Effects
• Rapid urbanization.
• Pressure on infrastructure and resources.
• Strain on healthcare and education.
Challenges
• Inadequate urban infrastructure.
• Cultural barriers to small families.
Employment
Introduction
• As of 2023, Ethiopia's employment to population ratio for individuals aged
15 and older is reported at 77.61%.
• This high percentage indicates a significant portion of the working-age
population is engaged in employment.
• In Ethiopia, the labor force participation rate among females is 74.8% and
among males is 85.9% for 2023.
• Average salary in Ethiopia is Approx $100 to $300 per month.
Opportunities
• Advantageous for new businesses aiming to tap into a large labor pool.
• The cessation of hostilities in conflict-affected areas is also a positive sign
for stability, which is crucial for business operations.
• Low production costs. Land, labor, and energy costs are low relative to other
African and global markets.
• Ethiopia is the early stages of market liberalization and
privatization. This is creating new opportunities.
Import/Export
Introduction
• As per 2023, Ethiopia has a large domestic market with a total population
of over 128 million people.
• It the second most populous country in Africa after Nigeria.
• Ethiopia has a high level of specialization in Coffee, Other Oily Seeds, Flax
Yarn etc
• Ethiopia’s major goods exports included coffee (27%), gold (15%), oil seeds
(9%), vegetables (7%), flowers (5%) and legumes (5%).
• By region, Ethiopia’s goods exports went to Asia (48%), Europe (21%), the
Americas (15%), and Africa (15%).
• The top five destinations for Ethiopian exports were United Arab Emirates
(18%), the United States (14%), Somalia (9%), China (7%), and Germany
(6%).
• The majority of Ethiopia’s imports come from Asia (61%,
with 40% originating from China) followed by Europe (25%),
and the Americas (8%, the vast majority (89%) originating from
the United States), and other countries in Africa (7%).
Top U.S. Exports to Ethiopia Top U.S. Imports from Ethiopia
(Million) (Million)
Product Value Product Value
1 Transportation $494 Apparel and $349
Equipment accessories
2 Agricultural $290 Agricultural $214
Products products
3 Processed $85 Good returned $83
Foods
4 Other Special $46 Processed $27
classification Foods
provisions
5 Machinery, $43 Transportation $10
Except Equipment
electrical
Source: Department of Commerce, Global trade
Atlas
Inflation Rate
• Current Inflation rate of Ethiopia is 19.90%
• A significant decline has been seen from 29.30% to 19.90% during the same
period in previous year.
• Maximum inflation rate to have ever reached is 37.18% during May 2022 .
• Minimum inflation rate of 4.26% was recorded in January 2017.
• Inflation rate have started showing a decline from may 2022.
• This decline is just in line with the inflation target set by National Bank of Ethiopia
in its Strategy Plan a year ago.
• The average inflation rate in Ethiopia was forecast to continuously decrease
between 2024 and 2029 by in total 11.3 percentage points.
• The inflation is estimated to amount to 14.28 percent in 2029.
Stock Exchange
Ethiopia’s new ESX, or the stock market, is set to become a reality in 2024-
25. In the last five years, there have been continuous efforts by the Ethiopian
finance ministry in association with African market specialists to pave the
way for its stock market.
Prioritizing Physical Infrastructure:
For starters, Ethiopia needs to upgrade its internet and cell phone
capabilities. It is a digital and tech-driven age, and Ethiopia needs to set foot
in and ensure fast and accurate trading.
In 2023, Ethiopia started selling shares for the ESX setup. This effort aligns
with homegrown economic reform's aim to diversify the Ethiopian economy.
ESX is expected to operate in 2024, introducing at least 50 companies
initially.
Economic Indicators Impacting the Ethiopian Stock Exchange:
• GDP Growth
• Inflation
Financial Education and Advisory Services
Examples of Businesses
Alkane Chemicals PLC
Alkane Chemicals PLC formed in 2015 and operates in
the exporting of agricultural products such as oil seeds,
pulses, cereals, gum olibanum, horticulture, and so on in
Ethiopia.
Healthcare Industry.
Children Educational Products
