Ethiopia’s Top Trading Partners

Addis Ababa, Ethiopia courtesy of Pixabay.com

Addis Ababa, Ethiopia

Located in the Horn of Africa on the Dark Continent’s northeastern coast, the Federal Democratic Republic of Ethiopia shipped US$2.9 billion worth of products around the globe in 2017.

That dollar figure represents a miniscule 0.02% of overall global exports estimated at $15.952 trillion one year earlier during 2016.

From a continental perspective, $1.2 billion or 42.7% of Ethiopian exports by value were delivered to Asian countries while 29.1% were sold to European nations. Ethiopia shipped another 16.8% worth of goods to fellow African nations, with 8.5% of Ethiopia’s shipments going to customers in North America.

At 0.9%, a much smaller portion of Ethiopian exports were bought by importers in Latin America (excluding Mexico) plus the Caribbean.

Ethiopia’s Top 15 Trading Partners

Top 15

Below is a list showcasing 15 of Ethiopia’s top trading partners, countries that imported the most Ethiopian shipments by dollar value during 2017. Also shown is each import country’s percentage of total Ethiopian exports.

  1. China: US$288.2 million (10.1% of total Ethiopian exports)
  2. Somalia: $243.6 million (8.5%)
  3. United States: $227.3 million (7.9%)
  4. Saudi Arabia: $206.2 million (7.2%)
  5. Germany: $195.1 million (6.8%)
  6. Netherlands: $188.9 million (6.6%)
  7. United Arab Emirates: $127.6 million (4.5%)
  8. Switzerland: $111.6 million (3.9%)
  9. Japan: $101.1 million (3.5%)
  10. Djibouti: $96 million (3.4%)
  11. Belgium: $95 million (3.3%)
  12. Israel: $79.9 million (2.8%)
  13. Vietnam: $70.1 million (2.5%)
  14. Kenya: $67.7 million (2.4%)
  15. Italy: $61.3 million (2.1%)

Three-quarters (75.4%) of Ethiopian exports in 2017 were delivered to the above 15 trading partners.

China (down -18.9%), Djibouti (down -12.1%) and Somalia (down -10.2%) were the only top importers that decreased purchases from Ethiopia from 2016 to 2017. Among the other 12 countries, gains ranged from a minimum of -0.8% for Switzerland up to 119.5% for Kenya.

Deficits

Overall Ethiopia incurred an -$11.8 billion trade deficit in 2017, down by -14.2% from the -$13.8 billion in red ink for 2016.

As defined by Investopedia, a country whose total value of all imported goods is higher than its value of all exports is said to have a negative trade balance or deficit.

It would be unrealistic for any exporting nation to expect across-the-board positive trade balances with all its importing partners. Similarly, that export country doesn’t necessarily post a negative trade balance with each individual partner with which it exchanges exports and imports.

Ethiopia incurred the highest trade deficits with the following countries:

  1. China: -US$4.6 billion (country-specific trade deficit in 2017)
  2. India: -$1 billion
  3. United States: -$983.9 million
  4. Italy: -$583.9 million
  5. Japan: -$579 million
  6. Kuwait: -$563.1 million
  7. Turkey: -$557.2 million
  8. Malaysia: -$340 million
  9. Morocco: -$285.9 million
  10. Saudi Arabia: -$246.7 million

Among Ethiopia’s trading partners that cause the greatest negative trade balances, Ethiopian deficits with Morocco (up 44.5%), Saudi Arabia (up 34%) and Malaysia (up 19.1%) grew at the fastest pace from 2016 to 2017.

These cashflow deficiencies clearly indicate Ethiopia’s competitive disadvantages with the above countries, but also represent key opportunities for Ethiopia to develop country-specific strategies to strengthen its overall position in international trade.

Surpluses

Based on Investopedia’s definition of net importer, a country whose total value of all imported goods is lower than its value of all exports is said to have a positive trade balance or surplus.

In 2017, Ethiopia incurred the highest trade surpluses with the following countries:

  1. Somalia: US$242.1 million (country-specific trade surplus in 2017)
  2. Djibouti: $95.9 million
  3. Switzerland: $52.1 million
  4. Israel: $42.8 million
  5. Vietnam: $32.3 million
  6. Kenya: $32 million
  7. Yemen: $31.3 million
  8. Jordan: $16.1 million
  9. Iran: $10.5 million
  10. Togo: $10.1 million

Ethiopia’s trade balance with Kenya went from -$1.8 million in red ink during 2016 to a $32-million surplus for 2017. Similarly, Ethiopia transitioned from a deficit of -$7.5 million in 2016 to a $10.5 million in black ink trading with fellow African country Kenya.

Among Ethiopia’s other top trading partners that generate the greatest positive trade balances, Ethiopian surpluses with Yemen (up 147.6%), Togo (up 107.5%) and Vietnam (up 67.3%) grew at the fastest pace from 2016 to 2017.

These positive cashflow streams clearly indicate Ethiopia’s competitive advantages with the above countries, but also represent key opportunities for Ethiopia to develop country-specific strategies to optimize its overall position in international trade.

Companies

Companies Servicing Ethiopian Trading Partners

Given that Ethiopia is an emerging economy, it should come as no surprise that not one Ethiopian corporation appears on the Forbes Global 2000 list.

Wikipedia does document some Ethiopian export companies. Selected examples are shown below:

  • Ambo Mineral Water (bottled mineral water)
  • Ethio Telecom (mobile, fixed line, broadband services)
  • Marathon Motors Engineering (automobiles)
  • Yebbo Communication Network (software, websites)
  • Yousran International (sesame seeds, spice seeds, edible oils)

According to global trade intelligence firm Zepol, the following companies are examples of Ethiopian exporters representing diverse industries:

  • A Oil Seeds and Cereals Export (beans including kidney beans)
  • Haicof Limited (coffee)
  • Harar Brewery Share (malt beer)
  • Max Export (polypropylene)
  • Packtra (polyesters, lamps)


 
See also Ethiopia’s Top 10 Exports and Ethiopia’s Top 10 Imports

Research Sources:
The World Factbook, Field Listing: Imports – Commodities, Central Intelligence Agency. Accessed on March 1, 2018

Trade Map, International Trade Centre, www.intracen.org/marketanalysis. Accessed on March 1, 2018

Investopedia, Net Importer Definition. Accessed on March 1, 2018

Forbes 2015 Global 2000 rankings, The World’s Biggest Public Companies. Accessed on March 1, 2018

Zepol’s company summary highlights by country. Accessed on March 1, 2018