“Ethiopia experiences an economic boom; bamboo is one of the responsible cash crops for the rising wealth”

Source: AP TELEVISION, Sunday, February 17, 2008 9:44 PM

Agriculture is the back bone of the booming Ethiopian economy

From small family run holdings to large scale plantations, all are contributing to the growing GDP growth.

But the country’s recent success is not only due to agriculture.

A report issued by the International Monetary Fund says growth is happening because of a number of different factors.

They range from favourable weather boosting crop production, to foreign cash sent by Ethiopians living abroad.

Arnim Schwidrowski, a senior representative for the IMF, says since a large scale drought in 2003, the country has been experiencing yearly economic growth of 10 to 11 per cent.

Partly because of this sustained economic growth, small banks and insurance offices have been mushrooming across the capital.

Also, traditional Ethiopian exports, like coffee and flowers have also been fetching higher prices on the international market.

Emerging cash crops like bamboo, leather and sugar are also responsible for the rising wealth.

Nonetheless the reliance on agriculture for half of the nation’s GP, worries some Ethiopians.

Amare Babu, a meteorologist, says rainfall distribution is not even in Ethiopia.

In the past the country has suffered from disastrous droughts and famines.

With little irrigation available, small-holder farmers have to rely on the irregular rainfall.

The country’s main rainy season starts from June to Sept, followed by a dry season from October to January.

Little rain fall in the months from January to May.

The livestock industry also relies heavily on the weather.

Ethiopia is estimated to have the largest number of livestock in Africa, and the 10th largest in the world, according to USAID.

In terms of the annual GDP, livestock accounts for 15 per cent.

Belaga Tadesse, a livestock trader, says livestock is very important for Ethiopians.

Animals are used to plough fields, the dairy industry, and for meat and leather, according to Tadesse.

One head of cattle is trading at around $350 US Dollars, says Tadesse.

Nonetheless, growth of the Ethiopian economy is having some negative effects.

Inflation is high and people at the very bottom of the economic chain are feeling the rise in prices.

Most of Ethiopia‘s 80 million population live below the poverty line, and live on $1 USD per day, according to figures released by United Nations.

Getachew Adem, from the country’s Ministry of Finance and Economic Development, says the problem they face is one of balancing the rising inflation with economic growth.

According to Adem inflation is at 17 to 18 per cent.

To ease the country’s reliance on agriculture, the government plans to expand other sectors, like banking and construction.

This is a move which the IMF support, as they believe that shifting from agriculture, to non-weather related sectors will make Ethiopia‘s economy more resilient.