Overview

• Official Name: Federal Democratic Republic of Ethiopia
• Location: in the East of Africa, 8° 0' 0" N / 39° 0' 0" E
• Area: 1,104,300 sq. km
• Capital City: Addis Ababa
• Other major cities: Adama (Nazret or Nazareth), Hawassa (Awassa), Dire Dawa, Jimma, Bahir Dar, Mekele, Jigjiga
• Sea Port: Ethiopia is landlocked but uses Djibouti port and Tadjoura port in Djibouti; Berbera Port in Somaliland, Mombas port in Kenya and Port Sudan in Sudan are also used occasionally. 
• Major Airport: Bole International Airport located in Addis Ababa. It has two terminals: international and domestic. The domestic terminal serves domestic flights as well as Ethiopian Airlines flights to and from neighboring and some East African countries.
• Currency: Birr (1 Birr = 100 cents, 1 cent, 5 cents, 10 cents, 25 cents, 50 cents and Br. 1 coins; Br. 5, Br. 10, Br. 50, Br. 100, Br. 200 notes available)

Demographics

• Population: As per an estimate provided by CIA's World Fact Book 2022 estimate, total Population size is 113,656,596. The Central Statistics Agency's official website, however, gives a figure of 120,283,026. This is the same figure given by the World Bank for 2021. The last census was conducted in 2007. The population then was 73,918,505 (37,296,657 male, 36,621,848 female), Urban 16.1%, Rural, 83.9%. 
• Population growth: According to the 2007 census, the population grew at an average annual rate of 2.6 percent between 1994 and 2007.
• Life expectancy at birth: 65.645 years (based on UN data - 2022). On the other hand, the World Bank Group gives the life expectancy in Ethiopia as 65 years for the year 2020.
• The main ethnic groups (based on the 2007 census): Oromo 34.5 %, Amhara 26.9%, Somali 6.2%, Tigrie 6.1%, Sidama 4.0%, Guragie 2.5%, Welaita 2.3%, Hadiya 1.7%, Afar 1.7%,Gamo 1.5%
• Religion (2007 census):  Christian (Orthodox: 43.5%, Protestant: 18.6%, Catholic: 0.7%), Muslim: 33.9%, Traditional: 2.6%, Others: 0.6%

Economy

GDP - 2021

• USD 278.945 Billion (Purchasing Power Parity) - According to CIA World Fact Book
• USD 111.27 Billion (Nominal) - According to the World Bank

Sectors:

Estimated contribution of sectors to GDP in year the 2021 is put as follows:

Agriculture, forestry, and fishing, value added: 

• • 37.6% of GDP (based on data from the World Bank - 2021)

Service, value added:

• • 36.3% of GDP (based on data from the World Bank - 2021)

Industry (including construction), value added:

• • 21.9% of GDP (based on data from the World Bank - 2021)

Manufacturing, value added:

• • 5% of GDP (based on data from the World Bank - 2021)

Trade:

• Import of goods and services: USD 18.54 Billion in 2021 -  (based on data from the World Bank)
• Export of goods and services: USD 8.45 Billion in 2021 -  (based on data from the World Bank) - Note: even though the data does not mention it, the service must have included earnings from remittances. This is because annual earning the country's export of goods has never exceeded USD 4.5 Billion. 

Payment systems for Import /Export:

• Import: LC, CAD, TT (TT is allowed only for less than USD 5001 transactions)
• Export: LC, CAD, TT

Finance:

• Banks:

  The National Bank of Ethiopia is the central bank; there are 30 commercial banks and one development bank, and 45 microfinance institutions. 

• Insurance Companies:

  In the start of 2023, there are 18 insureres and one reinsurer operating in Ethiopia. 

Exchange Rate History: USD-ETB

Ethiopia’s currency is pegged to the US dollar. The National Bank, the country’s central bank follows a managed float exchange rate regime.

From 1973 to 1992, Ethiopia’s official exchange rate remained fixed at Birr 2.07 per U.S. dollar. In 1992, the Birr was devalued to 5 birr per U.S dollar, and in May, 1993 a Dutch-type weekly foreign exchange auction was inaugurated. Since October 2001, however, the exchange rate of the birr has been determined by the daily inter-bank foreign exchange market, in which the NBE intervened to regulate excess volatility in the movement of the exchange rate.

The following is a historical USD-ETB exchange rate since 14 December 2002 – 18 February 2023. It’s a highlight of the major changes. 

 (Source: National Bank of Ethiopia, Commercial Bank of Ethiopia) 

Tax

• Investors are given duty free previlages for the importing of capital goods necessary for the establishment or operation of the enterprise. Tax incentives are applicable in certain investment activities, such as manufacturing.

• Common Tax types and Customs duties: VAT: 15%, TOT (turnover tax): 10% on services, 2% on goods, Profit tax for incorporated businesses: 30%, profit tax for individual businesses: 10-35% (progressive), payroll tax: 10 - 35% (progressive), import duties: 5-35%, surtax on goods imported (conditions apply): 10%,

• Responsible Organ: Ministry of Revenues

Ranks

Doing Business Index (Doing Business 2020, A publication of The World Bank Group)

Ethiopia's ranking in Doing Business 2020: compared to global good practice economy as well as selected economies, Ethiopia is ranked 159th out of 190 economies.

Doing Business 2020 Ethiopia's rank in

• • Ease of Doing Business: 159

  • Starting a Business: 168

  • Dealing with Construction Permits: 142

  • Getting Electricity: 137

  • Registering Property: 142

  • Getting Credit: 176

  • Protecting Minority Investors: 189

  • Paying Taxes: 132

  • Trading Across Borders: 156

  • Enforcing Contracts: 67

  • Resolving Insolvency: 149

Communication

This section is currently under review and will be updated with the latest info.

• Telephone and Internet: The telephone and internet sector was monopolized by the state owned Ethio Telecom (formerly Ethiopian Telecommunication Corporation) till 2021. Safaricom Group has started opertaing in Ethiopia as of 2022. Ethio telecom's service numbers start with '09' while Safaricom's start with '07'.

• Ethio Telecom provides:

  • Fixed line service
  • Pre- and post-paid mobile service (Roaming, Internet, 4G LTE - 5G network has been announced, but not yet fully operational)
  • Mobile money - tele birr
  • e-SIM on phones that support the service
  • Mobile internet, Broadband
  • VSAT
  • VPN service
  • Broadband internet - 2Mbps to 50Mbps - for perosnal
  • Broadband internet - 2Mbps to 1024Mbps - for business
  • Web hosting and domain name service
  • Cloud Solution - Teledrive (data centre)

Ethio Telecom's Subscribers - 31 December 2022

Source: Ethio Telecom   

Ethiopia’s Energy output and potential, power plants under construction

Ethiopia is a country with huge potentials in energy production. The state run power utility, Ethiopian Electric Power Corporation, used to be a single entity that provides electricity. This entity was broken up into two in 2013: EEP (Ethiopian Electric Power), and EEU (Ethiopian Elctric Utilty).

• EEP (Ethiopian Electric Power) - was established to build power plants, power transmission and substation, and wholesale of electricity.
• EEU (Ethiopian Electric Utilty) - was established to construct, maintain and administer electric distribution netwros; to buy electric energy in bulk and sell electric energy to customers; and to initiate electric tariff amendments and to implement the new tariffs upon approval. 

The power system is dominated by hydropower where it accounts for 90.7 percent of the total power generation. The remaining is covered by thermal and geo thermal power generation.

In the year 2010/2011, the country produced 1.26 billion kWh. By the year 2011 the country was able to develop its electric power generation capacity to 2000 MW. This increased to nearly 5300 MW in 2022.

Current Output

According to the data found on EEP's website, currently running hydropower generating plants are:

• Tis Abay I Power Station - 12 MW
• Tis Abay II Power Station - 73 MW
• Koka Power Station - 43 MW
• Awash II Power Station - 32 MW
• Awash III Power Station - 32 MW
• Fincha Power Station - 134 MW
• Melka Wakena Power Station - 153 MW
• Sor Power Station - 5 MW
• Gilgel Gibe I Power Station - 184 MW
• Tekeze Power Station - 300 MW
• Gilgel Gibe II Power Station - 420 MW
• Beles Power Station - 460 MW
• Fincha Amerti Neshi Power Station - 95 MW
• Gilgel Gibe III - 1870 MW
• Abasamuel - 6.6 MW
• Genale Dawa - 254 MW
• GERD (Grand Ethiopian Reneissance Dam) - 750 MW

There is nearly 100 MW produced from diesel generators, 7.3 MW from geo thermal, 324 MW from wind, and 25 MW from biomass.

Projects Under Construction

In recent years government investment in energy has increased substantially in response to growing demand. The Gibe III hydro electric power project with a capacity of 1870 MW; Genale Dawa with a capacity of 254MW were all completed.The GERD has started generating some power too - 750MW. Ashegoda Wind Power Project with a capacity of 120 MW has started generating power. When completed, Aluto Langano Geothermal Electric Power project has a capacity to generate 70 MW.

Hydro power will continue to be the primary energy source in Ethiopia.  The Grand Renaissance Dam, which is being constructed on the Blue Nile River with estimated cost of 4.8 billion dollar, is expected to generate more than 5,000 MW after its completion. Accoding to government owned news outlets, the construction of the dam reached 83.3% as of August 2022. Other hydro electric power generating projects are:

• Chemoga Yeda hydro power plant has a capacity of 250 MW,
• Hallele Worabessa - 422 MW,
• Gebba - 371 MW.

Ethiopia's Energy Potential

The country has also vast potential for indigenous alternative energy resources. In a recent study by Ethiopian Electric Power Corporation, the country has the potential to generate 60,000 megawatts of renewable energy. This will allow the country to generate:

• 45,000 megawatts from hydroelectric power
• 10,000 megawatts from wind energy
• 5,000 megawatts of geothermal energy
• 7,455,232 Kwh from solar energy and
• 119 MW from biogas overall.

Address of EEU

Ethiopia Electric Utility
Piaza, Electric Building
Tel:  +251 11 1550811/12
ethiopianelectricutility.gov.et 

Address of EEP

Ethiopia Electric Power
Mexico Square
Tel:  +251 11 5570618
eep.com.et

Business Etiquette

• While you present yourself, you should be careful not to over-talk and you need to be attentive to what the person says.
• When you visit business offices, you will usually be offered coffee, tea or bottled water. Do not refuse the offer.
• While discussing, be careful not to hurt the feeling of your client especially by speaking negatively about the country. Focus on the positives - and there are plenty.
• You usually need to have appointments before being able to meet managers or executives. And be on time. On the other hand, if the person offers to come to your hotel, expect that they may not be on time. But they will arrive eventually - so wait for them. And this is the reason why you should put this into consideration while planning your visits and meetings - always have a buffer time in between two visits/meetings.
• If a client invites you for lunch or dinner, do not decline it unless you have another invitation. And if you do have another invitation, offer to make it the next day.
• You should expect business lunches or dinners to take longer time than you have planned. And people may not discuss business during lunch. But they will get to the point eventually.
• Your clients will be eager to take you to traditional restaurants where there will be live folk dances. Don't miss the experience. You will enjoy it.