Economic Crisis In Ethiopia Essay

To add, The Birr (Ethiopia’s currency), is unreliable in banks and can cause delays while trying to exchange in business transactions and because of Ethiopia’s absence in the World Trade Organization (WTO), there is no way to regulate the coin, the value, and its exchanging mechanisms. In 2012, the US FDI in Ethiopian stock was $11M, and this reflected a 22.2% increase from 2011. Despite these promising figures, there are some investment barriers listed by the United States Trade Representative (USTR). As far as investments in the telecommunication services industry, as well as defense industry; any investment is prohibited unless it is being done within a partnership with the Ethiopian government. The banking, insurance, and micro-credit …show more content…
Along with these restrictions and limitations, state-owned enterprises continue to be privatized. All in all, these barriers influenced by the political scene in Ethiopia, along with a foreign exchange managed by a Central Bank of a strict regime that bends for governmental benefits, are all reasons why an investor might see set-back from the political aspects of Ethiopia.
Now, we will construct an analysis on the economic situation ongoing in Ethiopia. The economy of Ethiopia is based on several factors including: Industrial, Trade, Regulatory, Investment, Government Procurement, Labor, Development, SMEs, and Consumer Protection. These are all sectors that become intertwined when discussing economics in Ethiopia. Industrial development in Ethiopia is under the Industrial Development strategy, this was established in 2001 which is fairly new for an industrial strategy. Since the private sector now controls a lot of the industrialization, it is important to understand regulations currently have eliminated limits for private businesses to conduct business without the government interfering so much in day to day functions. (???) In regards to GDP growth