Unit-5

5.1 MAJOR ECONOMIC ACTIVITIES IN ETHIOPIA

Economic activity is the production, distribution. and exchange of goods and services. Some examples of
these activities are hunting, fishing, farming, grazing, mining, manufacturing, transportation, trade and
others.

Classification of Economic Activities

The economic activities practiced in the world are grouped into five, namely

 primary
 secondary
 tertiary
 quaternary and
 quinary.

A. Primary Economic Activities

 Focus directly on the extraction of resources from the environment.

 Involve the production of foodstuffs and raw materials.
 Occur at the beginning of the production cycle, where people live in close contact with the
resources of the earth.
 A few examples of primary economic activities include:
 agriculture,
 fishing,
 forestry, and mining
 All of these jobs are dependent upon the natural resources of the earth
 The characteristics of primary economy
 dependent on the natural environment;
 related to the production of foodstuffs and raw materials
 influenced by the condition of the physical environment in one way or another

1. Agriculture

 Agriculture is the science and art of cultivation of the soil and the rearing of livestock for either
local consumption or commercial purposes.
 In Ethiopia, agriculture is an old economic activity, which has been practiced since 4000 BC.
 Thus, Ethiopia is mentioned as one of the original centers of the world’s most important
cultivated crops.
 In Ethiopia, most agricultural production takes place in the Dega and Weyna-Dega zones, where
land productivity has traditionally coincided with the densest rural population.
 Types of agriculture in Ethiopia can be divided into two broad types namely:
 crop production and Livestock rising.
I. Crop Production/Arable Farming:
 The process of cultivation of plants to yield food, feed, and fiber or to provide medicinal or
industrial ingredients, or grow ornamental products.
 Arable farming practices, in Ethiopia can be classified into the following types:

A) Seed (Grain) Production

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  In Ethiopia, in areas of Weina-Dega and Dega zones on northwestern highlands and parts
of Southeastern highlands, seed farming is a common activity.
 Seed/grain production mainly include
 cereals,
 pulses and
 oilseeds)
 The principal cereal crops are: teff, barley, wheat, maize, sorghum, millet, and oats.
 Pulses include horse beans, chickpeas, haricot beans, field peas, lentils and vetch.
 Oilseeds include oilniger, linseed, fenugreek, rapeseed, sunflower groundnuts, and
sesame.

b) Permanent (Perennial) Crop Cultivation

Perennial crops like enset, coffee, cotton, etc. are major crops in the WoinaDega areas of southern and
southwestern parts of the country. Enset is the staple food of the people of these areas.

c) Shifting Cultivation

 The cut-and- burn cultivation system.

 In Ethiopia, it practiced in western and southwestern fringes of highlands and lowlands or
Benishangul-Gumuz, Gambella and Southern Regions where population density is low and
livestock rearing is limited areas.

d) Plantation Agriculture

 In Ethiopia, produces mostly cash or industrial crops

 Like sugarcane, cotton, coffee, tea, and rubber.
 Such agricultural systems are found in areas either where there is abundant rainfall or irrigation is
possible.

II. Livestock Rising

 The term livestock includes

 All animals that are kept on the farm to provide food, power, raw
materials for market.
 Ethiopia has a large livestock population that includes cattle, goats, sheep, Camels, poultry, and
packed animals. In cattle population, Ethiopia stands first in Africa and tenth in the World.
 The Livestock sector is an important subsector of the nation’s economy and supports both the
agricultural income and the Growth of Domestic Production.

2. Forestry

A forest is a mass of plants or a wooded area in which trees are the most common features. The extraction
of forest products for different purposes by people is called forestry.

 Economic Significance of Ethiopian Forest

Most of the trees cut in Ethiopia today are used for domestic purposes like for:

 Fuel wood
 Timber household furniture
 For building and construction.
 Earning foreign exchange,

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  Their contribution to the national economy in the form of GDP is
about 6.10%.

3. Fishery

 Concerned with the catching and harvesting of fish, other marine creatures.
 Most fishing activities in Ethiopia take place in freshwater, such as rivers, lakes and ponds.
 In general, the Ethiopian fishing grounds could be classified as Lakes and Rivers

4. Mining

 Concerned with the extraction of mineral bearing substances from the earth’s crust.
 Mining is important to the economy of Ethiopia. Currently, mining contributes to only 1.5 % of
GDP

B. Secondary Economic activities

 Include
 Manufacturing,
 Construction and
 Power production.
 Manufacturing activities take place in factories. It is the activity, which turns raw materials into
products by using labor, energy, and equipment, while industry refers to the place where
manufacturing takes place.
 Activities associated with the secondary sector include metalworking and smelting, automobile
production, textile production, chemical and engineering industries, aerospace manufacturing,
energy utilities, engineering, breweries and bottlers, construction and shipbuilding.

Types of Manufacturing Industries in Ethiopia

 Manufacturing industries in Ethiopia can be classified into two. These are:

 Cottage (traditional) industries
 Modern Manufacturing
industries
A) Cottage (Traditional) Industries
 Include weaving, wood carving, pottery, metal works, basketry, etc.
 The cottage industries of Ethiopia have existed with little changes and refinement throughout
history.
 The major factor that hindered their development was the negative traditional outlooks towards
these activities. Hence people engaged in such activities had, in some instance, low social status.
Still, this low status has not been done away with entirely

b) Modern Manufacturing Industries

Ethiopia’s modern manufacturing sector is at low level. Ethiopia’s modern manufacturing consists of
largely light industries which produce consumer goods.

C. Tertiary Economic Activities

 The tertiary economic activity is the provision of services.

 It involves the provision of services to other businesses as well as to the final consumers.
 It includes legal services, medical services, trade, transportation services, tourism, etc.

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D. Quaternary Economic Activities

 An advanced form of service activity involving specialized knowledge, technical skills,

communication ability, or administrative competence.
 These activities include research, financial services, and government activities.
 These are the activities performed in office buildings, elementary and university classrooms,
hospitals and doctors’ offices, theatres and television stations.
 They are activities primarily concentrated in large urban places and require higher levels of
education than the other sectors.
 This section also includes other pure services, such as the entertainment industry.

E. Quinary Economic Activities

 It is sub-set of quaternary activities and is those that involve high-level decision-making and
scientific research skills.
 It is also a sub-division of the tertiary sector representing the special and highly paid skills of
top business executives, government officials, research scientists, financial and legal consultants,
and the like.
 These people find their places of business in major metropolitan centers, in and near major
universities and research centers.

5.2 CONTRIBUTION OF SUBSISTENCE FARMING AND CASH CROP TO THE

ETHIOPIAN ECONOMY

 Ethiopian national economy largely bases itself on agriculture.

 Agriculture constitutes the principal source of income and employment for the majority of the
population in Ethiopia. Greater proportion of the foreign exchange the country earns also comes
from this sector.
 The importance and predominance of the agricultural economy in the country can be suggested
by the following facts:

1. Agriculture employs the majority (80%) of the Ethiopian total population

2. Agriculture supplies more than 90% of export commodities. Thus, agriculture is the main source
of Ethiopia’s export earnings

3. Agriculture contributes 32.7% of the Gross Domestic Products (GDP) of the country
 Agriculture’s main products are food crops, cash crops, industrial crops, fruits and vegetables,
flowers, and animal products.
 Agriculture had been the leading sector followed by the service sector until 2014/15. But, after
2015/16, the service sector emerged as the dominant sector mainly due to natural factors and
economic factors.
5.2.1 Contribution of subsistence farming to the Ethiopian Economy
 It is a common feature of developing countries including Ethiopia. Both crop farming and animal
rearing use traditional tools and techniques. It is hand-to-mouth in nature. The products grown are
primarily for family needs.
 In Ethiopia, it produces varieties of food crops, which grow in different agro-climatic conditions.
 The crops include cereals such as teff, wheat, barley, sorghum, etc.
 Pulses, Enset and oilseeds are also among the food crops grown in this sector.

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5.2.2 Contribution of Cash Crop Production to the Ethiopian Economy
 It is concerned with producing crop for sale. Hence, the main objective of this sector is to make
money.
 In this regard, Ethiopian farmers produce varieties of cash crops such as coffee, oilseeds, pulses,
chat, sugar cane, cotton and fruit. Contribution of cash crop production to the Ethiopian
economy listed hereunder:
a) Source of Food and Raw Material
 One of the main roles of agriculture in the Ethiopian economy is being the source of food and
raw materials.
 For example, agriculture supplies the country with food grains, dairy and meat products. The
agricultural sector is also the supplier of foodstuff to consumers and raw materials to agro
industries
b) Source of Capital

Cash crop production in Ethiopia provides funds for capital formation such as: agricultural taxation and
export of agricultural products,

i. Agricultural taxation: Taxes paid by cash crop production farmer’s important contribution to the
Ethiopian Economy.

ii. Export of Agricultural products: The major Cash crop productions for export items of the
country include coffee, oilseeds, flower, chat and pulses.

Coffee is Ethiopia’s most important export commodity, accounting for about 28.6 % of the value of
all exports in 2019/20. Other cash crops oil seeds, pulses and chat accounts for 11.5%, 7.9%, and
10.9%.of the total value of all exports in 2019/20 respectively.

C. Contribution to Employment:

About 80% of the Ethiopian population earns their livelihood from agriculture. Cash crops bring
substantial wage and employment opportunities to the rural economy.

5.2.3 Problems of Agriculture in Ethiopia

 Land degradation
 Variable Rainfall
 Fragmentation of Farm Plots and Small Size of Holdings
 Backward Technology
 Poor Rural Infrastructure

5.3 TRADE AND TRANSPORT IN ETHIOPIA

5.3.1 Trade

Trade is a basic economic concept involving the buying and selling of goods and services, with
compensation paid by a buyer to a seller, or the exchange of goods or services between parties.

Types of Trade

In Ethiopia there are two main types of Trade namely:

a) Internal (Domestic) trade: This refers to the exchange of goods and services within the country.
Internal trade is the base for foreign trade.

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 b) External (Foreign) trade: is the process of trading, which involves the exchange of commodities
among different countries. Since there is no country that is self-sufficient in all demands, the
movement of items from one country to another in the form of trade is unavoidable.
 The Structure of Export and Import Trade

I. Export Trade Sector of Ethiopia

These include coffee, oilseeds, flower, chat, pulses, gold, textile and textile products, etc. According to
the National Bank of Ethiopia 2019/20 report, the most dominant export item of the country is coffee.

II. Import Trade sector of Ethiopia

Ethiopia imports mainly finished products like machinery, transport equipment, electrical and electronic
goods, fuel and the like. The overall annual import values of Ethiopia have been constantly declining both
by value and percentage.

Trade Balance of Ethiopia

 Trade balance is the yearly difference between the export and import values.
 If the yearly export value of a given country exceeds its yearly import value it will be a positive
or surplus trade balance.
 If import exceeds export it will be a negative trade balance. In Ethiopia import values exceed
export values; hence the country experiences a trade deficit (negative trade balance).
5.3.2 Transportation in Ethiopia

Transportation may be defined as a movement of materials and goods, or people from one place to
another with a specified objective.

Modes of Transport in Ethiopia

Based on their stage of development the existing modes of transport in Ethiopia are broadly divided into
two:

I. Traditional modes of transport: include the use of pack animals and Human porterage

II, Modern modes of transport: the modern transport sector in Ethiopia uses the following four different
modes of transport. This includes:

 Road transport
 Railway transport
 Inland waterways
 Air transport
 Road Transport
 Road transportation is the mode of freight and passenger transportation using buses, cars, and
truck.
 It is more widespread and more flexible than railway.
 It is most important to the Ethiopian economy.
 Roads are the most important transport infrastructure in providing access to rural and urban
areas in Ethiopia.
Railways:
 The railway was built from 1897–1917 and was about 781 km long
 It was also a single lane track.

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  The Addis Ababa–Djibouti Railway is a new standard gauge international railway that serves as
the backbone of the new Ethiopian National Railway Network.

Advantage

 helps transport bulky products served to move export- imports

 It provides Ethiopia with access to the sea linking Addis Ababa with Djibouti and its Port of
Doraleh.
 More than 95% of Ethiopia’s trade passes through Djibouti.

C. Inland Waterways

 Water transport is cheap and convenient for transporting bulky goods over long distances.
 The use of Ethiopian rivers and lakes as inland waterways is extremely limited.
 This is due to:
 The ruggedness of the topography
 The seasonal nature of rainfall in most parts of the country.
 The only navigable river in Ethiopia is Baro. There is also small-scale transportation over lakes
Tana, Abbaya and Ziway.

D. Air transport

 Established in 1945.
 The most recent and fastest mode of transportation.
 The Ethiopian Airlines the best airlines by African standards.
 The leading and most profitable airline in Africa.
 It has more than 62 destinations in Africa and more than 127 international destinations in five
continents.
 It also has more than 22 domestic destinations and 58 cargo destinations. It is the largest cargo
network operator in Africa.
 It is a part of Star Alliance Network

5.4 ROAD SAFETY IN ETHIOPIA

 Road safety is safety in using roads.

 It involves rules such as:
 Speed limits
 drinking and driving,
 Control systems, such as traffic lights and crossings.

Current Accident Severity Definition in Ethiopia:

1. A fatal accident is the one in which one or more individuals die as a result of a traffic accident within
the same reporting 30 days of the occurrence of the accident.

2. A serious injury is one in which a victim sustains severe cuts, bleeding, breaks, and other damages,
which requires medical treatment as “inpatient” in hospital.

3. A slight injury is the one as a result of which the victim sustains only small cuts, scratches, and other
small damages which may be treated as an outpatient without requiring admission to a hospital.

4. Property damage only accident is the one as a result of which no person is injured only one or more
vehicles involved in the accident are damaged.

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Factors Influencing Road Accidents

There are four major factors influencing road traffic accidents. These are:

 Vehicle related factors

 Road related factors
 Road user related factors
 Environmental related factors

Causes of Road Traffic Accident

 Driver distraction
 Driver Impairment by Tiredness
 Mechanical failure
 Road conditions
 Speed exceeding safe conditions

Consequences of road traffic accidents include:

 loss of productivity of the victims

 the cost of the legal system
 the cost of pain and suffering, and
 Loss of quality of life of the victim and their family.

5.5 CULTURAL LANDSCAPES AND TOURISM IN ETHIOPIA

 A cultural landscapes are a geographic area (including both cultural and natural
resources), that is associated with a historic event, activity or person, or exhibiting any other
cultural or aesthetic values.
 Represent the “combined works of nature and man”.

E.g Konso cultural landscapes

Tourism is a collection of activities, services and industries that delivers a travel experience, and they
include transportation, accommodations, eating and drinking establishments, retail shops, entertainment
businesses, activity facilities and other hospitality services provided for individuals or groups travelling
away from home.

 It is a source of both job opportunities and income.

 It is known as a ‘smokeless industry’.
