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The Economy of Ethiopia

The Zenawi policy of favoring the Tigrean ethnic group has witnessed an ever widening gulf between the various ethnic communities of Ethiopia with resentment burning within the side-lined.

Blind man in the street of Addis Ababa

Blind man in the street of Addis Ababa

The prolonged war with Eritrea, constant uprisings against the government, the internal struggles and upheavals and the unilateral policy of the government has had a crippling effect on the economy of the country with it being one of the poorest countries of the world and one of the largest debtors. Poverty in urban as well as rural areas strangles the growth of economy.

Woman in Harar carrying plastic cans

Woman in Harar carrying plastic cans

Though the country has recorded notable growth in the past few years, the GDP per capita still remains one of the lowest in the world. In spite of having the biggest water reserves in Africa, Ethiopia has been unable to use its water resources to its full potential.

Market day in Jinka in southern Ethiopia

The country is ravaged by droughts every two years, which has drastically debilitated agriculture despite it being the largest service provider and foreign currency earner. Coffee is its largest export. But, when compared to her neighbors, Ethiopia’s export is very less. Though blessed with large mineral resources, the political unrest in these regions has hampered growth in this sector.

Arba Minch, Ethiopia

People bathing and doing their laundry in a small river near Arba Minch

The two year war with Eritrea in the late 1990s and the concentration of the fast dwindling finances in strengthening the defense further worsened the economy. Once an effective means of harnessing its abundant water resources is done to tackle the drought, the economy can probably prosper.

camel, babile

Camel traders in Babile discussing the price

Though with a current economic growth of 7-8% per year – one of the highest in all of Africa, gives promise of a brighter future and the Ethiopians are happily taking use of the new opportunities.

Transportation in Africa on dusty roads

Newly constructed tarmac roads even to the Omo valley opens up new territory for everybody to explore with all its benefits and potential risks for the unique tribal traditions to delapidate

Shops shoot up almost everywhere in the urban areas and clothing stores with trendy styles of famous brands made in China and Thailand offers a wide variety of clothes and styles. Also computer stores and cyber café’s are common nowadays in bigger towns.

A colorful but small and simple kiosk by the roadside reflects the challenges in Ethiopian economy


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