Ethiopia is located in the Horn of Africa and is bordered on the north and north-east by Eritrea, on the east by Djibouti and Somalia, on the south by Kenya, and on the west and south-west by Sudan. The country has a high central plateau that ranges from 1,800 m to 3,000 m (6,000 ft-10,000 ft) above sea level, with some mountains reaching 4,620 m (15,158 ft). Elevation is generally highest just before the point of descent to the Great Rift Valley, which splits the plateau diagonally. A number of rivers cross the plateau, the largest being the Blue Nile flowing from Lake Tana. The plateau gradually slopes to the lowlands of the Sudan on the west and the Somali-inhabited plains to the south-east.

 

The climate is temperate on the plateau and hot in the lowlands. At Addis Ababa, which ranges from 2,200 m to 2,600 m (7,000 ft-8,500 ft), maximum temperature is 26 degrees Celsius (80 degrees Farenheit) and minimum 4 degrees Celsius (40 degrees Farenheit). The weather is usually sunny and dry with the short ("belg") rains occurring February-April and the substantial ("meher") rains beginning in mid-June and ending in mid-September.

Country statistics

Population: 85,237,338 (July 2009 est.)                         

Area: 1,104,300 sq km                                   

Population growth rate: 3.208% (2009 est.)

Nationality: Ethiopian

Ethnic groups: Oromo 32.1%, Amara 30.1%, Tigraway 6.2%, Somalie 5.9%,  Guragie 4.3%, Sidama 3.5%, Welaita 2.4%, other 15.4% (1994 census).

Religions: Christian 60.8% (Orthodox 50.6%, Protestant 10.2%),Muslim 32.8%, traditional 4.6%, other 1.8% (1994 census).

Languages: Amarigna 32.7%, Oromigna 31.6%, Tigrigna 6.1%, Somaligna 6%, Guaragigna 3.5%, Sidamigna 3.5%, Hadiyigna 1.7%, other 14.8%, English (major foreign language taught in schools) (1994 census)

GDP (official ex. rate): US$ 25.08 billion (2008 est.)

GDP- by sector: Agriculture 80.2%; industry: 6.6%; services: 13.2% (2005)

Politics

Ethiopia is a federal republic under the 1994 constitution. The executive branch includes a President, Council of State, and Council of Ministers. Executive power resides with the prime minister. There is a bicameral parliament; national legislative elections were held in 2005. The judicial branch comprises federal and regional courts.

Political parties include the Ethiopian People's Revolutionary Democratic Front (EPRDF), the Coalition for Unity and Democracy (CUD), the United Ethiopian Democratic Forces (UEDF), and other small parties. Suffrage is universal at age 18. The EPRDF-led government of Prime Minister Meles Zenawi has promoted a policy of ethnic federalism, devolving significant powers to regional, ethnically based authorities. Ethiopia today has nine semi-autonomous administrative regions and two special city administrations (Addis Ababa and Dire Dawa), which have the power to raise their own revenues. Under the present government, Ethiopians enjoy wider, albeit circumscribed, political freedom than ever before in Ethiopia’s history.

Economy

Ethiopia's economy is based on agriculture, accounting for 60% of exports and 80% of total employment. Coffee is critical to the Ethiopian economy with exports of some US$ 350 million in 2006, but historically low prices have seen many farmers switching to alternative crops to supplement income. The war with Eritrea in 1998-2000 and recurrent drought have buffeted the economy, in particular coffee production. In November 2001, Ethiopia qualified for debt relief from the Highly Indebted Poor Countries (HIPC) initiative, and in December 2005 the IMF forgave Ethiopia's debt. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; the system continues to hamper growth in the industrial sector as entrepreneurs are unable to use land as collateral for loans. Drought struck again late in 2002, leading to a 3.3% decline in GDP in 2003. Normal weather patterns helped agricultural and GDP growth recover during 2004-08, and GDP is continuing to improve during 2009.

 

Jurisdiction

Investment Framework:

• Ethiopia’s emerging economy is dynamic and welcoming to foreign investment
• Exemption from custom duties and taxes on equipment
• machinery, vehicles and spare parts with carry forward on losses for 10 years
• Corporate tax 35% plus 2 ‐5% royalty on minerals
• Guarantees for foreign direct investment include full repatriation of capital and profits

Mining: 

Ethiopia’s mineral resources’ potential is high, with known occurences of gold and potash, and a geological setting that indicates a high potential for the discovery of zinc and copper.  Exploration and mining activities in Ethiopia are governed by Mining Proclamation No. 182/1994 and subsequent amendments.  The terms and conditions are similar to those in a number of African countries and easy to understand and apply.  The incoming party is entitled to secure the rights to 100% of the mineral rights of a specified area (allowing for the government to have an option to take a 2% equity holding).  Surface rights must be negotiated with surface mineral owners, although rights of access and occupation are written in the law.  The fiscal conditions in Ethiopia are reasonably conducive to encouraging investment with a 35% company tax.

The code protects the rights of the larger-scale operators to secure mining titles to their exploration areas, while giving the rights to locals to carry out artisanal operations. Initial prospecting can be carried out under the terms of an Exclusive Prospecting Licence (EPL), which gives the holder exclusive rights to the area concerned for a term of one year and thereafter gives the incumbent the right to apply for an Exclusive Exploration Licence (EEL), using the same modified area.  An EEL is valid for an initial term of three years and may be renewed for two terms of one year each, providing the commitments to an exploration programme and expenditure are met and regular reporting is maintained.  Applications for extensions beyond this five year term would be dependent upon the amount of work undertaken and the commitment to ongoing work and expenditure commitments.

The Licensee has the right to assign or transfer rights to a third party.  The Licensee also has the right to apply for either a small-scale Mining Licence (10 year term renewable for a further 10 years) or a large-scale Mining Licence (20 year term renewable for a further 5 years).  Whereas exploration and mining rights may be granted to any new applicant for a relinquished prospecting area, the law specifically refers to the right of the original permit holder in respect of future applications for higher licences, provided that work and expenditure commitments have been fulfilled.

The only industrial-scale gold mine in Ethiopia is Legadembi operated by MIDROC Ethiopia (MIDROC), a Saudi-controlled company.  This is located 500 km south of the capital, Addis Ababa, and in another block of Basement rocks separated from the north by the East African Rift Valley. MIDROC acquired the mine from the Ethiopia government in 1997 for US$ 172 million. Since then, according to an article in Mining Africa Review 2006, it has spent "millions" to enhance capacity.  The mine has been producing on average 113,000 oz per year in the period 2000 to 2005 but no costs for production have been released.

 

Transport

Over the past decade, Ethiopia’s transport sector has undergone rapid expansion. As part of a 10-year Road Sector Development Program, between 1997 and 2007 the Ethiopian government began a sustained effort to improve and upgrade its roads infrastructure. As a result, as of 2002 Ethiopia has a total (Federal and Regional) of 33,297 km of roads, both paved and gravel. In addition, the government-owned airline’s reputation is excellent - Ethiopian Airlines serves 38 domestic airfields and has 42 international destinations.