About Ethiopia


Official Name


Federal Democratic Republic of Ethiopia (FDRE).


ethio flagFlag and Emblem

The Ethiopian flag comprises three colors set horizontally in equal dimension with Green at the top, Yellow in the middle, and Red at the bottom.

There is the national coat of arms is the center in blue circle with depiction:

a) Straight and equal lines of yellow come from all direction and join each other .
b) A star formed by the straight and equal lines.
c) Yellow rays radiating from the joints of the straight & equal

The national coat of arms on the flag reflects the desire of the nations , nationalities and peoples of Ethiopia ,as well as of its religious communities to live together in unity and equality.


Calendar, Time and Official working hours

Ethiopia uses the Julian calendar which divides the year into 12 months of 30 days each, with the remaining five (or six days in a leap year) constituting the short 13th month of Pagume. In Greek Pagume means “Additional”. The Ethiopian New Year commences on the 10th or 11th of September every year.

Ethiopia is in the GMT +3 time zone.

Business hours vary according to the nature of the business. Normally government offices and most other offices hours are 8:00 a.m. to 12:30 p.m. and 1:30 P.m. to 5:30 p.m. from Monday through Thursday. Working hours on Friday are 8:30Am to 11:30Am and 1:30pm to 5:30pm. Banks are open from 8:30 a.m. to 3 p.m. from Monday through Thursday. Working hours on Friday are 8:00 a.m. to 11:00 a.m. and 1:30 p.m. to 3: 00 p.m. and Saturday 8:30 to 11a.m.



Although Ethiopia lies within 15 degrees North of the Equator, owing to the moderating influence of high altitude, the country enjoys moderate temperatures and pleasant climate, with average temperature rarely exceeding 20oc (68oF). The sparsely populated lowlands typically have sub–tropical and tropical climates. At approximately 850mm (34inches), the average annual rainfall for the whole country is considered to be moderate by global standards. In most of the high lands, rainfall occurs in two distinct seasons: the “small rains” during February and March and the “big rains” from June to September.


Capital City

Addis Ababa.
The largest city and the seat of the Federal Government lies in the central plateau at an altitude of 2400 meters. Its average temperature is 16oC.

Addis Ababa was founded in 1887. It is a host to the African Union (AU) and the United Nations Economic Commission for Africa (ECA). Several other international organizations have their head quarters and branch offices in the Capital. Addis Ababa is also the center of commerce and industry.


Other Cities

Among Ethiopia’s other important centers of trade and industries are; Awassa, Dire Dawa, Gonder, Dessie, Nazareth, Jimma, Harrar, Bahir Dar, Mekele, Debre Markos and Nekemte. All these towns are connected to Addis Ababa by asphalt and gravel roads and most of them have good infrastructure facilities, such as first class hotels and airports.


Location and Boundary

Ethiopia is strategically located in the Horn of Africa, bordered by the Sudan on the west, Somalia and Djibouti on the East, Eritrea on the North and Kenya on the South. Its proximity to the Middle East and Europe, together with its easy access to the major ports of the region, enhances its international trade.



Ethiopia covers an area of 1.14 million square Kilometers (944,000 square miles)



Total: 77 million
Rular population: 84.87%
Urban population: 15.13%
Density: 59.4/Km2
Growth rate:
Total: 2.73
Urban: 2.57
Rural: 4.1


Entry Points by Air

Bole International Airport, Addis Ababa; other upgraded airports include those at Dire Dawa, Bahar Dar, Gondar, Lalibela, Axum, Arba Minch, and Makale.


Entry Points by Rail

Dewele on the Djibouti border. The rail way, with day and night trains, runs from Addis Ababa to Dijibouti via Nazaret, Awash Station, and Dire Dawa.


Entry Points by Road

Moyale (from Kenya), Humera And Metema (from Sudan), and Dewele (from Dijibouti) and Humera, Rama and Bure (from Eritera). All have full customs and immigration checks.



Ethiopia’s telecommunication facilities, which are relatively efficient by Sub-Sahara African standards, are showing marked improvement.

Direct microwave links connect all regional cities and a number of smaller towns have automatic telephone services. Excellent international communications links are maintained by means of two satellite earth stations, providing telephone, telex, fax, internet and television services, digital data network, pre-and post-paid mobile telephone and coin box international telecommunication services. Microwave links exist with Kenya, Djibouti and the Sudan. Moreover, digital telephone exchanges have been installed.

In recognition of the Government’s commitment to attract foreign direct investment, the Ethiopian Telecommunication Corporation (ETC) has taken a number of measures to foster an enabling investment climate. In its Eighth Development Program (2001-2005), it has plans to increase the telephone penetration rate from 0.3 % (3 to 1000 people) to a minimum of 1.0 % (1 to 100 people) and thus meet all pending demands of both the urban and rural population. The corporation is also planning to enhance its capacity in terms of capital, technology and management by creating a strategic partnership by means of transferring partial ownership of the public operator to an international company or a consortium.

The Ethiopian Postal Service and private courier agencies operate postal services, including sky-pack facilities, domestically and for international contacts.



The local currency is the Ethiopian Birr, made up of 100 cents. Notes are issued in denominations of 1,5,10,50, and 100 Birr. There are five different coins: 1,5,10,25, and 50 cents.


Currency Regulations

There is no limit to the amount of cash in foreign currency imported into Ethiopia, but it must be declared on arrival, using a currency declaration form. Foreign currency may be changed only at authorized banks and hotels .The currency declaration form will be required by Customs on departure. Visitors may change back any excess birr into foreign currency at the airport before departure; but, in addition to, the currency declaration form they must bring all receipts for exchange trasaction.



Drivers require a valid International Driving License, which can be obtained by exchanging your respective National license at the Transport and Communications office on Haile Gebre Sillasie Road in Addis Ababa. Visitors can recover their original driving licenses a day or so prior to departure. Those with their own vehicles will require a permit from the Ministry of Transport and Communication. Driving is on the right hand side.


The Economy

The Ethiopian economy is predominantly of agricultural nature and the production in such a sector constitutes a major part of the country’s economy, contributing about 45 % to the country’s gross domestic product (GDP) and about 62 % to total exports. It accounts for 85 % of total employment. Coffee, a major cash crop, is of high quality and contributes about 62 % of total agricultural exports. So, it is a major source of foreign currency earnings. Manufacturing, mining, trade, tourism, construction, services, etc., which make up the remaining 55 % of GDP, all supplement the agricultural sector. Industrial activities contribute only 11 % to GDP and 16 % to total exports.

Varieties of crops are grown in different parts of the country on a seasonal basis. The main crops are cereals (teff, barely, maize, wheat, sorghum, and millet), pulses (horse beans, vetch and lentils) and oil seeds (Niger seed, flax, rape seed, sesame, castor beans and Soya beans). The main cash and industrial crops are coffee, oil seeds, pulses, cotton, sisal, tobacco, fruits and sugar cane.

As aforementioned, 10.9 % of the GDP comes from the industrial sector that supplies important consumer goods to the domestic market. The major manufactured export products include clothing and apparel, canned and frozen meat, semi-processed hides and skins, sugar and molasses, footwear, tobacco, beverages, oil cakes and bees wax.

Although less than 3 % of the GDP currently comes from the mining sector, there are proven reserves of minerals such as gold, platinum, tantalum, nickel iron-ore, coal, marble, potash, copper, silica, limestone, diatomite, etc., as well as oil and natural gas. These all await exploitation and make the country a destination for business and investments from both foreign as well as domestic investors.


Economic Liberalization

Since 1992, the Government has successfully implemented a series of reform programs, in order to transform the economy from a command to a market economy, to speed up the integration of the economy into the world economy and encourage the wider participation of the private sector in developing the national economy. Such reforms include, among others, the following short-term economic stabilization and structural adjustment measures:

  • deregulation of domestic prices;
  • liberalization of foreign trade;
  • privatization of public enterprises;
  • abolition of all export taxes and subsidies;
  • devaluation of the exchange rate followed by the introduction of an inter-bank foreign currency market and the determination of exchange rates based on market forces;
  • enhancing private sector development and private-public partnerships through providing effective industry associations; and creating a forum for consultation between the private sector and the Government;
  • promulgation of a liberal investment law for the promotion and encouragement of private investment from both foreign and domestic sources;
  • issuance of a new labor law;
  • strengthening and enhancing institutional support for the export sector by strengthening/revitalizing existing institutions and establishing new institutions, such as :
    • the Ethiopian Livestock Marketing Authority;
    • the Ethiopian Leather and Leather Products Technology Institute, and
    • the Ethiopian Export Promotion Agency.

As a result, a great deal has been achieved since 1992 in moving away from a highly centralized economy to a more liberal market economy. Particularly, as a result of such a liberalization, the economy has shown a marked growth improvement, growing at average rate of 15% annualy for the past four years consecutively. The rate of inflation declined from around 20 % in 1992 to an annual average rate of below 4 % for the last ten years. The country’s foreign exchange has improved, the budget deficit has declined to acceptable levels, and above all private investment activities have flourished.


Education and Health

Ethiopia’s education system produces well-trained skilled and semi-skilled technical and business personnel. The country’s universities, colleges and technical institutions turn out professionals, semi-professionals and a technically skilled workforce necessary for the business sector. Thousands of primary and secondary schools lay the foundation for human resources development.

The Ministry of Education has taken concrete steps to increase the intake capacity of higher institutions at both graduate and post-graduate levels. Private universities and colleges are also flourishing in Addis Ababa and in the regional cities. The graduates of these colleges and universities are believed to meet the demands of skilled manpower in the economy. The New Education and Training Policy also aims at providing skilled and productive workforce that contributes to the country’s economic development. To this effect, the Government has given high priority for technical and vocational education and training (TVET) program, and now there are 151 TVET schools in the country that are run by the Ministry of Education, Ministry of Agriculture and non-governmental organizations (2001/02).

Currently, there are various foreign community schools offering kindergarten, elementary, junior high school, and secondary education at international standards; among these are English, French, German, Italian, Greek and Indian community schools.

Most urban centers have a reasonable number of hospitals, health centers and clinics as Regional Governments have increased their budgets substantially.


Financial Services

Efficient banking and other financial services are available in Ethiopia. While the National Bank of Ethiopia (NBE) serves as the Central Bank, commercial banking functions are performed by the Commercial Bank of Ethiopia (CBE) and by a number of private commercial banks. The CBE and private commercial banks offer savings and check accounts, extended short-term loans, deal with foreign exchange transactions, provide mail and cable money transfer services, participate in equity investments, provide guarantee services and perform all other commercial banking activities.

The two specialized banks are the Development Bank of Ethiopia (DBE) and the Construction and Business Bank (CBB). The DBE extends short-, medium- and long-term loans for viable development projects, including industrial and agricultural projects. It also provides other banking services, such as check and savings accounts to its clients. It has 32 branches in different parts of the country. CBB provides long-term loans for the construction of plants, which produce housing construction materials, such as concrete blocks, roofing materials and other related products, for construction of private schools, hotels, clinics, hospitals, for acquisition or maintenance of dwellings, and for real estate development. Other than its specialized services, CBB offers all other commercial banking services to businesses.

In conformity with the relevant laws of the country, foreign enterprises (companies formally registered/ established and operating in Ethiopia) are entitled to access domestic credit borrowing on the same terms and conditions applicable to Ethiopian companies.

The Ethiopian Insurance Corporation (EIC) was the only insurance company that offered all classes of insurance services some years ago. But to up-to-date a number of private insurance companies, which can offer all these services, have joined the business. Consequently, a competitive business environment has been created in the sector.



The provision of good quality infrastructure services is the key to an efficient operation of the private sector and the integration into the global market as well as for attracting foreign direct investment. Therefore, the Government has been and is still engaged in comprehensive infrastructure development programs in roads, telecommunications, energy and others.


Power Supply

Ethiopia has vast hydropower and promising geothermal energy resources. Its hydropower potential is estimated at being around 15,000-30,000 MW. The topographic features of the country allow at least 20 – 25 % of this potential to be utilized economically.

Up-to-date the aggregated electricity generation is a mere two billion kwh/a, which is much less than 2% of the actual potential. The present regional distribution system of electric services is carried out mainly via the Inter-Connected System (ICS) and via a self-contained system to a certain degree. The main industrial towns are all connected into the national grid. Almost the entire ICS capability is provided by the seven hydroelectric power plants at Finchaa, Koka, Awash II, Awash III, Melka Wakena, Tis Abay I and Tis Abay II. An eighth and a ninth hydropower plant, at Gilgel Gibe and Tekeze with installed capacities of 180 MW and 312 MW respectively are scheduled to become operational in the year 2003 and 2007 respectively. Electric energy is supplied at 380/220 volts and 50 Hz AC at low level; the high voltage transmission facilities are 230KV, 132KV, 66KV and 45 KV, while the medium voltage distribution is in 33KV and 15KV.

Electricity in Ethiopia, generated mostly from hydropower, is relatively cheap. It is supplied by the Ethiopian Electric Power Corporation (EEPCO).

The Government has liberalized the sector allowing foreign investors to participate in generating electric power by setting up hydroelectric power plants. The only restriction is, however, on the transmission and distribution of electrical energy through the Integrated National Grid System, which is exclusively reserved for the Government. Therefore, foreign investors can generate the bulk of hydropower and finalize a power-purchase agreement with the Ethiopian Electric Power Corporation (EEPCO) for transmission and distribution.



The Federal Democratic Republic of Ethiopia (FDRE) was established under a new Constitution as of 21st of August 1995. The Constitution provides for a Federal State system, which is structurally based on the Federal Government, nine autonomous States and two chartered cities (Addis Ababa and Dire Dawa). The States and chartered cities are vested with powers of self-administration. They also have legislative, executive and judicial powers, regarding all matters that fall under their respective jurisdictions, except for those exclusively given by the Constitution to the Federal Government, such as National Defense, Foreign Affairs, macroeconomic policy and the printing of currency.

The country has a parliamentarian form of government with a bicameral parliament, which is comprised of the House of Peoples’ Representatives and the House of the Federation. The House of Peoples’ Representatives is the highest authority of the Federal Government and its members are elected by the people for a term of five years on the bases of direct universal suffrage. The House of the Federation is composed of representatives of Nations, Nationalities and Peoples elected by the State Councils for a five-year term.

The Head of the Sate is the President who is elected by a joint session of the House of Peoples’ Representatives and the House of the Federation for a six-year term. The executive power is vested in the Prime Minister and the Council of Ministers. The Prime Minister is elected from among and by members of the House of Peoples’ Representatives and accountable to the same. The Prime Minister is the Chief Executive of the Federal Government, the Chairman of the Council of Ministers, and the Commander-in-Chief of the National armed forces. He forms the Council of Ministers after the approval of the nominees he submitted to the House of Peoples’ Representatives.