COUNTRY PROFILE
Discover more about the Ethiopia market. Events, resources, and more are linked throughout the profile.
118 million
Ethiopia’s population exceeds 118 million people.
2nd
largest population in Africa, after Nigeria.
$20 million
In 2024, U.S. processed food exports to Ethiopia reached US$20 million
Focus Economics reports that Ethiopia has been one of the fastest-growing economies globally over the past two decades, with annual Gross Domestic Product (GDP) growth averaging around 8%–10%. The government’s state-led development model has prioritized infrastructure, industrialization, and agricultural modernization. However, recent years have seen economic turbulence due to political instability, the Tigray conflict, and foreign exchange shortages. According to Euromonitor, GDP growth was 6.5% in 2023 and rose to 6.8% in 2024. The GDP forecast in Ethiopia for 2025 is 7.1%.
Political instability and debt burden: Ethiopia’s rapid economic growth has been tempered by political unrest and a rising debt burden. The Tigray war and ethnic conflicts have disrupted trade and investment, while high government spending on infrastructure has led to mounting public debt. The country faces severe foreign exchange shortages, making imports more expensive and constraining business operations. Inflation remains elevated, further straining consumer purchasing power.
Ethiopia’s economic growth is expected to recover as political stability improves. The government’s shift towards economic liberalization, including privatization of key sectors like telecoms and banking, could attract foreign capital. However, reducing macroeconomic imbalances, improving governance, and strengthening institutions will be critical for long-term stability. Ethiopia has strong economic potential, but realizes it depends on sustaining reforms and ensuring peace.
U.S. processed food exports to Ethiopia reached US$83.8 million in 2023, ranking it second after South Africa in Sub-Saharan Africa. That represented growth of 62% from the prior year and a new all-time high. In 2024, U.S. processed food exports to Ethiopia dropped an equally staggering 81% to US$20 million.
Top U.S. processed food exports to Ethiopia in 2024 included:
$7.7 billion
projected retail sales of packaged food in Ethiopia by 2024
90%
Over 90% of Ethiopia’s food retailers are independent grocers.
$21.8 billion
projected retail sales of packaged food in Ethiopia by 2029
According to Euromonitor, retail sales of packaged food in Ethiopia are forecast to reach just over US$7.7 billion in 2024. By 2029, Euromonitor forecasts that retail sales of packaged food in Ethiopia will reach nearly US$21.8 billion.
High-growth products in the forecast include:
Euromonitor reports that in more affluent neighborhoods, supermarkets are relatively common. Supermarkets and hypermarkets are growing in importance due to the expansion of the country’s middle class. These outlets are popular due to the much wider ranges of products they offer in most categories and their more hygienic image, as well as the fact that they usually have the equipment for storing and displaying perishable items such as dairy and frozen processed food.
According to Euromonitor, about 94% of grocery retailing is done by independent grocers, especially outside of the metropolitan areas. Most distribution in Ethiopia, particularly to regional towns, is conducted through informal business arrangements. For example, after being cleared through customs, many goods will be sold to wholesalers in Addis Ababa’s (and Africa’s) largest open market (Merkato) and then distributed to retailers and small vendors.
Ethiopia requires that all imports be channeled through Ethiopian nationals registered with the Ministry of Trade and Industry (MOTI) as official importers or distribution agents. The importer or agent is required to apply for an import license and register with the MOTI as well as the National Bank of Ethiopia (NBE) for a foreign exchange permit.
Access to foreign exchange is the leading obstacle faced by Ethiopian importers seeking to source goods and services from the international market. Importers often wait for months to open a letter of credit for imports and receive an allocation of U.S. dollars due to an acute scarcity of foreign exchange. Companies working in “prioritized” sectors, including manufacturing, agro-processing, and pharmaceuticals, may receive preferential access to foreign currency.