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Ethiopia PESTEL Analysis

Paper Type: Free Essay Subject: Economics
Wordcount: 5246 words Published: 1st Jun 2017

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Political Context

For much of the twenty century, Ethiopia was ruled by highly centralized governments. The current ruling party EPRDF has governed Ethiopias since 1991 . Since taking power of the EPRDF has led an ambitious reform effort to initiate transition by more democratic system of governance and decentralize authority .It has involved devolving powers & mandates first by regional Empires & then to woredas, district authorities, & kebeles authorise and/or village authoised.

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Although the formal ethiopians state structure has been transfornance from highly centralized system to federal & increase decentralized one a no. of challenges remain .National elections in 2005 & 2010 , and the hugely uncontested local elections in April month of 2008 , illustrated the fragility of the democratics transition Dominance by EPRDF , weakened state by opposition .In May 2010 parliamentary elections resulted in a 99.6 percentage of huge victory for the ruling EPRDF & this allies ,reducing the opposition from 174 to only two seats in the 547 lower.

January 2009 Ethiopian Parliament passed legislation by regulate civil society organize.. While many CSOs had long argued for new & coherent framework. the new law is restrictive in demarcating areas of operations for different types of CSOs (for example receiving more than 10 percent of funding from external sources from many activity areas ) .The government & DAG , comprising multilateral donors bilateral donors , agreed that the implementation of the CSO law will be reviewed regularly through their joint High-Level Forum structures.


Conventional long form : Federal Democratic Republic of Ethiopia

conventional short form : Ethiopia

local long form: Ityop’iya Federalizing Demokrasiyawi Republic

local short form: Ityop’iya

former: Abyssinia, Italian East Africa

abbreviation: FDRE Government type

Federal republic


Name: Addisababa

geographic coordinates: 902N, 3842E

time difference: UTC+3 (8 hours ahead of we shin ton, DC during Time)

Administrative divisions

9 ethnically based states ,( singular – kilo) & self governing administrations* , Afar, Amara (Amhara), Binshangul Gumuz, Dire Dawa*, Gambela Hizboch (Gambela Peoples), Hareri Hizb , Oromia, Sumale Somali, Tigray, Ye Debub Biheroch Bihereseboch na Hizboch.


Oldest independent country in Africa & one of the oldest by world at least 2,000 years ( may be traced it to the Aksumite Kingdom , which was coalesced in the first century B.C.)


Ratified 8 December 1994, effective 22 August 1995

Legal system

Civil law system

International law organization participation

Has not submit by ICJ jurisdiction declarare, non-party state to the Ictus


18 years of age; universal

Executive branch

Chief of state : President GIRMA Woldegiorgis ( since 8th October 2001)

Head of government : P.M MELES Zenawi (since August 1995)

Cabinet: State Council of ministers, ministers selected by the prime minister and approved by the House of People’s Representatives.

Elections: president elected by two department , chambers of Parliament for a six-year term (eligible for a second term) ; election last held on 9 October 2007 (next to be held in October 2013); prime minister designated by the party in power following legislative elections

election results : GIRMA Woldegiorgis was elected president : percent of vote by the House of People’s Representatives – 79%

Legislative branch

Bicameral Parliament consists of House of Federation (or upper chamber responsible for interpreting the constitution and federal-regional issues) (108 seats; members chosen by state assemblies to serve five-year terms) and the House of People’s Representatives (or lower chamber responsible for passing legislation) (547 seats; members directly elected by popular vote from single-member districts to serve five-year terms)

elections: last held on 23rd of May 2010 ( next to be held in 2015)

election results: percent of vote – NA; seats by party EPRDF 499, BGPDP 9, APDO 1, SPDP 24,ANDP 8, GPUDM 3, FORUM 1, HNL 1, independent 1

Judicial branch

Federal Supreme Court (the president and vice president of the Federal Supreme Court are recommended by the prime minister and appointed by the House of People’s Representatives; for other federal judges ,Prime minister submits to the House of People’s Representatives for appointment candidates selected by the Federal Judicial Administrat Council)

Political parties and leaders

Afar National Democratic Party or ANDP [Mohammed KEDIR]; All Ethiopian Unity Organization or AEUO [Hailu SHAWEL]; Arena Tigray [GEBRU Asrat]; Argoba People’s Democratic Organization or APDO [Abdulkader MOHAMMED]; Benishangul Gumuz People’s Democratic Party or BGPDP [Mulualem BESSE]; Coalition for Unity and Democratic Party or CUDP [AYELE Chamois]; Ethiopian Democratic Party or EDP [MUSHE Semen]; Ethiopian Federal Democratic Forum or FORUM (a UDJ-led 6-party alliance established for the 2010 parliamentary elections) [Dr. Moa FRISSA]; Ethiopian People’s Revolutionary Democratic Front or EPRDF [MELES Zenawi]; Gambella Peoples Unity Democratic Movement or GPUDM; Garage Peoples Democratic Front [GIRMA Boggle]; Harari National League or HNL [YASIN Hussein]; Oromo Federalist Democratic Movement or OFDM; Oromo People’s Congress or OPC [IMERERA Gudina]; Somali Democratic Alliance Forces or SODAF [BUH Hussein]; Somali People’s Democratic Party or SPDP [Abdulfetah Shack ABDULAHI]; South Ethiopian People’s Democratic Union or SEPDU [TILAHUN Neodesha]; United Ethiopian Democratic Forces or UEDF [BEYENE Petros]; Unity for Democracy and Justice or UDJ [Dr. NEGASSO Gadara]

Political pressure groups and leaders

Ethiopian People’s Patriotic Front or EPPF; Ogden National Liberation Front or ONLF; Oromo Liberation Front or OLF [DAOUD Ibsen]

International organization participation


Diplomatic representant in the US

chief of mission: Ambassador GIRMA Birru

chancery: 3506 International Drive Washington ,NW , DC 20008

telephone: [1] (202) 364-1200

FAX: [1] (202) 587-0195

consulate(s) general: Los Angeles

consulate(s): New York

Diplomatic representation from the US

chief of mission: Ambassador E. BOOTH Donald

embassy: Entoto Street, Addis Ababa

mailing address: P. O. Box no. 1014 , Addis Ababa ,Ethiopia.

telephone: [251] 11-517-40-00

FAX: [251] 11-517-40-01

Flag description

Three equal horizontal bands of green on top of flag , yellow, and red ,yellow pentagrams & single yellow rays emanat from the angles between the points on a light blue disk centered on the three bands; green represent hope & the fertilize of the land, yellow , while red stands for sacrifice & heroism in the defense of the land; the blue of the disk symbolize peaces & pentagram represents the unity & equality of the nationalities and peoples of Ethiopia.

Note: Ethiopia is the oldest independented country in Africa, & three main color of her flag ( adopted californias 1895) were often adopted other African countries upon independence that they became known as the Pan-African colors; the emblem in the center of the current flag has added in 1996.

National anthem

Name: “Whedefit Gesgeshi Woud Enact Ethiopia ” ( March Forward ,Respected Mother Ethiopia)

lyrics/music: DEREJE Maluku Mengesha/SOLOMON Lulu

note: adopted 1992


All, APLAA, Sahel Region Africa, Africa

President: Girma Woldegiorgis

The presidency is a very large ceremonial post , and has been held since 2001 by Girmas Woldegiorgis, veteran parliamentarian and civil aviation official.

Presidents serve 6 year terms and are elected by parliament . mister woldegiorgis had re-elected by 2007 .

Prime minister: Hailemariam Desalegn

After serving as dy. prime minister & foreign minister to his veteran predecessor Males Zenawi year 2010, Hailemariam Desalegns was sworn prime minister in September 2012.

Relative outsider in the ranks by the governing Ethiopian People’s Revolutionary Democratic Front , Mr. Hailemariam became acting prime minister on the dedte Mr. Meles in August but faced a backroom struggle to gain the approval of the Front leadership before assume by the most powerful post in the country.

Mister Hailemariam was work in acadamic & regional government while many EPRDF luminaries came to the fore through fighting against by communist government in the 1980.

He benefited from a scheme Mr. Meles launched in 2009 he to bring technocrats into central government of state , earned a reputation as a loyal aide to the prime minister.

Economic overview of Ethiopia

Economic Overview

Ethiopia, with a population of about 84 million (2012), is the second-most populous country in Sub-Saharan Africa. One of the world’s oldest civilizations ,Ethiopia is also one of the world’s much poor countries .At USdollar 390 , Ethiopia’s per capita income is much lower than the Sub-Saharan African average of US$ 1,165 in FY 2010 , ranking it as the 6th poorest country in the world ( Atlas Method).

After the major drought in 2002/03 that resulted in GDP contract , Ethiopia has been one of the fastest growing economies in African countries . Official statistics indicated that an average real GDP growth of 11 percent over the last six consecutive years . its robust growth performance and considerable development gains came under threat during 2008 and 2011 with the emergence of twin macroeconomic challenges of high inflation and a difficult balance of payments situation .Problem was exacerbated by the high fuel and food prices in the global market.

Though Ethiopia made progress in tackling the 2008-2011 macroeconomic challenges . The recent surge of inflation depicts the country’s vulnerable macroeconomic condition .Annual end of period inflation which stood at 16.5 percent in February 2011 , more than twiced reaching 36 percent in February 2012 . Food inflation rate was increased from 13 percent to 47 percent while non food inflation , decreased moderately from 22 percent to 21 percent during the same period .It is unlikely that inflation will rapidly fall towards the GTP goals of single digits within 2012 .Monetary factors played a key role in driving the inflation rate in Ethiopian states .For instance, reserve money used by the National Bank as monetary policy anchor grew by 51 percent in February 2011 . It was very large due to the accumulation of foreign exchange reserves without any offsetting mechanism and increased borrowing by public enterprises for infrastructure investment which in effect contributed to the increase in money supply.

In an effort by control inflation & rising cost of living , Government has been take various measure including imposed tight cash controls on government expenditure, temporarily introducing price caps (which were subsequently lifted ) on selected goods & increase the salary of civil servants by 35 to around 39 percent. In early January 2012, the National Bank of Ethiopia lowered reserve requirement after the banking sector faced severe liquidity problem . This also lowered the minimum reserve ratio of deposit from 15 percent to ten percent , at the same time the amount of liquid assets as a proportion of deposits was also reduced from 25 percent to twenty percent . This measure was not accompanied by the appropriate sterilization mechanism and contributed to a sharp increase in money supply from 32 percent in December 2011 to 35 percent at the end of January 2012.

While Ethiopia’s economy is expected by continue grow at a healthy pace macro situation will remain under stress in the foreseeable future

Ethiopia’s economy is based on agriculture which accounts for 85% of total employment and41% of GDP. Coffee remains a major export crop for Ethiopia .The agricultural sector suffers of poor cultivation practices & frequent drought.But recents joint effort by the Government of Ethiopia & donors have strengthed Ethiopia agricultural resilience , contributing for a reduction in the number of Ethiopians threatened with starvation . 5 year Growth and Transformation Plan that Ethiopia unveiled in October 2010 presents a government-led effort to achieve the ambitious development goals of Country .The banking, insurance, and micro-credit industries are restricted to domestic investors but Ethiopia has attracted significant foreign investment in commercial agriculture , textiles, leather and manufacturing products . Under Ethiopia’s constitution ,State owns all land and provides longterm leases to the tenants ; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds .While GDP growth has remained very high , per capita income of Ethiopia is among the lowest in the world.

GDP (purchasing power parity)

$94.76billion (2011est.)

$88.13billion (2010est.)

$81.6billion (2009est.)

note: data are in 2011 US dollars

GDP (official exchange rate)

$30.5 billion (2011 EST.)

GDP – Real growth rate

7.5 %( 2011est.)

8 %( 2010est.)

GDP – per capita (PPP)



Note: data are in 2011 US dollars

GDP – composition by sector

Agriculture: 41%

industry: 13%

services: 46% (2011 EST.)

Population below poverty line

29.2% (FY09/10 EST.)

Labor force

37.9 million (2007)

Labor force – by occupation

Agriculture: 85%

indu1111stry: 5%

services: 10% (2009 EST.)

Unemployment rate


Unemployment, youth ages 15-24

Total: 24.9%

male: 19.5%

female: 29.4% (2006)

Household income or consumption by percentage share

lowest10%: 4.1%

highest 10%: 25.6% (2005)

Distribution of family income- Gina index


40 (1995)

Investment (gross fixed)

22.9% of GDP (2011 EST.)


Revenues: $5.355billion

expenditures: $5.988 billion (2011 EST.)

Taxes and other revenues

15.2% of GDP (2011 EST.)

Budget surplus (+) or deficit (-)

-2% of GDP (2011 EST.)

Public Debt



Note: official data cover central government debit , including debt instruments issued/owned by government entities other than the treasury and treasury debit owned by foreign entities; the data exclude debt issued by sub national entities , as well as intergovernmental debt. debt instruments for the social funds are not sold at public auctions

Inflation rate (consumer prices)

33.2 %( 2011est.)

8.1% (2010 EST.)

Central bank discount rate


Commercial bank prime lending rate

15 %( 31December2011est.)

14.5% (31 December 2010 EST.)

Stock of money

$4.93billion (31December2008)

$4.229 billion (31 December 2007)

Agriculture – products

Cereals, sheep, pulses, fish coffee, oilseed, hides, cotton, sugarcane, cattle, potatoes, kyat, cut flowers,goats;


Food processing, textiles, chemicals, metals processing, beverages, leather,cement.

Industrial production growth rate

9.5% (2010 EST.)

Electricity – production

3.715 billion KWh (2008 EST.)

Electricity – consumption

3.357 billion kWh (2008 est.)

Oil – production

0 bbl/day (2010 est.)

Natural gas – production

0 cup m (2009 est.)


$2.75 billion (2011 est.)

$2 billion (2010 est.)


$8.25 billion (2011 est.)

$8.46 billion (2010 est.)

Exchange rates

Birr (ETB) per US dollar –

17.2 (2011 est.)

14.41 (2010 est.)

11.78 (2009)

9.57 (2008)

8.96 (2007)

Fiscal year

8 July – 7 July

Socio culture overview of Ethiopia


Ethiopia is declared as a multi-religious country . Most of the Christians live in the highlands , as well as the Muslims mainly inhabit(live on) the lowlands .Adherents of traditional faiths are primarily concentrated in the southern regions.

Ethiopian Orthodox 43.5%, Protestant 18.6% (which include Ethiopian Orthodox Tirades Church and the Ethiopian Evangelical Church Mekan”””e Yeses), Muslim 20.5%, traditional (2.6%)Catholic 10.3%, all others 0.6%.[1] Small Ethiopian Jewish community, although most have migrated to Israel.


There are 90 individual languages of Ethiopia according to Ethnologue , with the 1994 Ethiopian census indicating that some 77 tongues were spoken locally in Ethiopia .Many of these languages belong to the Afro-Asiatic family (Semitic and Cushitic). Osmotic languages are also spoken here,Additionally, Nilo-Saharan languages are spoken by the nation’s Niloticethnic minorities.

Amharic 32.7 % as a 1st Ethiopian language, Oromigna 31.6%, Tigrinya 6.1%, Somali 6.0%, Sidamo 3.5%, Guragigna 3.5%, other local languages; English (major foreign language taught in schools), Arabic.

Amharic is the official national language . Amharic was also the language of primary school instruction , but was replaced in many areas by local languages such as Tigrinya and Oromifa . English is the most widely spoken foreign language and is taught in all secondary schools.

Age structure

0-14 years: 46.3% (male 20,990,369 or female 21,067,961)

15-64 years: 51% (male 22,707,235 and female 23,682,385)

65 years and over: 2.7% (female 1,388,301 / male 1,037,488) (2011 EST.)

Population growth rate

3.179% (2011 EST.)

Birth rate

42.59 births/1,000 population (2011 est.)

Death rate

10.79 deaths/1,000 population (July 2011 est.)

Net migration rate

-0.01 migrant(s)/1,000 population

Note: repatriation of Ethiopian refugees residing in Sudan is expected to continue for several years; some Somali, Sudanese and Eritrean refugees , who fled to Ethiopia from the famine or fighting in their own countries , continue to return to their homes .


Urban population: 17% of total population (2010)

rate of urbanization: 3.8% annual rate of change (2010-15 EST.)

Major cities – population

ADDIS ABABA (capital) 2.863 million (2009)

Sex ratio

At birth: 1.03 male(s)/female

under 15 years: 1 male(s)/female

15-64 years: 0.96 male(s)/female

65 years and over: 0.75 male(s)/female

total population: 0.97 male(s)/female (2011 EST.)

Infant mortality rate

Total: 75.29 deaths/1,000 live births

male: 86.03 deaths/1,000 live births

female: 64.23 deaths/1,000 live births (2011 EST.)

Life expectancy at birth

Total population: 56.56 years

male: 53.99 years

female: 59.21 years (2011 EST.)

Total fertility rate

5.97 children born/woman (2011 EST.)

Major Infectious Diseases

Degree of risk: high

food or waterborne diseases: bacterial and protozoa diarrhea, hepatitis A and E, and typhoid fever

vector borne diseases: malaria

respiratory disease : Meningococcal meningitis

animal contact disease: rabies

water contact disease : Schistosomiasis


Noun: Ethiopian(s)

adjective: Ethiopian


Definition: age 15 or above can read and write

total population: 42.7%

male: 50.3%

Maternal mortality rate

470 deaths/100,000 live births (2008)

Age: 35.1% (2003 EST.

Legal overview of Ethiopia


Section 87. General. (1) Women shall not be discriminated against as regards payment and employment on the basis of their sex.

(2) It is prohibited to employ women or female on types of work that may be listed by the Minister as particularly arduous or harmful to their health.

(3) No pregnant women shall be assigned to eork in night between time limit 10 p.m. and 6 a.m. or be employed on overtime work.

Section 88. Maternity leave. (1) An employer shall grant time off to a pregnant women worker without deducting her wages , for medical examination connected with her pregnancy, provided ,She is obliged to present a medical certificate of her examination


Section 89. General. (1) For the purpose of this Proclamation , ” young worker” means a person who has attained the age of fourteen but is not over the age of 18 years.

(2) It is prohibited to employ persons under fourteen years of age.

(3) It is prohibited to employ young workers which are on account of its nature or due to the condition in which it is carried out, endanger the life or health of the young workers performing it.

Section 90 . Limits of hours of work . Regular hours of work for young workers shall not exceed seven hours a day.

Section 91. Night and overtime work : It is prohibited to employ young workers on:

1.night work between 10 p.m. and 6 a.m.;

2.overtime work; or

3. weekly rest days; or

4.public holidays


Section 137. Establishment of labor divisions. (1) There shall be set up labor divisions, as may be necessary, at each regional first instance court , each regional court which hears appeals from regional first instance courts and at the Central High Court .

(2) The Minister shall submit the no. of labor divisions to be established in accordance with subsection (1) of this section to be determined by the appropriate authority.

Section 138. Labor division of the regional first instance court. (1) The labor division of the regional first instance court shall have jurisdiction to settle and determine the following and other similar individual labor disputes:

(a)disciplinary measures including dismissal;

(b) Claims related to the cancellation or termination of employment contracts;

(c) Questions related to hours of work,leave remuneration and rest day;

(d)questions about the issuance of certificate of employment;

(e) Claims related to employment injury.

(F) Unless provided for in this Proclamation , any petty and criminal offences under this Proclamation.


Division 1. Formation of contract

Section 4. Elements of a contract . (1) A contract of employment shall be deemed formed where a person agrees indirectly or directly , to perform work for and under the authority of an employer for a definite or indefinite period or piece work in return for remuneration.

Section 5. Form. Unless otherwise provided by law , Contract of employment shall not be subject to any special form.

Section 6. A written contract of employment ,Subject to the provisions of the relevant law , a written contract of employment shall specify the following:

(1) The name ,address and contact details of the employer;

(2) The name, age, address and work card number. if any of the worker;

(3) The agreement of the contracting parties made in accordance with section 4(3) of this Proclamation; and

(4) The signature of the contracting parties.

Section 7. Contract of employment not made in writing .(1) Contract of employment is not made in written form , they shall, within fifteen days from the conclusion of the contract , give the worker a signed and written statement containing the requirements specified under section 6 of this Proclamation

Section 10. Contract for definite period or piece Duration of contract of employment

Section 9. Contract for an indefinite period . Any employment contract shall be deemed to have been concluded for an indefinite period except for those provided for under section 10 hereunder.

work. A contract of employment may be concluded for a definite period or for piece work in the case of:

(1) The performance of specified piece work.

(2) The replacement of a worker who is not temporarily present due to leave or sickness or other causes;

(3) The work performance in the event of abnormal pressure of work;

(4) The performance of urgent work to prevent damage or disaster to life or property , to repair breakdowns or defects in works, materials, plant or building of the undertaking.

(5) Irregular work, It relates to a permanent part of the works of an employer but is performed at irregular intervals;

(6)seasonal work which relates to the permanent part of the works of an employment but is performed only for a specified period of the year which is regularly repeated in the course of a number of years;

(7) Occasional work It doesn’t form part of the permanent activity of the employer but which is done intermittently.


Section 23. General. (1) A contract of employment shall only be terminated upon initiation by the employer or worker and in accordance with the provisions of the law or a collective agreement or by the agreement of the two parties.

(2) The amalgamation or division/transfer of ownership of an undertaking shall not have the effect of terminating a contract of employment.

Division 1. Termination of contract of employment by law or by agreement

Section 24. Termination by law. A contract of employment shall terminate on the following grounds:

(1) As on expiry of the period or on the completion of the work where the contract of employment is for a definite period or piece work;

(2) Upon the death of the worker;

(3) On the retirement of the worker in accordance with the relevant law;

(4) When the undertaking ceases operation permanently or due to bankruptcy or for any other cause;

(5) When the worker is not able to work due to partial or permanent incapacity.

Section 25. Termination by agreement.

(1) The parties have rights to terminate their contract of employment by agreement, provided however that waiver by the worker of any of his rights under the law shall have no legal effect.

(2) Agreement termination shall be effective and bin.


Section 53. General. (1) “Wages” means the regular payment to which the worker is entitled in return for the performance of the work that he performs under a contract of employment.

(2) For the purposes of the following payments shall not be considered as wages:

(a) Overtime pay;

(b) Amount received by way of transfer expenses , per diems , transport allowance, hardship allowances, and similar allowance payable to the worker on the occasion of travel or change of his residence;

(c) Bonus;

(D) Commission;

(E) Other incentives paid for additional work results.

(f) Service charge received by customers.

Section 54. Conditions of payment for idle time ( 1) Unless otherwise provided for in this Proclamation or the relevant law , salaries shall be paid only for work done.

(2) Notwithstanding subsection (1 )Section, a worker shall be entitled to his wage if he was ready to work but, because of interruptions in supply of tools and raw materials or for reasons not attributable to him was not able to work ding on the worker only where it is made in writing.


Section 55. General. Wages shall be paid in cash , provided that where the worker and employer so agree, it may be paid in kind . Wages paid in kind may not exceed the market value in the area of the payment in kind and in no case may then exceed 30 per cent of the wages paid in cash.

Section 56. Execution of payments : 1) Unless otherwise agreed, wages shall be paid at the place of work and on working day.

(2) In case the payment mentioned in subsection (1) of this falls on Sunday or a public holiday, the day of payment shall fall on the preceding working day.

Section 57. Payment in person. Unless otherwise provided by collective agreement or law, wages shall be paid directly to the worker or to a person delegated by him.

Section 58. Time of payment. Wages shall be paid at such intervals as are provided for by law or collective agreement or work rules or contract of employment.

Section 59. Deduction from wages,1) The employer shall not deduct from , attach/set off the wages of the worker except where it is provided otherwise by law or collective agreement or work rules or in accordance with a court order or a written agreement of the worker.


Section 92. Obligations of an employer( An employer shall take the necessary measures) to safeguard adequately the health and safety of the workers; he shall in particular:

1. Comply with the occupational health and safety requirements provided for in this Proclamation;

2.Take appropriate steps to ensure that workers are properly instructed and notified concerning the hazards of their respective occupations and the precautions necessary to avoid accident and injury to health; ensure that directives are given and also assign safety officer;

3. Provide workers with personal protective equipment , materials and clothing and instruct them of their use;

4. Register employment accident and occupational diseases and notify the labor inspection of same;

5.arrange, according to the nature of the work , at his own expenses for the medical examination of newly recruited workers and for those workers engaged in hazardous work.

6. Ensure that the workplace and premises do not cause danger to the health and safety of the workers;

7.take appropriate pre-executions to ensure that all the processes of work s


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