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Sub Saharan Africa
Ethiopia |
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Country information
TRADE AND INVESTMENT
The UK is the third largest investor in Ethiopia behind Saudi Arabia and France and the fourth largest exporter, behind Japan, Germany and Saudi Arabia. UK exports to Ethiopia in 2005 totalled £32 million, primarily in industrial and power generation equipment. Ethiopian exports to the UK totalled £18.45 million in 2004, mainly in leathers, hides and furs.
UK Trade & Investment Country Profile: Ethiopia
Development
Ethiopia is desperately poor. It contains one of the largest concentrations of poor people on the planet. Ethiopia ranks 170 out of 177 countries in the 2006 United Nations Human Development Report. 31 million people live on less than half a dollar a day and between 6 and 13 million people are at risk of starvation each year. Poverty in Ethiopia affects the majority of the population: 81% of the 71.3 million people live below a poverty line of $2 a day.
Livelihoods are predominantly based on agriculture, which accounts for 85% of employment, 45% of national income and over 90% of export earnings. Life expectancy is 48 years (UNICEF, 2004), under-5 mortality is 123 per 1,000 live births, and an estimated 1.4% of the adult population are living with HIV/AIDS (Demographic and Health Survey 2005). Food security is a major challenge. 15 million people are at risk from food insecurity, and over 8 million people are classed as chronically food insecure.
The commitment made by the Government of Ethiopia towards reducing poverty is starting to have results, but despite these signs of progress, Ethiopia remains unlikely to meet any of the MDG targets by 2015. If it is to have any chance of doing so, there will have to be a major improvement in economic growth and a massive increase in assistance from donors.
In January 2003 the UK signed a 10-year Memorandum of Understanding with Ethiopia which set out our mutual commitments in support of the government's poverty reduction programmes. A new DFID Country Assistance Plan for Ethiopia, which is designed to support the Government’s own poverty reduction strategy, is being prepared. Although DFID stopped providing general budget support in 2005, a new mechanism for providing assistance, called the Protection of Basic Services grant, has been introduced in collaboration with the World Bank and other donors. This will ensure that poor people continue to have access to the basic services they need (specifically, education, health, agriculture and water and sanitation services) and will also be a means of holding to account local officials responsible for delivering those services. DFID will contribute a total of £109 million by the end of June 2007.
DFID is also providing £70 million over 3 years (2005-2007) for the Productive Safety Net Programme, which aims to meet the needs of the chronically food insecure population, in addition to £11 million in 2005/6 for humanitarian relief. Total levels of UK development assistance in Ethiopia are rising significantly, from £60 million in 2004/5 to a planned £130 million in 2007/8. Provided the overall environment remains favourable, Ethiopia is expected to become the largest recipient of UK development assistance in Africa.
DFID Country Profile: Ethiopia
