Ethiopia Industry Sectors

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Ethiopia industry sectors suffer from lack of infrastructure and government support. The country had strict laws against private investment in all major sectors, which led to an underdeveloped industrial sector. Agriculture is the primary source of employment for the Ethiopian economy. It contributes almost 43.2% to the national production and provides employment to more than 80% of the working population.

Major Ethiopia Industry Sectors

The country faces political instability which results in unfavorable business environment. Coffee production is the primary source of foreign exchange for Ethiopia. It accounts for almost 10% of the national production. A majority of the farming is done with archaic methods. Also, the country suffers from lack of irrigational resources. As a result, recurring drought after 2002 has depleted annual coffee production significantly.

 

Major industrial sectors in Ethiopia are:

 

  • Mining: Unlike other African countries, Ethiopia is not endowed with rich mineral resources. The mineral sector contributes less than 1% to the national production figures. The Ethiopian Mineral Resources Development Corporation (EMRDC) governs and manages mineral sector in the country. Gold is the main mineral export item for the country. 

  • Energy: Ethiopia produces electricity through hydro-electric power generation system. Since 2005, a large portion of the foreign aid is invested in the development of energy sector. It is expected that in near future, the country would be able to export power to neighboring countries such as Eritrea and Somalia. 

  • Leather: Leather industry is a major source of foreign exchange for the country. Earlier, the country used to export raw leather. However, with private investment flowing into the sector, the country is also exporting luxury leather products. 

  • Manufacturing: Ethiopia has a very underdeveloped manufacturing sector. Mostly, it consists of small to medium scale industries which rely on agriculture productivity. Majority of the consumer goods are imported from EU, China and US. 

  • Floriculture: Government has also invested in the development of floriculture in Ethiopia. With the present growth rate, it is expected that Ethiopia will become one of the largest flower and plants exporter in the world.

 

Ethiopia has been able to achieve growth rate in excess of 10% since 2005. However, the surplus growth is largely a result of foreign aid. The biggest challenge for the country is to develop diverse industrial sectors to sustain economic growth.