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Ethiopia: Country Analysis

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Submitted By spperavali
Words 2646
Pages 11
Contents 1. Introduction to Ethiopia’s Economy 3 Agriculture effect on economy 4 2. Ethiopian Economy Facts 9 3. GDP Projection 14 Analysis of various factors 17 Inflation 17 Interest Rates 17 Exports and Imports 18 Trend Analysis 18 4. Conclusion 19 5. References 20

1. Introduction to Ethiopia’s Economy

Ethiopian economy is mainly based on agriculture sector, which accounts for 46% of the GDP and 85% of the total employment. Coffee has been a major crop which also mainly contributes to Ethiopia’s exports to the other countries. Ineffective cultivation practices and inadequate rainfall are the major deterrents to the agricultural sector. But recent joint efforts by the Ethiopia Government and aid agencies are helping to upgrade the traditional agricultural practices. This has significantly contribution to the reduction in number of Ethiopians suffering from starvation. The sectors of banking which comprises Insurance and Micro-credit industries are not open to foreign investors, though Ethiopia had huge inflows of investment in other commercial agricultural sectors like leather and textile.

The graph shows Ethiopian economy’s sector-wise performance from the year 2004 to 2010. The agricultural sector has seen constant decline from 65% to 30% chiefly due to minimal rainfall. Soil is not fertile for the harvesting, so the crops were not growing properly. In industry sector emerging as it can be seen from growth up to 60% in 2010 as compare to 20% in 2004. The service sector has shown no sign of improvement as it remains constant at 10%.
The Ethiopian constitution grants the ownership titles of lands to the government which in turn provides it to the tenants on long-term leases. More recognizable rights are granted to the tenants with continued occupancy .
While the Ethiopian GDP growth has continued to remain high, their income

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