Geography of Ethiopia

and the Horn

Addis Ababa University
AAiT

Chapter Eight
Economic Activities in Ethiopia
 Introduction
Economic activities are an activities that human beings involved in order to satisfy their diverse
material and spiritual needs.
Economic activities are highly diversified in their nature and characters.
Example:
- Some are simple while others are complex
- Some are primitive where as others are advanced
Geographers classify a nation’s economy into:
i. Primary Economic Activities,
ii. Secondary Economic Activities,
iii. Tertiary Economic Activities
iv Quaternary Sector
v. Quinary Sector
This categorization is seen as a continuum of distance from the natural environment.
 Classification of Economy in one country
Primary sector secondary sector tertiary sector
- agriculture (both manufacturing activities - retail and wholesale
subsistence and construction sales,
commercial), - transportation and
- mining, distribution,
- forestry, - entertainment,
- farming, - restaurants,
- grazing, - clerical/secterial
- hunting and services,
gathering, - media,
- fishing and - tourism,
- quarrying. - insurance,
- banking,
- healthcare, and
- law.
 Mining Activity in Ethiopia
Mining involves the search for minerals from the crust of the earth.
Mining is important to the economy of Ethiopia, currently, mining contributes to
only 1.5 % of GDP (USD 32 billion).
Mineral occurrences are associated with the geologic process.
The oldest (Precambrian) rocks and the sedimentary
(Mesozoic) rocks host most of the economic metallic
and nonmetallic mineral deposits in Ethiopia.
The developed large scale gold mine in
Ethiopia is the Lege-dembi gold mine.
There is also small-scale open pit mine of columbo-tantalite at Kenticha in the
Adola belt.
Soda ash is being mined at Lake Abiyata in the Rift Valley.
 Cont’d…

• Kaolin, quartz and feldspar are also being mined from the Adola belt in
southern Ethiopia. The consumers of the products are the Awash-Melkasa
Aluminium Sulphate and Sulfuric Acid Factory and the Tabor Ceramics
Factory.
• Silica sand is also being mined and utilized by local industries.
• The cement factories of the country are using high quality limestone, clay,
gypsum and pumice as a raw material for cement production.
• There is also large input of construction minerals such as sand, gravel, scoria,
crushed stones, aggregates, pumice, scoria, etc to the construction industry
(including buildings, roads, dams, bridges etc.).
• The gas fields are located in the south-eastern part of the country at Calub,
Hilala and Genale gas fields in the Ogaden Basin.
• The Midrock Gold is in operation at Shakisso town in southern Ethiopia.
• Potash has been working in the Dallol depression
 The Importance of Mining Sector in Ethiopia
• Economic benefits:-
- Generates revenue from sales, taxes, royalty of mineral resources
- Generates foreign currency earnings by exporting minerals Employment opportunity
• The contribution of the mining sector to the national economy has been a maximum of
6%.
• Social Benefits:-
- Expansion of infrastructures
- Expansion of social services
-Train local communities to engage in other form of business
-Promote small entrepreneur’s engagement
The common environmental issues in Ethiopia to be considered in development of the
medium to large scale mining projects are; the surface and ground water system, the
physical land management (soil, rock stability), deforestation grass land, farm land, etc),
spillage of strange chemicals/metals, air, noise, dust, aesthetic values of the area, cultural
and tourist heritages, the communities as well as all other lives surround the mine
proximity.
 Forestry
• Forestry is related to exploiting forest products, which include:
- gathering of fuel wood,
- production of timber and
- charcoal, and
- construction of houses.
- Economic significance of forest:
• The contribution to the national economy in the form of GDP is about 2.5%.
• Most of the trees cut in Ethiopia today are used for domestic purposes like for:
- Fuel wood, Timber household furniture,For building and construction.
The commercial exploitation of forest resources in Ethiopia is still in its infancy
stage. This is mainly because; Rapid deforestation, Low demand for timer ,
Lack of modern lumbering technology , Inaccessibility of natural forest.
 Fishery
• Fishing is a primary economic activity that involves harvesting of fish
resources from water bodies.
• Due to the presence of a number of lakes, river and reservoirs rich in
fish resources, Ethiopia has great potential for fishing.
• The massive/bulk of fish production is made of :
-Tilapia,
- Bargus,
- Clarias and
- Labeo species.
• In the two southern Rift Valley lakes, Chamo and Abaya, Nile Perch is
caught in significant quantity.
• Nile perch is also found in major riverine fisheries.
 Cont’d…
Table: Estimated Fish Resource Potential of Ethiopian Lakes
 Fishing Grounds in Ethiopia
• Most fishing activities in Ethiopia take place in fresh waters, such as rivers, lakes and
ponds.
• Ethiopia’s fresh water bodies are known to have 101 species of fish, among which four are
endemic to the country.
• The Ethiopian fishing grounds could be classified as:
1 Lakes and
2. Rivers.
1. Lakes fishery:
- The Ethiopian lakes are estimated to cover a surface area of about 7000 km 2.
- They account about 79 percent of the total yearly fish production of the country.
- The most important lakes where much of the fish production comes include:
.Lakes Tana,
.Lakes Ziway,
.Lakes Langano,
.Lakes Hawassa,
.Lakes Abaya and
 Cont’d…

• Among the 101 species of fish available in the country 25 of them are commercial
fish species and are found in the lakes.
2. River Fishery:
- Most rivers of Ethiopia have high fish resources.
- Most fish production of the river is confined to local consumption
by villagers living near and around river banks.
- The fishing potential of Ethiopian rivers has not yet been fully
known.
- River Baro alone can supply a maximum sustainable yield
• According to FishStat data:
- Tilapine species averaged about 50 percent,
- Catfish about 22 percent and
- Nile Perch about 9 percent of total production over the last
decade.
 Agriculture in Ethiopia
• Agriculture is defined as the purposeful tending of animals and plants.
• The type of agriculture practiced in any area is influenced by:
i. Physical factors and
ii. Socio-economic factors.
i. The environmental factors:
- soil,
- climate,
- relief, etc. impose certain limitations on the types of crops that
may be cultivated and the type of livestock that may be reared.
ii. various socio-economic factors:
- farm size,
- type of land tenure,
- capital availability,
- transport and marketing facilities,
- price,
- government polices, etc. influence farming patterns.
 Contributions, potentials and characteristics of
agriculture in Ethiopia
• The contributions of agriculture in Ethiopia: Agriculture is the backbone of the
economy of the country as the following facts indicate:
- GDP: Agriculture accounts for most of (30- 42%) of the Gross Domestic Product
(GDP) of the country.
- Foreign Exchange Earnings: Agricultural products account for more than 90
percent of the foreign exchange earnings of the country.
- Source of Input: Agriculture provides raw materials for the processing industries
- Employment/Livelihood: More than 80 percent of the Ethiopian population
derives its livelihood directly from agriculture.
Ethiopia has abundant agricultural resource base due to:
 its varied agro-ecological zones
 the presence of around 21soil types with varying physical and chemical features.

 Agricultural Land Use In Ethiopia
Land resource is more crucial to the livelihood of the people depending on
agriculture.
 Cropping Seasons In Ethiopia
• The two main crop seasons in Ethiopia are:
i. The Belg seasons which receive rainfall from February to June
- The Belg crop season is officially defined as any crop harvested
between March and August
- the Belg harvest provides the remaining 5-10 percent of the
nation’s total cereal output.
ii. The Meher seasons which receive rainfall from June to October
- The Meher crop season is defined as any crop harvested
between September and February.
- The Meher crop season is the main season and produces 90-95
percent of the nation’s total cereals output.
Cropping pattern in Ethiopia
• The highlands produce a variety of crops and also practice an highly structured system of land
preparation and crop rotation.
• The number of crops grown decreases as one moves from the central highlands to the peripheral
lowlands.
• The highlands are more diversified than the lowlands.
 Animal Husbandry
• Ethiopia has a large livestock population (1st in Africa and 10th in the world).
• The distribution of livestock production in terms of agro-ecological zones and
administrative regions is very uneven.
• About 75% of the cattle and sheep population are found in the highland zone
while 70 percent of the goat and 100% of the camel population are found in
the lowlands.
• More than 90% of the livestock population is found in Oromia, Amhara and
SNNPR.
• Livestock contribute 30-35% to agricultural GDP and 13-16% to overall GDP.
• The contribution of hides and skins from the livestock exports is the highest.
• The contribution of the livestock sector to the national economy is limited due
to:
- primitive methods of livestock breading,
- cultural attitudes,
- higher mortality rates of livestock due to disease and other causes.
 Characteristics of Ethiopian Agriculture
• Agriculture in Ethiopia also possess some basic and general
characteristics. These basic attributes are:
1. Subsistence Orientation:
2. Fragmentation of farm plots and Small size of Holdings:
3. Low Use of Inputs:
4. Susceptibility to Disasters:
5. Limited practice of irrigation and dependence on rainfed agriculture
 Agriculture Systems in Ethiopia
• An agricultural system is a practice and a way of life carried by rural
people who are confined to relatively:
- similar agro-physical resource basis and
- share more related socio-cultural, economic and livelihood
structures and patterns
• The agricultural systems of Ethiopia can be classified based on:
- The Agro-ecological patterns to which the practices have been
confined.
- Dominant types of crops or animals reared or combinations.
- Farming methods and tools used for cultivation, which are a
reflection of topographic and climatic influence.
- Level of technological input and the disposal/removal of output.
 Cont’d…
• Based on the
- dominant corps cultivated or animals reared and
- the main implements used in cultivation, the following major
farming systems are identified:
1. Highland mixed farming system
2. Lowland mixed farming system
3. Pastoral system
4. Shifting cultivation
5. Commercial agriculture
 Major Problem of Ethiopian Agriculture
• The Ethiopian agriculture has been characterized by low production
and productivity.
• Despite the existence of a huge agricultural population, the sector
failed to satisfy the food needs of the growing population.
• The major obstacles to the development of this sector include:
1. Land degradation
2. Variable rainfall
3. Land fragmentation
4. Land tenure insecurity
5. Backward technology:
6. Poor rural infrastructure
 Manufacturing Industry in Ethiopia
• Industrial development in Ethiopia is extremely backward.
• The contribution of the industrial sector to the Gross
Domestic Product (GDP) over recent periods is only 11.7
percent.
• Manufacturing is a process of changing commodities to
consumable forms.
The value of industrial production:
• The largest value addition came from the food and beverage
subsector followed by non-metallic mineral subsector, metal
and engineering subsector while the smallest contribution
came from textile and cloth/apparel industry
• The Ethiopian large and medium size manufacturing sector is
dominated by food and beverages.
 Types and Characteristics of Manufacturing
• It is possible to identify two types of industries in Ethiopia. These are:
i. the traditional or cottage industries and
ii. the modern manufacturing industries
i. The Cottage (traditional)industries:
A peculiar feature of the cottage industries in Ethiopia is that:
•they remain static - they existed with little changes and
modification throughout their long period of existence.
• Heavy industries that manufacture capital goods are very small.
• The existing industrial establishments in Ethiopia are
- few in number
- most of them lack capital
- most of them have low production
- most of them lack job creation capacity.
- most of them rely on agriculture raw material for production.
 Cont’d…

Table: Gross Domestic Product by Sector

 Cont’d…

Table: Geographical distribution of Manufacturing enterprises

 Industrial Parks (IPs) in Ethiopia
• The development and construction of industrial parks started in 2014
• Three mechanisms are in place for the establishment of IPs:
a. fully developed by the federal or regional government;
b. developed by PPPs with the IPDC (IP Development Corporation) and
c. by private developers only.
• Industrial parks in Ethiopia can also be categorized based on their
focus sector;
- Textile and garment;
- Leather and shoes
- Agro-processing,
- Pharmaceutical and
- IT park.
 Contributions of Industrial Parks in Ethiopia
• Stimulating investment and creating employment
• Facilitating export growth and foreign exchange earnings
• Developing industrial clusters through forward/backward linkages
• obtaining knowledge transfer and technology spill over
• Establishing connections to global value chain
• Fostering Sustainable Growth and social equality
• Enforcing implementation of national industrialization strategy
 Challenges and Opportunities of
The Manufacturing Sector in Ethiopia
 The Service Sector In Ethiopia
• Tertiary economic activity involves the distribution and provision of
goods and rendering services.
• Tertiary institutions include:
- wholesale and retail outlets,
- banking and other financial services,
- educational services,
- health/medical facilities, and
- Security services,
- transportation,
- information and telecommunication services,
- tourism,
- research centers and other business & service functions upon which
we depend daily.
 Transportation
• It is the movement of people and goods from one place to other using different
modes/means
• It is the lifeline or the blood vessel of an economy
• The role of transportation in socio-economic development is that it allows for:
- division of labor and labor specialization,
- procurement of raw materials from various sources,
- dispatch of goods to market places and
- personal mobility etc.
Types of Transportation
1. Traditional Transport
2. Road Transport
3. Railway
4. Waterways
5. Air Way
 Communications
• Communication is the process of conveying messages to others
• An effective communication system plays a vital role to:
- accelerate the pace of development,
- enhance closer social integration, and
- to promote the basic aim of economic activities.
• Some of the communication services that are commonly used in Ethiopia
include:
- radio,
- television,
- internet,
- satellite,
- print publications,
- fixed and mobile telephones, and
- post offices.
 The Contribution of Transportation and
Communication to Socio-Economic Development
• Transportation plays important economic, social and political roles like:
- It creates job opportunity
- It promotes investment sector - on infrastructure development
- Transportation plays a big role for both national and international trade
- It serves as a source of income generation for gov’t and business investor
- linking rural areas and rural products to urban centers
• Negative side of transport sector:
- Environmental pollution,
- Road traffic accident (social, economic psychological trauma on victims)
- Source of anxiety due to congestion
 Trade in Ethiopia
• Trade is a process of exchange of products involving change in ownership of
commodities.
• A country carries out two types of trade. These are:
i. Internal trade: This refers to the exchange of goods and services
within the country.
ii. External Trade:
- It is called foreign trade or international trade
- It is concerned with import-export trade.
- refers to the exchange conducted between countries.
• As to the of report NBE in 2018, in terms of export earnings =Ethiopia exports:
1st. Coffee (29.5%)
2nd. Oilseeds (14.9 %)
3rd. Pulses (9.5 % ) and
th
 The Geographic Structure of Exports
• The major export destinations for Ethiopian goods or i .e. Ethiopia’s
export earnings originated from:
- Asia ( 39.8 %)
- Europe (28.7%)
- Africa (20.9 %)
 Tourism in Ethiopia: Types of Tourism
• Ethiopia is endowed with:
- unique landscape tourism attractions,
- paleontological tourism attractions,
- archaeological tourism attractions,
- historical tourism attractions and
- living cultural tourism attractions.
Major Tourist attraction sites of Ethiopia:
A. Historic Attraction sites: B. Natural Attraction sites:
- The Obelisk of Axum The Blue Nile Falls
- The Churches of Lalibela Simien Mountains
- The Castles of Gondar The Rift Valley Lakes
- The Walls of Harar The National Parks
 The Role of Tourism in the Economy of Ethiopia
• Tourism seems to be the third source of export revenue after
agriculture and industry.
• It contributed to the country’s GDP about 2.7% in 2017.
• the industry is now an important source of employment accounting
for 2.4% of total employment in 2017
Challenges of the sector to be addressed
• Weak institutional framework and implementation capacity,
• Lack of skilled man power
• Poor standard
• Lack of basic and IT infrastructure
• Weak private sector associations
• Poor visitor management in natural and heritage sites
• Poor tourism statistics