Ethiopia’s economy is based on agriculture, but the government is pushing to diversify into manufacturing, textiles, and energy generation. Coffee is a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought. Although recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia’s agricultural resilience, changes in rainfall associated with worldwide weather patterns continue to create food insecurity for millions of Ethiopians.
The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture, and manufacturing. Under Ethiopia’s constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds.
While GDP growth has remained high, based on high saving and high investment, per capita income is among the lowest in the world. Ethiopia issued a second state-led Growth and Transformation Plan in mid-2015, which prioritizes industrial and urban development. Ethiopia has achieved high single-digit growth rates for the last decade through government-led infrastructure expansion and commercial agriculture development.
Ethiopia was designated as AGOA Eligible Country on October 2nd 2000. Ethiopia has been declared eligible for Apparel Provision on August 2nd 2001 and benefits the Lesser Developed Country Special Rule for Apparel (3rd country fabric) and Lesser Developed Country Rule for Certain Textile Articles (Category 0). Regarding the Category 9 Textile Products, Ethiopia is eligible to export Handloomed / Handmade as well as the folklore annex but not the ethnic printed fabrics.