More information about Ethiopia is available on the Ethiopia Page and from other Department of State publications and other sources listed at the end of this fact sheet.
The United States first established diplomatic relations with Ethiopia in 1903, and has maintained them ever since, despite changing forms of government. The current government was established in May 1991 when a coalition of guerrilla groups seized control of the capital city Addis Ababa after 17 years of a Marxist military dictatorship known as the Derg. This coalition, the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), spearheaded by ethnic Tigrayans, established a federally organized state, with regions based on the ethnicity of the population, a system known as ethnic federalism. The country today is officially known as the Federal Democratic Republic of Ethiopia. The official founding ideology of the government was “developmental democracy,” a model that prioritized economic development over political rights. In April 2018, after violent protests in Oromia and Amhara regions, the EPRDF named Abiy Ahmed prime minister, becoming the first leader of Oromo descent. In his first few months, Prime Minister Abiy Ahmed released thousands of prisoners, allowed exiled dissidents to return, unblocked hundreds of media outlets, and improved relations with Eritrea. In December 2019, the Prime Minister disintegrated the EPRDF and created the Prosperity Party to promote inclusion, economic growth, and development.
The diplomatic relationship between the United States and Ethiopia is important, complex and focused on four broad goals: (1) protecting American citizens, (2) strengthening democratic institutions and expanding human rights, (3) spurring broad-based economic growth and promoting development, and (4) advancing regional peace and security.
U.S. Assistance to Ethiopia
As the second most populous country in Africa, Ethiopia is one of U.S. government’s largest and most complex assistance programs. The U.S. is the largest bilateral contributor to humanitarian needs and provides an annual average of over half a billion dollars for that purpose alone. In 2019, an estimated 8.2 million people in Ethiopia required emergency assistance, and 8 million Ethiopians are chronically food insecure and receive support from the Government of Ethiopia’s (GOE) safety net program.
In addition to humanitarian assistance, U.S. development assistance works to promote democratic, citizen-responsive governance, and broad-based economic growth and prosperity. As the country undertakes pivotal economic and political reforms, U.S. support helps expand the role of civil society, media, improve access to justice, and provide training to protect civic space and electoral processes ahead of the 2020 elections.
Ethiopia is among the most effective U.S. development partners on the continent, particularly in the areas of health care, education, and food security. This partnership helps to improve the capacity of Ethiopians to deliver basic services and promote an environment conducive to improved food security and resilience. In an economy where agriculture accounts for 90 percent of exports and 40 percent of GDP, the U.S. invests in high-potential crop and livestock value chains, nutritional activities, and resilience to target chronically food insecure households and pastoral lowland communities.
Climate change, drought, conflict, and land tenure disputes continue to threaten economic growth, stability, and food security in Ethiopia. The U.S. helps government institutions and local communities prepare for, and adapt, to crises by investing in local and early warning systems. This also helps the Government of Ethiopia facilitate preparedness, response, and recovery from large-scale emergencies and disasters by reducing dependence on donors.
Ethiopia hosts more than 720,000 refugees, the third largest number in Africa. U.S. support for refugees in Ethiopia, totaling $94.4 million in FY 2019, is crucial to maintain Ethiopia’s internal stability and supporting the region.
Bilateral Economic Relations
Ethiopia ranks among the fastest growing economies in the world – Ethiopia’s GDP per capita increased from $162 in 2005 to $790 in 2018, an average annual growth rate of more than 14 percent. The World Bank estimates Ethiopia GDP growth rate will be 8.5% in 2019. However, inflation rose to double-digit levels in the final quarter of 2017 and by the spring of 2019, it reached 12.9 percent.
Ethiopia’s goal is to reach lower-middle income status by 2025 through sustained economic growth. The state is heavily engaged in the economy and Ethiopia’s growth has been largely driven by state-run infrastructure development. Debt load is a concern, the IMF’s ratings for Ethiopia changed from moderate to “high risk of debt distress” in May 2018. Key sectors are state-owned, including telecommunications, financial services, aviation, logistics, railways and power distribution.
On June 5, 2018, Ethiopia’s ruling party announced that state-owned enterprises, including the railway and the sugar corporation, will be partially privatized while Ethiopian state-owned monopolies in the sectors of aviation, telecommunications, and logistics will be opened to the private sector through the sale of minority shares. The Homegrown Economic Reform Plan advocates an increased role for the private sector, and Ethiopia is systematically addressing bureaucratic bottlenecks in an effort to improve its ranking on the World Bank’s Ease of Doing Business Index. There are growing opportunities for U.S. trade and investment, particularly in manufacturing, energy, and agricultural processing.
The U.S. embassy engages with the Ethiopian government to improve the business climate, create a level playing field for all investors, and to foster an entrepreneurship culture. Ethiopia is currently our 82nd largest goods trading partner with $1.8 billion in total (two-way) goods trade during 2018. Goods exports totaled $1.3 billion; goods imports totaled $445 million. The U.S. goods trade surplus with Ethiopia was $863 million in 2018, a 47.4% increase over 2017.
Ethiopia is eligible for preferential trade benefits under the African Growth and Opportunity Act (AGOA). U.S. exports to Ethiopia include aircraft, wheat, machinery, low-value shipments and repaired products, and vegetables. U.S. imports from Ethiopia include coffee, oil seeds, textiles and garments. The United States has signed a trade and investment framework agreement with the Common Market for Eastern and Southern Africa, of which Ethiopia is a member.
Ethiopia’s Membership in International Organizations
Ethiopia and the United States belong to a number of the same international organizations, including the United Nations, International Monetary Fund, and World Bank. Ethiopia is an observer to the World Trade Organization. Ethiopia is currently serving on the UN Security Council as a non-permanent member until December 2018.
The position of U.S. Ambassador to Ethiopia is currently held by Ambassador Michael Raynor; other principal embassy officials are listed in the Department’s Key Officers List.
More information about Ethiopia is available from the Department of State and other sources, some of which are listed here: