Eastern Africa 

Capital City:
Addis Ababa

Total: 1,104,300 sq km
Land: 1 million sq km
Water: 104,300 sq km
Land boundaries:
Total: 5,925 km

border countries (6): 

Djibouti 342 km
Eritrea 1,033 km
Kenya 867 km
Somalia 1,640 km
South Sudan 1,299 km
Sudan 744 km

Coastline: 0 km(landlocked)



The predominant climate type is tropical monsoon
Dry season from October to Februarys
Heavy rainy season from June to September
High plateau with central mountain range divided by Great Rift Valley
Mean elevation: 1,330 m
Lowest point: Danakil Depression -125 m
Highest point: Ras Dejen mountain 4,550 m
Natural resources:
Gold, platinum, copper, potash, lignite, opal, oil shale, laterite iron ore, halite
natural gas, hydropower,limestone, sandstone, gypsum, clay,diatomite,
Niobium, tantalum, nickel, chrome, manganese, bentonite, clay, and perlite.
Land use:
Agricultural land: 36.3%
   arable land 15.2%; permanent crops 1.1%; permanent pasture 20%
Forest: 12.2%
Other: 51.5% (2011 est.)
Irrigated land:
28,000 sq km (2017)
Population – distribution:
highest density is found in the highlands of the north and middle areas of the country, particularly around the centrally located capital city of Addis Ababa; the far east and southeast are sparsely populated
Natural hazards:
Geologically active Great Rift Valley susceptible to earthquakes
Volcanic eruptions
Frequent droughts 
Cross boundary rivers:
Flowing into the Mediterranean
    Blue Nile, Mareb River, Tekezé River, Angereb River, Yabus River,
    Daga River, Baro River, Pibor River, Yabus River, Gebba River , and Shinfa River. 
Flowing into the Indian Ocean:
    Shebelle River, Ganale Dorya River, Dawa River.
Flowing into endorheic Awash River:
    Mille River, Borkana River, Ataye River, Hawadi River, Kabenna River,
    Germama River (or Kasam River), Durkham River, Keleta River, Mojo River,
    Akaki River.
    Lake Abaya, Lake Abbe, Lake Abijatta,Lake Gummare, Lake Hayq, Lake Ashenge, Lake Karum
    Lake Langano, Lake Shala, Lake Tana, Zengena Lake, Lake Zway, Lake Bario, Lake Basaka
    Lake Chamo, Lake Chew Bahir, Lake Afambo, Lake Afrera, Lake Ardibbo, Lake Awasa.




People and Society 

Ethiopia is a predominantly agricultural country and more than 80% of the population lives in rural areas, that is in the early stages of demographic transition. Infant, child, and maternal mortality have fallen sharply over the past decade, but the total fertility rate has declined more slowly and the population continues to grow. The rising age of marriage and the increasing proportion of women remaining single have contributed to fertility reduction. While the use of modern contraceptive methods among married women has increased significantly from 6 percent in 2000 to 27 percent in 2012, the overall rate is still quite low.

The distribution of Ethiopia’s population generally is related to altitude, climate, and soil. These physical factors explain the concentration of population in the highlands, which are endowed with moderate temperatures, rich soil, and adequate rainfall. About 14 percent of the population lives in areas above 2,400 meters (cool climatic zone), about 75 percent between 1,500 and 2,400 meters (temperate zone), and only 1 1 percent below 1 ,500 meters (hot climatic zone), although the hot zone encompasses more than half of Ethiopia’s territory. Localities with elevations above 3,000 meters and below 1,500 meters are sparsely populated, the first because of cold temperatures and rugged terrain, which limit agricultural activity, and the second because of high temperatures and low rainfall, except in the west and southwest.

Although census data indicated that overall density was about ninety-five people per square kilometer, density varied from over 250 per square kilometer for Addis Ababa and 150 for Arsi to fewer than 20 in the Ogaden. 

A simple ethnic classification of Ethiopia’s population is not feasible. People categorized on the basis of one criterion, such as language, may be divided on the basis of another. Moreover, ethnicity—a people’s insistence that it is distinctive and its behavior on the basis of that, insistence—is a subjective response to both historical experience and current situations. A group thus distinguished may not be the same as that established on the basis of objective criteria.

The country’s population is highly diverse, containing over 80 different ethnic groups. According to the Ethiopian national census of 2007, the Oromo are the largest ethnic group in Ethiopia, at 34.4% of the nation’s population. The Amhara represent 27.0% of the country’s inhabitants, while Somalis and Tigrayans represent 6.22% and 6.08% of the population, respectively. Other prominent ethnic groups includes Sidama 4.00%, Gurage 2.52%, Welayta 2.27%, Afar 1.73%, Hadiya 1.72%, Gamo 1.49% and others 12.6%.

Ethnic groups:
Oromo 34.4%, Amhara 27%, Somali 6.2%, Tigray6.1%, Sidama 4%, Gurage 2.5%, Welaita 2.3%, Hadiya 1.7%, Afar (Affar) 1.7%, Gamo 1.5%, Gedeo 1.3%, Silte 1.3%, Kefficho 1.2%, other 8.8%.
Amharic (official national language), Oromifa, Somali , Tigrigna, Sidamo, Wolaytta , Gurage, Afar, Hadiyya, Gamo, Gedeo, Opuuo, Kafa, English, Arabic 
Ethiopian Orthodox 43.5%, Muslim 33.9%, Protestant 18.5%, traditional 2.7%, Catholic 0.7%, other 0.6% 


Ethnicity, Language, and Religion

At present, at least eighty languages are spoken as mother tongues, a few by many millions, others by only a few hundred peoples. The number of distinct social units exceeds the number of languages because separate communities sometimes speak the same language. More than fifty of these languages—and certainly those spoken by the vast majority of Ethiopia’s people are grouped within three families of the Afro-Asiatic super-language family: Semitic (represented by the branch called Ethio-Semitic and by Arabic), Cushitic, and Omotic. In addition, about 2 percent of the population speak the languages of four families—East Sudanic, Koman, Berta, and Kunema—of the Nilo-Saharan super-language family.

Most speakers of Ethio-Semitic languages live in the highlands of the center and north. Speakers of East Cushitic languages are found in the highlands and lowlands of the center and south, and other Cushitic speakers live in the center and north; Omotic speakers live in the south; and Nilo-Saharan speakers live in the southwest and west along the border with Sudan. Of the four main ethno-linguistic groups of Ethiopia, the Amhara, Oromo, and Tigray, generally live in the highlands; the fourth, the Somali live in the lowlands to the southeast.

Christianity was introduced to Ethiopia in the 4th century, and the Ethiopian Orthodox Church (called Tewahdo in Ethiopia) is one of the oldest organized Christian bodies in the world. The church has long enjoyed a dominant role in the culture and politics of Ethiopia, having served as the official religion of the ruling Monarchy until its demise(1974). It also has served as the repository of Ethiopia’s literary tradition and its visual arts.

The core area of Christianity is in the highlands of northern Ethiopia, but its influence is felt in the entire country. More than two-fifths of Ethiopians follow the teachings of the Ethiopian Orthodox Church. An additional one-fifth adhere to other Christian faiths, the vast majority of which are Protestant. Islam was introduced in the 7th century and is now practiced by about one-third of Ethiopians. It is most important in the outlying regions, particularly in the Eastern Lowlands, but there are local concentrations felt throughout the country. 



Modern education was an innovation of the emperors Menilek II (reigned 1889–1913) and Haile Selassie I (1930–74), who established an excellent, though limited, system of primary and secondary education. In addition, colleges of liberal arts, technology, public health, building, law, social work, business, agriculture, and theology were opened in the 1950s and ’60s. The education system comprises both formal and non-formal education. Non-formal education includes a broad scope of educational programs for all age categories, catering to both school leavers and new pupils. Formal education comprises pre-school education, primary and secondary education (general education), technical-professional education and higher education.

After 1974 revolution, emphasis was placed on increasing literacy in rural areas. Practical subjects were stressed, as was the teaching of socialism. By 2015, the literacy rate had increased to 49.1%. Recently, there has been massive expansion throughout the educational system. Access to primary is limited to urban locations and they are mostly owned by the private sector and Faith Based organizations. School attendance is lowest in rural areas due to lack of provision and alternative occupations. The school curriculum in later years covers more subjects at a higher level than curricula in most other countries. Low pay and undervaluation of teachers contributes to poor quality teaching. This is exacerbated by large class sizes and poor resources resulting on poor performance on national assessments.

Public education is free at primary, secondary, and tertiary levels. Primary education has a duration of 8 years (age groups 6 to 14) now and is divided into two 4-year cycles (1 through grade 4 and grade 5 through 8). At the end of the grade 4, pupils take a national exam and must achieve a score of at least 50 percent in order to continue to grade 5. At the end of grade 8, pupils take the national Primary School Certificate exam. Two 4-year cycles of primary education are now followed by 2 years of general secondary education. At the end of Grade 10, pupils take the Ethiopian General Secondary Education Certificate / 10th Grade National Examination. This exam is administered by the Ministry of Education’s National Organization for Examinations.

After having successfully completed this exam, students can opt to attend the two general upper grades or follow vocational training. The second phase of preparatory secondary education has also consisted of a 2-year period since 2001 (Grades 11, 12) and is regarded as preparation for higher education. Until 2003, pupils could obtain the Ethiopian School Leaving Certificate (ESLC) at the end of this period. This certificate has since been replaced by the Ethiopian Higher Education Entrance Examination (EHEEE).

For those students, who opt to attend technical and vocational education and training. There are 2-year programs that result in junior level qualifications. In order to be admitted after grade 10, pupils must obtain an Ethiopian General Secondary Education Certificate. There are 1-year and 2-year programs resulting in a Level I and Level II Certificate, and 3-year programs resulting in the Diploma.

There have been improvements in access to primary schools while alternative basic education and innovations such as mobile schools are helping to reach disadvantaged groups and remote rural areas. The number of primary schools in 2013 was 30,534. But the number of secondary schools is much less with only 1,912 Secondary school. 

Addis Ababa University (AAU) was the first university established in 1950 followed by Haramaya University in 1954. By 2007, there were 7 existing universities which were expanding and 13 new public universities had started construction. By 2018, the number of public universities had risen to 50 owned by the Ministry of Education plus the Ethiopian civil service university, Defense university college and Kotebe college of teacher education. There were 64 accredited non-government universities or colleges awarding degrees.



Ethiopia – the second most populous country in Africa – is a one-party state with a planned economy. Ethiopia’s economy experienced strong, broad-based growth averaging 10.3% a year from 2005/06 to 2015/16, compared to a regional average of 5.4%. According to official statistics, Ethiopia’s gross domestic product (GDP) is estimated to have rebounded to 10.9% in FY2017. This growth was driven by government investment in infrastructure, as well as sustained progress in the agricultural and service sectors. More than 70% of Ethiopia’s population is still employed in the agricultural sector, but services have surpassed agriculture as the principal source of GDP.

Ethiopia has the lowest level of income-inequality in Africa and one of the lowest in the world, with a Gini coefficient comparable to that of the Scandinavian countries. Yet despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world, due both to rapid population growth and a low starting base. Changes in rainfall associated with world-wide weather patterns resulted in the worst drought in 30 years in 2015-16, creating food insecurity for millions of Ethiopians. The state is heavily engaged in the economy; Ongoing infrastructure projects include power production and distribution, roads, rails, airports and industrial parks. Key sectors are state-owned, including telecommunications, banking and insurance, and power distribution. Under Ethiopia’s constitution, the state owns all land and provides long-term leases to tenants. 

The expansion of agriculture, construction and services accounted for most of the country’s ongoing progress, with modest manufacturing growth. Private consumption and public investment explain demand-side growth, the latter assuming an increasingly important role. Higher economic growth brought with it positive trends in poverty reduction in both urban and rural areas. In 2000, 55.3% of Ethiopians lived in extreme poverty; by 2015 this figure was 29%. The economic growth rate recently declined to about 8%. The government is implementing the 2nd phase of its Growth and Transformation Plan (GTP II). GTP II, which will run to 2019/20, aims to continue work on physical infrastructure through public investment projects, and to transform Ethiopia into a manufacturing hub. Growth targets are an annual average GDP growth of 11%; in line with manufacturing strategy, it also hopes the industrial sector will grow by an average of 20%, creating jobs.

To boost the economy, the country is pursuing a number of large-scale infrastructure projects, including the Grand Renaissance Dam and a railway network. Ethiopia has had a very high growth rate as result of a very concentrated effort by the government to boost industrial production and manufacturing. According to  American think tank Center for Global Development (CGD), Ethiopia can follow in China’s footsteps, and become a destination for low-wage manufacturing jobs.

Ethiopia’s foreign exchange earnings are led by the services sector – primarily the state-run Ethiopian Airlines – followed by exports of several commodities. While coffee remains the largest foreign exchange earner, Ethiopia is diversifying exports, and commodities such as gold, sesame, khat, livestock and horticulture products are becoming increasingly important. Manufacturing represented less than 8% of total exports in 2016, but manufacturing exports should increase in future years due to a growing international presence.
Ethiopia’s main challenges are sustaining its positive economic growth and accelerating poverty reduction, which requires progress in job creation and improved governance. Sustainable ways to finance infrastructure, support private investment through credit markets, and tap into the growth potential of structural reforms can help the country maintain high economic growth. Key challenges relate to limited competitiveness, an underdeveloped private sector, and political disruption. 
The lack of competitiveness constrains the development of manufacturing, the creation of jobs and the increase of exports. A larger and stronger private sector would seem to be the main response to strengthen Ethiopia’s trade competitiveness and resilience to shocks. The authorities are counting on the expansion of the private sector, especially through foreign investments in the industrial parks, to make Ethiopia’s growth momentum more sustainable. Political disruption associated with social unrest could also negatively impact growth through lower foreign direct investment (FDI), tourism, and exports.
In the past two decades, there has been progress in key human development indicators: primary school enrollment has quadrupled, child mortality been cut in half, and the number of people with access to clean water has more than doubled. There have also been more recent moves to strengthen the fight against malaria and HIV/AIDS. Ethiopia still faces challenges in maternal mortality, nutrition, and gender equality. While access to education has increased, learning outcomes and the quality of education are not keeping pace with it, and there are regional and gender disparities in basic educational proficiency. 
GDP (purchasing power parity):
$195.8 billion (2017 est.)
$180.5 billion (2016 est.)
$167.2 billion (2015 est.)
GDP (official exchange rate):
$79.74 billion (2017 est.)
GDP – real growth rate:
10.9% (2017 est.)
8% (2016 est.)
10.4% (2015 est.) 
GDP – per capita (PPP):
$2,100 (2017 est.)
$2,000 (2016 est.)
$1,900 (2015 est.)
Gross national saving:
28.9% of GDP (2017 est.)
32% of GDP (2016 est.)
31.3% of GDP (2015 est.)
GDP – composition, by sector of origin:
agriculture: 35.8%
industry: 22.2%
services: 42% (2017 est.)
Agriculture – products:
cereals, coffee, oilseed, cotton, sugarcane, vegetables, khat, cut flowers; hides, cattle, sheep, goats; fish.
food processing, beverages, textiles, leather, garments, chemicals, metals processing, cement.
Population below poverty line:
29.6% (2014 est.)
revenues: $12.11 billion
expenditures: $14.63 billion (2017 est.)


Accounting for over 36 percent of GDP, 80 percent of exports, and 70 percent of the labor force, agriculture remained in 2018 the economy’s most important sector after the service sector. Ethiopia has great agricultural potential because of its vast areas of fertile land, diverse climate, generally adequate rainfall, and large labor pool. Despite this potential, however, Ethiopian agriculture has remained under developed.

Historically, Ethiopia was a rare exception in Sub-Saharan Africa, because of its special environmental circumstances, that enabled Ethiopian farmers to increase their productivity, for example by using ploughs. The beneficial climate in the Highlands of Ethiopia also enabled irrigation and other advanced agricultural technology. Regular and reliable harvests helped generate stable tax income that led to relatively strong governmental structures that were ultimately the reason that Ethiopia was the only country not to be colonized in the late-nineteenth century ‘Scramble for Africa’ apart from Liberia.

There are three types of agricultural activity. The first—and by far the most important—is the subsistence smallholder sector, which produces most of the staple grains such as teff, wheat, barley, and oats (on the cooler plateaus) and sorghum, corn (maize), and millet (in warmer areas), as well as pulses such as chickpeas, peas, beans, and lentils. Farm plots are very small, ranging from 3 to 6 acres (1.2 to 2.5 hectares). The second type of agriculture is cash cropping. Products include coffee, oilseeds, beeswax, sugarcane, and khat (qat; Catha edulis), a mild narcotic. Coffee, which is native to Ethiopia, is the single most important export. Subsistence livestock raising, the third agricultural activity, is important in the peripheral lowlands of Ethiopia. Large herds may be kept by a family as it migrates each season in search of grazing and water.

Major cash crops:Coffee, Pulses and oilseed, Flowers, Cotton.

Major staple crops: Grains, Sorghum, millet, and corn, Pulses, Vegetable oils, Ensete (false banana), onions, peppers, squash, cabbage and of course Teff.

The Origin Of  Coffee

Ethiopia is the original home of the coffee (arabica) plant. Kaffa, the province in the south-western highlands where they first blossomed, gave its name to coffee. The formal cultivation and use of coffee as a beverage began early in the 9th century. Prior to that, coffee trees grew wild in the forests of Kaffa, and may in the region were familiar with the berries and the drink. According to Ethiopia’s ancient history, an Abyssinian goatherder, Kaldi, who lived around AD 850, discovered coffee. He observed his goats prancing excitedly and bleating loudly after chewing the bright red berries that grew on some green bushes nearby. Kaldi tried a few berries himself, and soon felt a sense of elation. He filled his pockets with the berries and ran home to announce his discovery. At his wife’s suggestion, he took the berries to the Monks in the monastery near Lake Tana, the source of the Blue Nile River.

Kaldi presented the chief Monk with the berries and related his account of their miraculous effect. “Devil’s work!” exclaimed the monk, and hurled the berries in the fire. Within minutes the monastery filled with the aroma of roasting beans, and the other monks gathered to investigate. The beans were raked from the fire and crushed to extinguish the embers. The chief Monk ordered the grains to be placed in the ewer and covered with hot water to preserve their goodness. That night the monks sat up drinking the rich fragrant brew, and vowed that they would drink it daily to keep them awake during their long, nocturnal devotions.

While this popular account provides a religious approval for the drinking of roasted coffee berries, it is believed that Ethiopian monks were already chewing the berries as a stimulant for centuries before it was brewed. Ethiopian records establish that Ethiopian and Sudanese traders who traveled to Yemen over 600 years ago chewed the berries in route to their destination to survive the harsh difficult journey. Residents of Kaffa, as well as other ethnic groups such as the Oromo were also familiar with coffee. They mixed ground coffee with butter, and consumed them for sustenance. This practice of mixing ground coffee beans with ghee (clarified butter) to give it a distinctive, buttery flavor persists to this day in parts of Kaffa and Sidamo, two of the principle coffee producing regions of Ethiopia.

Brewed coffee, the dry, roasted, ground, non-alcoholic beverage is described as Bunna (in Amharic), Bun (in Tigrigna), Buna (in Oromiya), Bono (in Kefficho), and Kaffa (in Guragigna). Arabic scientific documents dating from around 900 AD refer to a beverage drunk in Ethiopia, known as ‘buna.” This is one of the earliest references to Ethiopian, coffee in its brewed form. It is recorded that in 1454 the Mufti of Aden visited Ethiopia, and saw his own countrymen drinking coffee there. He was suitably impressed with the drink which cured him of some affliction, and his approval made it popular among the dervishes of the Yemen who used it in religious ceremonies, and subsequently introduced it to Mecca.

Electricity access:
population without electricity: 71,200,000
electrification – total population: 24%
electrification – urban areas: 85%
electrification – rural areas: 10% (2013)
Electricity – production:
20.08 billion kWh (2017 est.)
Electricity – consumption:
16.143 billion kWh (2017 est.)
Electricity – exports:
166 million kWh (2015 est.)
Electricity – imports:
0 kWh (2016 est.)
Electricity – installed generating capacity:
Hydroelectric: 3,743 MW (89%)
Wind: 337 MW (8%)
Thermal: 126 MW (3%)
Electricity – from fossil fuels:
7.5% of total installed capacity (2015 est.)
Electricity – from nuclear fuels:
0% of total installed capacity (2015 est.)
Telephones – fixed lines:
total subscriptions: 1.147 million
subscriptions per 100 inhabitants: 1 (July 2016 est.)
Telephones – mobile cellular:
total: 51.224 million
per 100 inhabitants: 49 (July 2016 est.)
Internet country code:
Internet users:
total: 15,731,741
percent of population: 15.4% (July 2016 est.)


Ethiopia continued to see double digit growth in 2014, but 90 percent of GDP is driven by agriculture and other services. The country also faces several constraints slowing down its transformation into an industrialized economy. The importance of developing a skilled labor force and improving the investment climate are among the key areas that will help support the Government of Ethiopia’s plan of becoming a manufacturing powerhouse and increasing incomes by 2025, according to the World Bank’s latest Ethiopia Economic Update report.

Productivity gains are a key factor in determining long-term economic growth and improving living standards. “Ethiopia needs to improve how well firms are managed and how products and services are delivered,” said Lars Christian Moller Lead Economist and Program Leader. “There also needs to be improvements in how well the overall economy is able to reassign resources from lagging firms to more dynamic ones.” Ethiopia has not made significant progress in pulling labor out of agriculture into more productive and industrial jobs with three-quarters of all workers still employed in agriculture. For a country graduating through the early stages of economic development, growth in the industrial sector is essential for sustained long-term growth and poverty reduction. The structural economic transformation that involves the reallocation of workers from the poorly productive agriculture to more productive economic activities in manufacturing is an important step towards the creation of better-paying jobs.

In its effort to accelerate manufacturing growth, Ethiopia is implementing an ambitious Industrial Park program. Using this approach, the strategy hinges on attracting Foreign Direct Investment (FDI) in the export-led and labor-intensive manufacturing sector. The imperative is to build on the country’s agricultural foundations by moving toward new tradable activities in manufacturing that absorb large numbers of young and semi-skilled workers. Several challenges need to be addressed in order for Ethiopia to accelerate its structural transformation and significantly expand light manufacturing, which is vital for sustaining economic growth and development. Ethiopia’s skills gap and constraints related to access to land, infrastructure, trade logistics, and customs regulations in private investment have hindered the acceleration to structural transformation, unlike in East Asia, where foreign direct investment was able to capitalize on a large pool of trainable labor, enabling investors to improve productivity while benefitting from low production costs.

In order to alleviate this problem the Government of Ethiopia should increase productivity through skills development, improve access to finance for firms especially for SMEs, address binding constraints including access to land and electricity, improve tax administration and simplify the tax system, improve trade logistics, customs procedures and trade regulations, to promote export and FDI, simplify business entry regulations and processes to promote a dynamic and thriving business sector, and use a strategic and phased approach to develop Industrial Parks based on best international practices. 


Banking and Finance 

A strong economic performance since the mid-2000s has helped turn Ethiopia into one of the fastest growing non-oil producing economies on the continent. The country has also enjoyed sustained inflows of official development assistance and foreign direct investments (FDI), as well as sizable growth in exports, dominated by coffee, oilseeds and flowers. Growth has however slowed since 2008 as economic performance was affected by deteriorating terms of trade and balance. 

The National Bank of Ethiopia is the country’s central bank. It issues the national currency, the birr, and is also responsible for regulatory functions. There are many commercial banks, most of which are located in Addis Ababa. The Commercial Bank of Ethiopia is the largest commercial bank, with branches throughout the country. The Development Bank of Ethiopia provides loans for agricultural and livestock development and investment in manufacturing. Since the end of the 20th century, more financial institutions have begun extending loans for business and real-estate development.

Ethiopia’s financial system is small and largely dominated by the state. Currently public banks account for 67% of total deposits and 55% of loans and advances. Government dominates lending, controls interest rates, and owns the largest bank, the Commercial Bank of Ethiopia (CBE) whose assets represent about 70 percent of the sector total, as of April 2012. Negative real interest rates (stemming from high inflation and low deposit rates), high reserve money growth, bank-by-bank credit ceilings, and a lack of competition in the banking sector have contributed to the economy’s continued demonetization in recent years, which is posing increasing risks to financial stability.

Authorities have made commitments to promote monetization, improve liquidity management and achieve positive real interest rates in the financial sector, but reversing demonetization remains a major challenge. The supply of money has, in general, followed the development of the economy; the authorities have aimed at tolerable increases in the price level, although some prices soared during the 1970s and ’80s. Long pegged to the U.S. dollar, the pound was allowed to float in January 2003.

Ethiopia’s banking sector included 16 commercial banks in 2012. While the state has recently allowed the local private sector to participate in banking which brought about a rapid expansion of private banks, foreign ownership and branch operations remain strictly barred. Private banks have generally outperformed their state-owned counterparts and their market share of resource mobilization exceeds that of public banks, with market share of loan collections and deposits rising to 49 percent and 52 percent in 2007-2008. However, the share of new loans disbursements controlled by private banks for the same period decreased, and stood at 43.3 percent in 2007-2008. The banking sector as a whole, while remaining relatively sound, is characterized by excess liquidity. Non-performing loan ratio standing at 1.8 percent as of March 2012 appears unusually low, especially given the strong domestic credit expansion.

The non-banking sector remains largely undeveloped, except for 16 insurance companies with about 190 branches across the country. Mobile banking is an underserved sector with strong growth potential. Very low cell phone penetration has prevented the rapid development of mobile banking, which has taken place elsewhere in Africa. However, the mobile phone industry has just started to discover Ethiopia as a relatively large, untapped market. A number of operators are thus preparing to launch, or have already launched, payment and transaction systems supported by mobile technology. The fixed income market is fairly limited and prevailing negative real interest rates have adversely affected the demand for securities. While 28 day, 3-month and 6-month Treasury bills are regularly issued, there is no formal government bond market, with bonds irregularly issued for specific purposes only. As of March 2017, Standard & Poor’s credit rating for Ethiopia stands at B with stable outlook. Moody’s credit rating for Ethiopia was last set at B1 with stable outlook. Fitch’s credit rating for Ethiopia was last reported at B with stable outlook.


A colorful nation and home for more than 80 nation nationalities and peoples, believed to be the cradle of human civilization, Ethiopia is one of Africa’s most beguiling destinations. The only country on the continent never to be colonized, it wears its ancient past with pride and has largely shrugged off a turbulent recent history. Ethiopia’s nature, culture, and history merge to form a timeless appeal.

The country’s impressive tourism potential is truly a land of contrast and extremes, a land of remote and wild place, and of spectacular alpine terrain including the Semien mountain national park with its high 4620 meters peak at Ras Dashen one of UNESCO’s registered heritage site; and at the other end of spectrum, the Danakil depression 121 meters below sea level is among the lowest places on earth. The modern capital, Addis Ababa, is home to world-class museums and hectic streets that redefine the word bustling. Aksum, the ancient capital, is UNESCO protected and has a wealth of churches and tombs. The castles of Gondar are among East Africa’s best-preserved archaeological sites.

However, these untapped and unexplored huge potential resources have not been exhaustively utilized at the national level. Tourism contributes to about two-fifths of Ethiopia’s GDP. Unfortunately, potential has been limited because of a lack of tourism infrastructure and continuing political instability in the country. Among other reasons, lack of the required skills and knowledge. Although tourism was curtailed during the period of Derg rule, Ethiopia once again promotes the tourist potential of such historical wonders as the rock-hewn churches of Lalibela, the antiquities at Aksum, the Gonder castles, Ethiopia’s diverse peoples, their intriguing cultures, and the natural beauty of their land.

One encouraging aspect is the growing popularity of ecotourism, with significant potential for growth in Ethiopia. Travel retail sales are expected to continue to grow, posting an increase of 10% in 2016. Sales are driven primarily by expanding interest in ecotourism packages, including adventure travel, trekking and walking safaris that are making up much of the tour operators’ revenues.

Major Attraction

The Rift Valley: The Ethiopian Rift Valley, which is part of the famous East African Rift Valley, comprises numerous hot springs, beautiful lakes and a variety of wildlife. The valley is the result of two parallel faults in the earth’s surface between which, in distant geological time, the crust was weakened, and the land subsided. Ethiopia is often referred to as the ” water tower” of Eastern Africa because of the many rivers that pour off the high tableland. The Great Rift Valley’s passage through Ethiopia is marked by a chain of seven lakes.

Axum, in its heyday, was a great commercial center, issuing its own currency and trading with Egypt, Arabia, Persia, India and even Ceylon. The settlement was also the site of Ethiopia’s oldest church, which dated back to the coming of Christianity as the state religion, early in the 4th Century. The original building has long since disappeared but a structure erected on its site by Emperor Fasiladas in the early 17th Century is still there. A nearby outhouse is the reputed repository of the biblical Ark of the Covenant. This historic relic cannot be seen but visitors there can see and photograph a number of the remarkable crowns that belonged to several notable Ethiopian monarchs of the past.

Lalibela, a  medieval settlement in the Lasta area of Wallo, lies at the center of an extensive complex of rock churches. Some can be reached by one or two hours’  drive, others are a full day’s journey. Lalibela has 11 remarkable rock-hewn monolithic churches, believed to have been built by King Lalibela in the late 12th or early 13th Century. These notable structures are carved, inside and out,  into the solid rock, and are considered to be among the wonders of the world.  Each building is architecturally unique but each reflects beautifully executed craftsmanship, and several are decorated with fascinating paintings. These astonishing edifices remain places of living worship to this day.

Gonder was the 17th Century capital of Ethiopia and is notable for its medieval Castles and churches. The City’s unique imperial compound contains a number of Castles built between 1632 and 1855 by the various Emperors who reigned during this period. These dramatic castles, unlike any other African, display a richness in architecture that reveals the Axumite traditions as well as the influence of Arabia.

Bahar Dar is a small town set on the southeastern shore of Lake Tana, where local fishermen still use papyrus boats and just 30 km from the spectacular Tissisat Falls. Here the Blue Nile creates ” Smoking Water” an awe-inspiring sight as it plunges into the gorge below.


  • Pre History

    Details on the origins of all the peoples that make up the population of highland Ethiopia were still matters for research and de bate in the early 1990s. Anthropologists believe that East Africa’s Great Rift Valley is the site of humankind’s origins. (The valley traverses Ethiopia from southwest to northeast.) In 1974 archaeologists excavating sites in the Awash River valley discovered 3.5-million-year-old fossil skeletons, which they named Australopithecus afarensis. These earliest known hominids stood upright, lived in groups, and had adapted to living in open areas rather than in forests.

    The late Stone Age, recent research in historical linguistics—and increasingly in archaeology as well—has begun to clarify the broad outlines of the prehistoric populations of present day Ethiopia. These populations spoke languages that belong to the Afro-Asiatic super-language family, a group of related languages that includes Omotic, Cushitic, and Semitic, all of which are found in Ethiopia today. Linguists postulate that the original home of the Afro-Asiatic cluster of languages was somewhere in northeastern Africa, possibly in the area between the Nile River and the Red Sea in modern Sudan. From here the major languages of the family gradually dispersed at different times and in different directions—these languages being ancestral to those spoken today in northern and northeastern Africa and far southwestern Asia.

    The first language to separate seems to have been Omotic, at a date sometime after 13,000 B.C. Omotic speakers moved southward into the central and southwestern highlands of Ethiopia, followed at some subsequent time by Cushitic speakers, who settled in territories in the northern Horn of Africa, including the northern highlands of Ethiopia. The last language to separate was Semitic, which split from Berber and ancient Egyptian, two other Afro-Asiatic languages, and migrated eastward into far south western Asia.

    By about 7000 B.C. at the latest, another linguistic evidence indicates that both Cushitic speakers and Omotic speakers were present in Ethiopia. Linguistic diversification within each group thereafter gave rise to a large number of new languages. In the case of Cushitic, these include Agew in the central and northern highlands and, in regions to the east and southeast, Saho, Afar, Somali, Sidamo, and Oromo, all spoken by peoples who would play major roles in the subsequent history of the region. Omotic also spawned a large number of languages, Welamo (often called Wolayta) and Gemu-Gofa being among the most widely spoken of them.

    During the first millennium B.C. and possibly even earlier, various Semitic-speaking groups from Southwest Arabia began to cross the Red Sea and settle along the coast and in the nearby highlands. These migrants brought with them their Semitic speech (Sabaean and perhaps others) and script (Old Epigraphic South Arabic) and monumental stone architecture. A fusion of the newcomers with the indigenous inhabitants produced a culture known as preAksumite. The factors that motivated this settlement in the area are not known, but to judge from subsequent history, commercial activity must have figured strongly. However, The most recent research, shows that Ge’ez, the ancient Semitic language spoken in Eritrea and northern Ethiopia in ancient times, is not derived from Sabaean. There is evidence of a Semitic-speaking presence in Eritrea and northern Ethiopia at least as early as 2000 BC.

    The first kingdom known to have existed in Ethiopia as well as Eritrea was the kingdom of D’mt, with its capital at Yeha, where a Sabaean style temple was built around 700 BC. It rose to power around the 10th century BC and ended in the 5th centuries BC. The kingdom is known for developing the irrigation schemes, used plows, grew millet, and made iron tools and weapons. Few inscriptions by or about this kingdom survive and very little archaeological work has taken place. As a result, it is not known whether Dʿmt ended as a civilization before Aksum’s early stages, evolved into the Aksumite state, or was one of the smaller states united in the Aksumite kingdom possibly around the beginning of the 1st century. 

    The port city of Adulis, near modern-day Mitsiwa, was a major regional entrepot and probably the main gateway to the interior for new arrivals from Southwest Arabia. Archaeological evidence indicates that by the beginning of the Christian era this pre-Aksumite culture had developed western and eastern regional variants. The former, which included the region of Aksum, was probably the polity or series of polities that became the Aksumite state.

  • The Aksumite Kingdom

    The Aksumite state emerged at about the beginning of the Christian era, flourished during the succeeding six or seven centuries, and underwent prolonged decline from the eighth to the twelfth century A.D. Aksum’s period of greatest power lasted from the fourth through the sixth century. Its core area lay in the highlands of what is today southern Eritrea, Tigray, Lasta (in present-day Welo), and Angot (also in Welo); its major centers were at Aksum and Adulis. Earlier centers, such as Yeha, also continued to flourish. At its height, Aksum extended its influence westward to the kingdom of Meroe, southward toward the Omo River, and eastward to the spice coasts on the Gulf of Aden. Even the South Arabian kingdom of the Himyarites, across the Red Sea in what is now Yemen, came under the suzerainty of Aksum.  However, Christian power in South Arabia ended after 572, when the Persians invaded and disrupted trade. They were followed 30 years later by the Arabs, whose rise in the 7th and 8th centuries cut off Aksum’s trade with the Mediterranean world.

    The Aksumites created a civilization of considerable distinction. They devised an original architectural style and employed it in stone palaces and other public buildings. They also erected a series of carved stone stelae at Aksum as monuments to their deceased rulers. These records were written in two languages—Gi’iz and Greek. Gi’iz is assumed to be ancestral to modern Amharic and Tigrinya, although possibly only indirectly. Even more remarkable and wholly unique for ancient Africa was the minting of coins over an approximately 300-year period. These coins, many with inlay of gold on bronze or silver, provide a chronology of the rulers of Aksum.

    One of the most important contributions the Aksumite state made to Ethiopian tradition was the establishment of the Christian Church. The Aksumite state and its forebears had certainly been in contact with Judaism since the first millennium B.C. and with Christianity beginning in the first century A.D. During the second and third centuries, Christianity spread throughout the region. Around A.D. 330-40, Ezana was converted to Christianity and made it the official state religion. The variant of Christianity adopted by the Aksumite state, however, eventually followed the Monophysite belief, which embraced the notion of one rather than two separate natures in the person of Christ as defined by the Council of Chalcedon in 451.

    The rise of Islam in the Arabian Peninsula had a significant impact on Aksum during the seventh and eighth centuries. By the time of the Prophet Muhammad’s death (A.D. 632), the Arabian Peninsula, and thus the entire opposite shore of the Red Sea, had come under the influence of the new religion. The steady advance of the faith of Muhammad through the next century resulted in Islamic conquest of all of the former Sassanian Empire and most of the former Byzantine dominions. Despite the spread of Islam by conquest elsewhere, the Islamic state’s relations with Aksum were not hostile at first. According to Islamic tradition, some members of Muhammad’s family and some of his early converts had taken refuge with the Aksumites during the troubled years preceding the Prophet’s rise to power, and Aksum was exempted from the jihad, or holy war, as a result. Problems between Aksum and the new Arab power, however, soon developed. The establishment of Islam in Egypt and the greatly reduced Aksum’s relations with the major Christian power, the Byzantine Empire.

    Although contact with individual Christian churches in Egypt and other lands continued, the Muslim conquests hastened the isolation of the church in Aksum. Limited communication continued, the most significant being with the Coptic Church in Egypt, which supplied a patriarch to the Aksumites. Such contacts, however, were insufficient to counter an ever-growing ecclesiastical isolation. Perhaps more important, Islamic expansion threatened Aksum’s maritime contacts, already under siege by Sassanian Persians. Red Sea and Indian Ocean trade, formerly dominated by the Byzantine Empire, Aksum, and Persia, gradually came under the control of Muslim Arabs, who also propagated their faith through commercial activities and other contacts.

  • The Zagwe Dynasty

    By the middle of the ninth century, Islam had spread to the southern coast of the Gulf of Aden and the coast of East Africa, and the foundations were laid for the later extensive conversions of the local populace to Islam in these and adjacent regions. East of the central highlands, a Muslim sultanate, Ifat, was established by the beginning of the twelfth century, and some of the surrounding Cushitic peoples were gradually converted.

    As Christian shipping disappeared from the Red Sea, Aksum’s towns lost their vitality. The Aksumite state turned southward, conquering adjacent grain-rich highlands. Monastic establishments moved even farther to the south; for example, a major church was founded near Lake Hayk in the 9th century. This southward expansion continued over the next several centuries. The favored technique involved the establishment of military colonies, which served as core populations from which Aksumite culture, the Semitic language, and Christianity spread to the surrounding Agew population.

    By the tenth century, a Post-Aksumite Christian kingdom had emerged that controlled the central northern highlands from modern Eritrea to Shewa and the coast from old Adulis to Zeila in present-day Somalia, territory considerably larger than the Aksumites had governed. Military colonies were also established farther afield among the Sidama people of the central highlands. These settlers may have been the forerunners of such Semitic-speaking groups as the Argobba, Gafat (extinct), Gurage, and Hareri, although independent settlement of Semitic speakers from Southwest Arabia is also possible. During the eleventh and twelfth centuries, the Shewan region was the scene of renewed Christian expansion, carried out, it appears, by one of the more recently Semiticized peoples—the Amhara.

    Over time, one of the subject peoples, the Agaw, learned Geʿez, became Christian and assimilated their Aksumite oppressors to the point that Agaw princes were able to transfer the seat of the empire southward to their own region of Lasta. Thus, about 1137 ad new dynasty came to power in the Christian highlands. Known as the Zagwe and based in the Agew district of Lasta, it developed naturally out of the long cultural and political contact between Cushitic- and Semitic-speaking peoples in the northern highlands. Later ecclesiastical texts accused this dynasty of not having been of pure “Solomonic” stock (i.e., not descended from the union of Solomon and the Queen of Sheba), but it was in the religious plane that the Zagwe nonetheless distinguished themselves.

    Staunch Christians, the Zagwe devoted themselves to the construction of new churches and monasteries. These were often modeled after Christian religious edifices in the Holy Land, a locale the Zagwe and their subjects held in special esteem. Patrons of literature and the arts in the service of Christianity, the Zagwe kings were responsible, among other things, for the great churches carved into the rock in and around their capital at Adefa(Roha). In time, Adefa became known as Lalibela, the name of the Zagwe king to whose reign the Adefa churches’ construction has been attributed. At the Zagwe capital of Roha (modern-day Lalibela), Emperor Lalibela (reigned c. 1185–1225) directed the hewing of 11 churches out of living rock—a stupendous monument to Christianity, which he and the other Zagwes fostered along with the Ethiopianization of the countryside.

    The “Restoration” of the “Solomonic” Line

    The Zagwe ‘s championing of Christianity and their artistic achievements notwithstanding, there was much discontent with Lastan rule among the populace in what is now Eritrea and Tigray and among the Amhara, an increasingly powerful people who inhabited a region called Amhara to the south of the Zagwe center at Adefa. About 1270, an Amhara noble, Yekuno Amlak, drove out the last Zagwe ruler and proclaimed himself as a king. His assumption of power marked yet another stage in the southward march of what may henceforth be termed the ‘ ‘Christian kingdom of Ethiopia” and ushered in an era of increased contact with the Levant, the Middle East, and Europe. The new dynasty that Yekuno Amlak founded came to be known as the “Solomonic” dynasty because its scions claimed descent not only from Aksum but also from King Solomon of ancient Israel.

  • The Reign of Fasiladas

    Following close upon the Portuguese musketeers were missionaries who, sent by the Jesuit founder St. Ignatius of Loyola, sought to convert Ethiopia to the Western church. The most successful of these was the Jesuit Pedro Páez; his personal authority and eminent qualities were such that Emperor Susenyos (reigned 1607–32) was persuaded to accept the doctrine of the dual nature of Christ and to notify the pope of his submission. This apostasy was joined by many in the royal court but met with violent resistance from the provincial nobles, the church, and the people at large. Susenyos was forced to abdicate in favour of his son Fasilides (reigned 1632–67).

    Although the Gonder period produced a flowering of architecture and art that lasted more than a century, Gonder monarchs never regained full control over the wealth and manpower that the nobility had usurped during the long wars against Gran and then the Oromo. Many nobles, commanding the loyalty of their home districts, had become virtually independent, especially those on the periphery of the kingdom. Moreover, during Fasiladas ‘s reign and that of his son Yohannis I (reigned 1667-82). Iyasu I (reigned 1682-1706) was a celebrated military leader who excelled at the most basic requirement of the warrior-king. He campaigned constantly in districts on the south and southeast of the kingdom and personally led expeditions to Shewa and beyond, areas from which royal armies had long been absent. Iyasu also attempted to mediate the doctrinal quarrel in the church, but a solution eluded him. He sponsored the construction of several churches, among them Debre Birhan Selassie, one of the most beautiful and famous of the churches in Gonder.

    Fasilides established a new capital at Gonder, a trading centre north of Lake Tana that connected the interior to the coast. At its height about 1700, the city supported the arts and educational, religious, and social institutions as well as Beta Israel craftspeople, Muslim traders, and a large population of farmers, day labourers, students, and soldiers. Emperor Fasiladas kept out the disruptive influences of the foreign Christians, dealt with sporadic Muslim incursions, and in general sought to reassert central authority and to reinvigorate the Solomonic monarchy and the Orthodox Church. He revived the practice of confining royal family members on a remote mountaintop to lessen challenges to his rule and distinguished himself by reconstructing the cathedral at Aksum (destroyed by Gran) and by establishing his camp at Gonder—a locale that gradually developed into a permanent capital and became the cultural and political center of Ethiopia during the Gonder period.

    The court sponsored secular and religious construction, manuscript writing and copying, the verbal arts, and painting. A second wave of cultural productivity followed, in the middle decades of the 18th century under the sponsorship of Empress Mentewwab (reigned 1730–69), a remarkable woman who ruled jointly with her son and grandson. However, ethnic, regional, and religious factionalism undermined the kingdom and led in 1769 to its collapse.

    Iyasu ‘s reign also saw the Oromo begin to play a role in the affairs of the kingdom, especially in the military sense. In the late 16th and early 17th centuries, conquests by the Abyssinian Empire in southern and southwestern Ethiopia had left a territorial vacuum, allowing the pastoral Oromo to settle in the vacated territories and incorporate socially dislocated peoples into their gada system. As they moved into earlier Islamic hubs, the Oromos increasingly adopted Islam, and Iyasu on his part co-opted some of the Oromo groups by enlisting them into his army and by converting them to Christianity.

    In the first decades of the 19th century, three Oromo monarchies, Enarya, Goma and Guma, rose to prominence. The collective area was known as Orormo-land and comprised most of central and southern Ethiopia, including lands now held by other ethnic regions.One of the Oromo leaders named Ras Gobana Dacche led the development of modern Ethiopia and the political and military incorporation of more territories into Ethiopian borders. Gobana, under the authority of Amhara ruler Emperor Menelik II, incorporated several and brought large sections of the Horn of Africa into a centralized Ethiopian state. 

  • Modern Ethiopia

    The state’s largest ethnic Oromo were neither politically nor culturally unified. Some were Christian, spoke Amharic, and had intermarried with the Amhara. Other Christian Oromo retained their language, although their modes of life and social structure had changed extensively from those of their pastoral kin. At the eastern edge of the highlands, many had converted to Islam, especially in the area of the former sultanates of Ifat and Adal.

    The Oromo people, whether or not Christian and Amhara in culture, played important political roles in the Zemene Mesafint—often as allies of Amhara aspirants to power but sometimes as kingmakers in their own right. Meanwhile, to the south of the kingdom, segments of the Oromo population—cultivators and suppliers of goods exportable to the Red Sea coast and beyond—had developed kingdoms of their own, no doubt stimulated in part by the examples of the Amhara to the north and the Sidama kingdoms to the south. The seventeenth through nineteenth century was a period not only of migration but also of integration, as groups borrowed usable techniques and institutions from each other. In the south, too, Islam had made substantial inroads. Many Oromo chieftains found Islam a useful tool in the process of centralization as well as in the building of trade networks.

    Tewodros II’ s origins were in the Era of the Princes, but his ambitions were not those of the regional nobility. He sought to reestablish a cohesive Ethiopian state and to reform its administration and church. He did not initially claim Solomonic lineage but did seek to restore Solomonic hegemony, and he considered himself the “Elect of God.” Later in his reign, suspecting that foreigners considered him an upstart and seeking to legitimize his reign, he added “son of David and Solomon” to his title. Tewodros’ s first task was to bring Shewa under his control. During the Era of the Princes, Shewa was, even more than most provinces, an independent entity, its ruler even styling himself negus. In the course of subduing the Shewans, Tewodros imprisoned a Shewan prince, Menelik, who would later become emperor himself. Despite his success against Shewa, Tewodros faced constant rebellions in other provinces.

    In the first six years of his reign, the new ruler managed to put down these rebellions, and the empire was relatively peaceful from about 1861 to 1863. The energy, wealth, and manpower necessary to deal with regional opposition, however, limited the scope of Tewodros’s other activities. By 1865 other rebels had emerged, including Menelik, who had escaped from prison and returned to Shewa, where he declared himself negus. In addition to his conflicts with rebels and rivals, Tewodros encountered difficulties with the European powers. Seeking aid from the British government (he proposed a joint expedition to conquer Jerusalem), he became unhappy with the behavior of those Britons whom he had counted on to advance his request, and he took them hostage. In 1868, as a British expeditionary force sent from India to secure release of the hostages stormed his stronghold, Tewodros committed suicide.

    Tewodros never realized his dream of restoring a strong monarchy, although he took some important initial steps. He sought to establish the principle that governors and judges must be salaried appointees. He also established a professional standing army, rather than depending on local lords to provide soldiers for his expeditions. He also intended to reform the church, believing the clergy to be ignorant and immoral, but he was confronted by strong opposition when he tried to impose a tax on church lands to help finance government activities.

    In 1872 Kasa Mercha was crowned negusa nagast in a ceremony at the ancient capital of Aksum, taking the throne name of Yohannis IV.  From the beginning of his reign, he was confronted with the growing power of Menelik, who had proclaimed himself king of Shewa and traced his Solomonic lineage to Lebna Dengel. While Yohannis was struggling against opposing factions in the north, Menelik consolidated his power in Shewa and extended his rule over the Oromo to the south and west. He garrisoned Shewan forces among the Oromo and received military and financial support from them. In many of Yohannis ‘s external struggles, Menelik maintained separate relations with the emperor’s enemies and continued to consolidate Shewan authority in order to strengthen his own position. In a subsequent agreement designed to ensure the succession in the line of Yohannis, one of Yohannis ‘s younger sons was married to Zawditu, Menelik’ s daughter.The khedive in Egypt envisioned a “Greater Egypt” that would encompass Ethiopia. In pursuit of this goal, an Egyptian force moved inland from present-day Djibouti but was annihilated by Afar tribesmen

  • Menelik II

    The Battle of Gundet and Gura

    The Battle of Gura was fought on March 7–9, 1876 between the Ethiopian Empire and the Khedivate of Egypt near the town of Gura in Eritrea. It was the decisive battle of the Ethiopian–Egyptian War. The Egyptians invaded from their coastal possessions in what is now Eritrea. The armies of Yohannes and Isma’il met at Gundet on the morning of 16 November 1875. There was a crushing rout of the vastly-outnumbered but well equipped invading Egyptian force at the hands of the defending Ethiopian force. News of this huge defeat was suppressed in Egypt for fear that it would undermine the government of the Khedivate. After the defeat at Gundet, the Egyptians sent another, much larger force, which was armed to the teeth to invade from the north. They built a fort there but were again defeated at the Battle of Gura in March 1876.

    By 1900 Menelik had succeeded in establishing control over much of present-day Ethiopia and had, in part at least, gained recognition from the European colonial powers of the boundaries of his empire. Although in many respects a traditionalist, he introduced several significant changes. His decision in the late 1880s to locate the royal encampment at Addis Ababa (“New Flower”) in southern Shewa led to the gradual rise of a genuine urban center and a permanent capital in the 1890s, a development that facilitated the introduction of new ideas and technology.

    The capital’s location symbolized the empire’s southern reorientation, a move that further irritated Menelik’s Tigrayan opponents and some Amhara of the more northerly provinces who resented Shewan hegemony. Menelik also authorized a French company to build a railroad, not completed until 1917, that eventually would link Addis Ababa and Djibouti. Menelik embarked on a program of military conquest that more than doubled the size of his domain. Enjoying superior fire power, his forces overran the Kembata and Welamo regions in the southern highlands. Also subdued were the Kefa and other Oromo and Omotic-speaking peoples.

    Expanding south, Menelik introduced a system of land rights considerably modified from that prevailing in the Amhara-Tigray highlands. These changes had significant implications for the ordinary cultivator in the south and ultimately were to generate quite different responses there to the land reform programs that would follow the revolution of 1974.  While Menelik was extending his empire, European colonial powers were showing an interest in the territories surrounding Ethiopia. Menelik considered the Italians a formidable challenge and negotiated the Treaty of Wuchale with them in 1889. Among its terms were those permitting the Italians to establish their first toehold on the edge of the northern highlands and from which they subsequently sought to expand into Tigray.

    The agreements over the contents of the treaty eventually induced Menelik to renounce it and repay in full a loan Italy had granted as a condition. Thereafter, relations with Italy were further strained as a result of the establishment of Eritrea as a colony and Italy’s penetration of the Somali territories. Italian ambitions were encouraged by British actions in 1891, Britain agreed with the Italian government that Ethiopia should fall within the Italian sphere of influence. France, however, encouraged Menelik to oppose the Italian threat by delineating the projected boundaries of his empire. Anxious to advance French economic interests through the construction of a railroad from Addis Ababa to the city of Djibouti in French Somaliland, France accordingly reduced the size of its territorial claims there and recognized Ethiopian sovereignty in the area.

    The Battle of Adwa 

    Italian-Ethiopian relations reached a low point in 1895, when Ras Mengesha of Tigray, hitherto reluctant to recognize the Shewan emperor’s claims, was threatened by the Italians and asked for the support of Menelik. In late 1895, Italian forces invaded Tigray. However, Menelik completely routed them in early 1896 as they approached the Tigrayan capital, Adwa. This victory brought Ethiopia new prestige as well as general recognition of its sovereign status by the European powers. Besides confirming the  annulment of the Treaty of Wuchale, the peace agreement ending the conflict also entailed Italian recognition of Ethiopian independence; in return, Menelik permitted the Italians to retain their colony of Eritrea.

  • Haile Selassie

    April 1930, Negus Tafari was crowned Haile Selassie I, “Conquering Lion of the Tribe of Judah, Elect of God, and King of Kings of Ethiopia.” As emperor, Haile Selassie continued to push reforms aimed at modernizing the country and breaking the nobility’s authority. In July 1931, the emperor granted a constitution that asserted his own status, reserved imperial succession to the line of Haile Selassie, and declared that “the person of the Emperor is sacred, his dignity inviolable, and his power indisputable.” All power over central and local government, the legislature, the judiciary, and the military remained with the emperor. The emperor took nonmilitary measures to promote loyalty to the throne and to the state. He established new elementary and secondary schools in Addis Ababa, and some 150 university-age students studied abroad. The government enacted a penal code in 1930, imported printing presses to provide nationally oriented newspapers, increased the availability of electricity and telephone services, and promoted public health. The Bank of Ethiopia, founded in 1931, commenced issuing Ethiopian currency.

    Mussolini’s Invasion and the Italian Occupation

    A latecomer to the scramble for colonies in Africa, Italy established itself first in Eritrea In the 1880s and secured Ethiopian recognition of its claim in 1889. Despite its failure to penetrate Tigray in 1896, Italy retained control over Eritrea. A succession of Italian chief administrators, or governors, maintained a degree of unity and public order in a region marked by cultural, linguistic, and religious diversity. 

    After Benito Mussolini assumed power in Italy in 1922, the colonial government in Eritrea changed. The new administration stressed the racial and political superiority of Italians, authorized segregation, and relegated the local people to the lowest level of public employment. Nonetheless, it became clear that Italy wished to expand and link its holdings in the Horn of Africa. In September 1935, the League of Nations exonerated both parties in the Wal Wal incident. The long delay and the intricate British and French maneuvering persuaded Mussolini that no obstacle would be placed in his path.  On October 3, 1935, Italy attacked Ethiopia from Eritrea and Italian Somali-land without a declaration of war. On October 7, the League of Nations unanimously declared Italy an aggressor but took no effective action.

    Despite a valiant defense, the next six months saw the Ethiopians pushed back on the northern front and in Harerge. Acting on long standing grievances, a segment of the Tigray forces defected, as did Oromo forces in some areas. Moreover, the Italians made widespread use of chemical weapons and air power. On March 31, 1936, the Ethiopians counterattacked the main Italian force at Maychew but were defeated. By early April 1936, Italian forces had reached Dese in the north and Harer in the east. On May 2, Haile Selassie left for French Somaliland and exile—a move resented by some Ethiopians who were accustomed to a warrior emperor. The Italian forces entered Addis Ababa on May 5. Four days later, Italy announced the annexation of Ethiopia.

    On June 30, Haile Selassie made a powerful speech before the League of Nations in Geneva in which he set forth two choices support for collective security or international lawlessness. The emperor stirred the conscience of many and was thereafter regarded as a major international figure. Britain and France, however, soon recognized Italy’s control of Ethiopia. Among the major powers, the United States and the Soviet Union refused to do so.

    Selassie’s army consisted of around 500,000 men, some of whom were armed with spears and bows; other soldiers carried more modern weapons, including rifles but many of these were pre-1900 equipments and obsolete. According to Italian estimates, on the eve of hostilities, the Ethiopians had an army of 350,000–760,000 men. Only about 25 percent of the army had any military training and the men were armed with a motley of 400,000 rifles of every type and in every condition.  The serviceable portion of the Imperial Ethiopian Air Force under the command of the French Andre Maillet, included three obsolete Potez 25 biplanes. Fifty foreign mercenaries joined the Ethiopian forces, including French pilots like Pierre Corriger, the Trinidadian pilot Hubert Julian, an official Swedish military mission under Captain Viking Tamm, the White Russian Feodor Konovalov and the Czechoslovak writer Adolf Parlesak. Several Austrian Nazis, a team of Belgian Fascists and Cuban mercenary.On May 5, 1941, Haile Selassie reentered Addis Ababa, but it was not until January 1942 that the last of the Italians, cut off near Gonder, surrendered to British and Ethiopian forces.

  • The End of the Monarchy 

    Despite criticism of the emperor’s 1936 decision to go into exile, the concept of the monarchy remained widely accepted after World War II. The country’s leaders and the church assumed that victory over the Italians essentially meant the restoration of their traditional privileges. Before long, however, new social classes stirred into life by Haile Selassie’s centralizing policies, as well as a younger generation full of frustrated expectations, clashed with forces bent on maintaining the traditional system. Overt dissidence in Tigray during Haile Selassie’s reign centered on the 1943 resistance to imperial rule known as the Weyane. The movement took advantage of popular discontent against Amhara rule but was primarily a localized resistance to imperial rule that depended on three main sources of support. These were the semi pastoralists of eastern Tigray, including the Azebo and Raya, who believed their traditional Oromo social structure to be threatened; the local Tigray nobility, who perceived their position to be en- dangered by the central government’s growth; and the peasantry, who felt victimized by government officials and their militias

    In pursuit of reform , Emperor Haile Selassie faced the recalcitrance of the provincial nobility, other great landholders, and church officials, all of whom intended to maintain their power and privileges. Moreover, some provincial nobility opposed the emperor because of their own long-held claims to the throne. Whatever his intentions as a reformer, Haile Selassie was a political realist and recognized that, lacking a strong military, he had to compromise with the Amhara and Tigray nobility and with the church. And, where required, he made his peace with other ethnic groups in the empire. For example, he eventually granted autonomy over Afar areas that Addis Ababa could not dominate by armed force to the sultan of Aussa. In general, political changes were few and were compromised at the first sign of substantial opposition. In the 1950s, despite his many years as emperor and his international stature, there was almost no significant section of the Ethiopian population on which Haile Selassie could rely to support him in such efforts.

    Haile Selassie’s efforts to achieve a measure of change without jeopardizing his own power stimulated rising expectations, some of which he was unwilling or unable to satisfy. Impatient with the rate or form of social and political change, several groups conspired to launch a coup d’etat on December 13, 1960, while the emperor was abroad on one of his frequent trips. The leadership of the 1960 revolt came from three groups: the commander of the Imperial Bodyguard, Mengistu Neway, and his followers; a few security offi- cials, including the police chief; and a handful of radical intellec- tuals related to the officials, including Girmame Neway, Mengistu ‘s brother. The coup was initially successful in the capital, as the rebels seized the crown prince and more than twenty cabinet ministers and other government leaders. The coup’s leaders failed to achieve popular support for their actions. Although university students demonstrated in favor of the coup, army and air force units remained loyal to the emperor, who returned to the capital on December 17.

    Outside the Amhara-Tigray heartland, the two areas posing the most consistent problems for Ethiopia’s rulers were Eritrea and the largely Somali-occupied Ogaden and adjacent regions.  The Liberation Struggle in Eritrea Eritrea had been placed under British military administration in 1941 after the Italian surrender. In keeping with a 1950 decision of the UN General Assembly, British military administration ended in September 1952 and was replaced by a new autonomous Eritrean government in federal union with Ethiopia. In 1958, a number of Eritrean exiles had founded the Eritrean Liberation Movement (ELM) in Cairo, under Hamid Idris Awate’s leadership. This organization, however, soon was neutralized. A new faction, the Eritrean Liberation Front (ELF), emerged in 1960.

    On March 5, the government announced a revision of the 1955 constitution—the prime minister henceforth would be responsible to parliament. In late June, a body of men that eventually totaled about 120, none above the rank of major and almost all of whom remained anonymous, organized themselves into a new body called the Coordinating Committee of the Armed Forces, Police, and Territorial Army. This body soon came to be called the Derg (Amharic for “committee” or “council” —see Glossary). They elected Major Mengistu Haile Mariam chairman and Major Atnafu Abate vice chairman, both outspoken proponents of far-reaching change.

  • Cold War and Post Cold War Ethiopia

    The Derg borrowed its ideology from competing Marxist parties, all of which arose from the student movement. One of them, the Ethiopian People’s Revolutionary Party (EPRP), believed so strongly in civilian rule that it undertook urban guerrilla war against the military rulers, and anarchy ensued in the following years. In February 1977 Mengistu seized complete power as chairman and head of state. A series of EPRP attacks against Derg members and their supporters, known as the White Terror, was countered by Mengistu’s Red Terror, a bloody campaign that crushed armed opponents among the EPRP and other groups, as well as members of the civilian populace. As a result of the campaign, which continued into 1978, thousands of Ethiopia’s best-educated and idealistic young people were killed or exiled; in all, as many as 100,000 people were killed, and thousands more were tortured or imprisoned.

    Meanwhile, in May and June 1977, Somalia’s army advanced into the Ogaden. The U.S.S.R. labeled Somalia the aggressor and diverted arms shipments to Ethiopia, where Soviet and allied troops trained and armed a People’s Militia, provided fighting men, and reequipped the army. Mengistu quickly shifted troops to Eritrea, where by year’s end the Eritrean nationalists had been pushed back into mountainous terrain around Nakʾfa. On September 10, 1987, after thirteen years of military rule, the nation officially became the People’s Democratic Republic of Ethiopia (PDRE) under a new constitution providing for a civilian government. The PMAC was abolished, and in June of that year Ethiopians had elected the National Shengo (National Assembly), a parliament. Despite these changes, members of the now-defunct Derg still ran the government but with different titles.

    The Soviet Union changed policies toward its allies among the developing countries in the late 1980s; these changes appeared likely to result in significant reductions in its hitherto extensive support of Ethiopia. By then it was evident that the Soviet-Ethiopian relationship had undergone a fundamental reorientation. The change was partly the result of the new directions in Soviet foreign policy undertaken by Mikhail Gorbachev. This resulted in more economic hardship and the collapse of the military in the face of determined onslaughts by guerrilla forces in the north. The collapse of socialism in general, and in Eastern Europe during the revolutions of 1989, coincided with the Soviet Union stopping aid to Ethiopia altogether in 1990, made the strategic outlook for Mengistu quickly deteriorated.

    In May 1991, EPRDF forces advanced on Addis Ababa and the Soviet Union did not intervene to save the government side. Mengistu fled the country and was granted asylum in Zimbabwe, where he still resides. The 1st multiparty election took place in May 1995, which was won by the EPRDF, and its  leader Meles Zenawi, became Prime Minister. Meles died on 20 August 2012 in Brussels, where he was being treated for an unspecified illness.Deputy Prime Minister Hailemariam Desalegn was appointed as a new prime minister until the 2015 elections, and remained so afterwards with his party in control of every parliamentary seat.

    Soon after, mass protests erupted in Ethiopia’s populous Oromia region – home to the Oromo, Ethiopia’s largest ethno-national group – in 2015 after a master plan was unveiled to expand the boundaries of the capital, Addis Ababa. The Oromo protesters’ first demand, therefore, was to cancel the master plan outright. But their demands quickly grew to include the release of prisoners of conscience and more political and socioeconomic rights for the Oromo, who make up more than 34 percent of the country’s 100 million citizens and have long complained of being marginalized. Angered by an unfulfilled demand to retake control of some of their lands, the Amhara – Ethiopia’s second-largest ethnic group, constituting about 27 percent of the population – launched protests in their region soon thereafter. 

    On February 16, 2018, the government of Ethiopia declared a six-month nationwide state of emergency following the resignation of the former Prime Minister Hailemariam Desalegn. Hailemariam is the first ruler in modern Ethiopian history to step down; previous leaders have died in office or been overthrown. As a result Ethiopia elect its first ever Ethnically Oromo Leaders in all its 3000 or more history.  The New  leader is Dr. Abiy Ahmed, who seems equipped with deep understanding of his surrounding and the world as whole. With his educational and millinery background, Abiy’s ascension to power could be the Turning point for Ethiopia.