National Bank of Ethiopia Annual Report 2008-2009

Currency and Time Currency Currency Unit: Birr (Br) Exchange Rate: See Page 97 Time Fiscal Year: July 8th to July 7th Coffee Year: October to September Calendar Year: September 11 to September 10 ** There is a difference of about 73/4 Years between the Gregorian and the Ethiopian era

Currency and Time Currency Currency Unit: Birr (Br) Exchange Rate: See Page 97 Time Fiscal Year: July 8th to July 7th Coffee Year: October to September Calendar Year: September 11 to September 10 ** There is a difference of about 73/4 Years between the Gregorian and the Ethiopian era

National Bank of Ethiopia Annual Report 2008/09 TABLE OF CONTENTS Governor’s Not……………………………………………………………………...1

Ethiopia: Macroeconomic & Social Indicators I. Overall Economic Performance ......................................................................5 1.1 Economic Growth ............................................................................................ 5 1.2 GDP by sector .................................................................................................. 6 1.3 GDP by Expenditure by Component ................................................................8 1.4 Micro and Small Scale Enterprises .................................................................. 9 1.5 Mining .............................................................................................................. 11 1.6 Developments in Education Sector .................................................................. 13 1.7 Access to Water Supply .................................................................................... 17 1.8 Transport Sector Development ........................................................................ 19 1.8.1 Road Transport .............................................................................................. 19 II. Energy Production ......................................................................................... 21 2.1 Electric Power Generation ................................................................................. 21 2.2 Volumes and Value of Petroleum Imports .......................................................... 23 III. Telecommunication ......................................................................................... 27 IV. Price Developments............................................................................................ 31 4.1 Development in Consumer Price at National Level ......................................... 31 4.2 Regional Consumer Price Developments ......................................................... 33 V. Monetary and Financial Developments...........................................................37 5.1 Monetary Developments and Policy .............................................................. 37 5.1.1 Developments in Monetary Aggregates ...................................................... 37 5.1.2 Developments in Reserve Money and Monetary Ratios ............................. 40 5.2 Development in Interst Rate .......................................................................... 41 5.3 Developments in Financial Sector ................................................................. 43 5.3.1 Resource Mobilization by Banks ................................................................ 59 5.3.2 New Lending Activities .............................................................................. 51 5.3.3 Outstanding Loans ...................................................................................... 53 5.4 Financial Activities of NBE .............................................................................. 57 5.5 Developments in Financial Markets ................................................................. 58 5.5.1 Treasury Bills Market ................................................................................ 58 5.5.2 Bonds Market ............................................................................................. 60 5.5.3 Interbank Money Market ........................................................................... 60

National Bank of Ethiopia Annual Report 2008/09 VI. Development in External Sector...................................................................... 62 6.1 Overall Balance of Payments ............................................................................. 62 6.2 Developments in Merchandise Trade ................................................................. 65 6.2.1Exports ...................................................................................................... 65 6.2.2 Imports ...................................................................................................... 69 6.2.3 Direction of Trade ..................................................................................... 70 6.3 Service and Transfers ......................................................................................... 72 6.3.1Services ..................................................................................................... 72 6.3.2 Unrequited Transfers ................................................................................ 73 6.4 Current Account ................................................................................................. 73 6.5 Capital Account .................................................................................................. 74 6.6 Changes in Reserve Position .............................................................................. 74 6.7 External Debt ...................................................................................................... 74 6.8 Developments in Foreign Exchange Market ...................................................... 75 6.8.1Developments in Normal Exchange Rate ................................................. 75 6.8.2 Movements in Real Effective Exchange Rate .......................................... 77 6.8.3 Foreign Exchange Transactions ............................................................... 78 VII. General Government Finance ............................................................ ..80 7.1 General .............................................................................................................. 80 7.2 Revenue and Grants ............................................................................................ 81 7.3 Expenditure ........................................................................................................ 83 7.4 Debit Financing .................................................................................................. 85 VII. Investment ...................................................................................... 86 8.1 Investment by Sector ......................................................................................... 89 82 Investment by region ......................................................................................... 91 IX. International Economic Developments ....................................................... 93 9.1 International Economic Developments ................................................................ 93 9.1.1 Overview of World Economy .................................................................... 93 9.1.2 World Trade ................................................................................................. 96 9.1.3 Inflation and Commodity Prices ................................................................. 97 9.1.4 Exchange Rates ............................................................................................ 98 9.1.5 Capital Flows ............................................................................................... 99 9.2 Implications for Ethiopian ................................................................................ 100

National Bank of Ethiopia Annual Report 2008/09 Statistical Tables Estimate of Agriculture Production………………………………………………….. 124 Gross Domestic product by Economic …………………………………………….… 125 Expenditure on Gross Domestic Product at Current Market Price…………………. 126 Balance of Payments ………………………………………………….….….….….... 127 Summary of External Public Debt ………………………………………………….. 128 Value of Major Exports …………………………………………………….….….…. 129 Quantity of Major Exports …………………………………………………….….… 129 Value of Major Imports (in Thousand of Birr) ……………………………………... 130 Value of Major Imports ( in Metric Tons)…………………………………….….….. 132 Value of Imports by End Use …………………………………………………….….. 134 Value of Imports by Country of Origin …………………………………………...... 136 Value of Exports by Country of Destination ……………………………………....... 137 Trade Balance with Major Trading Partners ……………………………………….... 138 Components of Broad Money ……………………………………………………...... 139 Domestic Credit by Sector ……………………………………………………........... 140 Gold and Foreign Exchange Holdings of the Nbe and Commercial Banks………… 141 Treasury Bills Auction Results ……………………………………………………..... 142 Number and Capital of Domestic & Foreign Projects Approved by Sectors ………. 145 Expected Employment Creation of Approved Domestic and Foreign Investment …. 146 Employment Created by Domestic and Foreign Investment Projects by Sector …… 147 Number and Capital of Domestic & Foreign Investment Projects ………………… 148 Number and Capital of Investment Projects Approved by Region ………….….…... 149

National Bank of Ethiopia I Annual Report 2008/09 G.C. G.C. 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 E.F.Y. E.F.Y (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) 1. Country Profile noilli m41. 1 noilli m41. 1 noilli m41. 1 noilli m41. 1 1.14million Arable Land ( % of total area ) 45.0 Irrigated Land ( % of total area ) 3.0 Population Density ( person per sq.km ) 53.3 : 1sq.km 52 6. : 1sq.km 54.0 : 1sq.km 55.4:1sq.km 56.8:1sq.km 58.3:1sq.km 59.9.1:1sq.km 61.4:1sq.km 63.5:1sq.km 65.7:1sq.km 67.4:1sq.km 00000006 00077706 sr ot aci dnI l ai coS . 2 Population (total), in millions 60.78 60.00 61.60 63.20 64.80 66.50 68.30 70.00 72.40 74.90 76.8 (o/w Urban Poulation, in %) 14.7 14.9 15.1 15.33 15.5 15.8 15.97 16.21 16.45 N.A NA Working Age Population ( In Millions ) 4. 6 1. 6 6. 5 6. 5 nabr U 6.5 7 6.95 7.6 7.6 N.A NA 8. 92 8. 82 00. 82 2. 72 l aruR 30.54 31.4 32.6 33.2 32.9 N.A NA 2. 63 9. 43 8. 33 8. 23 l at oT 37.04 38.4 39.6 40.7 40.6 N.A NA 0. 68 2. 78 8. 78 1. 88 oit a Rycnednepe Deg A 86.6 85.2 84.7 84.3 89.8 N.A NA Life Expectancy at Birth ( Male - Female ) 49.7 - 52.4 50.9-53.0 53.4-55.4 53-55 53.42-55.42 55.6-57.92 55.6-57.92 53.4-55.4 NA Crude Birth 000, 1: 9. 93 000, 1: 9. 93 000, 1: 2. 44 000, 1: 4. 44 et a R 39.9:1,000 39.9:1,000 35.7:1,000 36.89:1,000 NA Crude Death 000, 1: 6. 21 000, 1: 6. 21 000, 1: 51 000, 1: 8. 41 et a R 12.6:1000 10.75:1000 10.75:1000 N.A NA Natural Rate of Population Increase ( In % ) 2.9 2.90 2.7 2.9 2.7 2.6 2.6 2.7 2.5 Total Fertili c 47. 6 et a Ryt hild. : W. 6.5clild.:W 5.8child.:W 5.8child.:W 5.8child:W 5.9child:W 5.4child:W NA People : Hospital Beds N.A. 5,273 : 1 6,086.4:1 5740.4:1 6479.2:1 5721.4:1 5273.5:1 14424:1 N.A N.A NA People : Physician1 48,069:1 50,273.2:1 47,836.0:1 35604:1 34005.1 36954.1 29777:1 35493:1 49888:1 N.A NA People : Nurse 1 11,217:1 9,458.5:1 8,461.0:1 5236.0:1 4879:1 4621:1 3956.8:1 4206:01:00 4601:01:00 N.A NA Infant Mortali 300, 1: 79 200, 1: 79 100, 1: 79 000, 1: 79 000, 1: 011 000, 1: 501 et a Ryt 80:1,000 77:1,000 NA Access to Safe Water ( In %) 4. 82 09. 72 00. 03 08. 32 l eveLyrt nuo C NA 35.9 N.A N.A 52.46 59.5 NA Urban Popul . 57 07. 19 00. 27 05. 38 noit a 7 NA 92.4 N.A N.A 82.02 86.2 NA Rural Popul 9. 91 01. 71 00. 42 07. 31 noit a NA 25.2 N.A N.A 46.39 53.9 NA Access to Sanitation ( In % ) . A. N . A. N . A. N 01. 47 noit al upoPnabr U NA NA N.A NA Rural Popul . A. N . A. N . A. N 02. 7 noit a NA NA N.A NA Student-Teacher Ratio 1: 46 1: 36 1: 16 1: 65 1: 15 ) 8- 1( yra mir P 65;1 66;1 62;1 59;1 57;1 NA Secondary ( 9-12 ) 40 : 1 43 : 1 52 : 1 54 : 1 45 : 1 48;1 51;1 57;1 48;1 43;1 NA Technical & Vocational 6 : 1 7.6 : 1 9:1 17:1 25:1 22:1 21:1 20:1 27:1 25:1 NA Student-School Ratio 1: 0. 476 1: 5. 716 1: 365 1: 615 ) 8- 1( yra mir P 1402:1 724;1 690;1 654;1 677;1 657;1 NA Secondary ( 9-12 ) 1,352 : 1 982 : 1 1,531.2 : 1 1681.0:1 1222:1 1312;1 1350;1 1425;1 1440;1 1381;1 NA Technical & Vocational 1: 0. 172 1: 9. 462 1: 762 1: 991 353:1 552:1 534:1 468:1 493:1 501:1 NA 3. Macroeconomic Indicators 3.1 Real Sector Development3 GDP at Current Market Price (In Mn. Birr) 58,788.6 66,648.3 68,026.8 66,556.6 73,432.2 86,661.0 106,472.8 131,641.0 171,989.0 248,605.0 336,106.0 Nominal GDP Growth Rate (In %) 5.9 13.4 2.1 -2.2 10.3 18.0 22.9 23.6 30.7 44.5 35.2 Average Marginal Exchange Rate (Birr per (USD) 7.5100 8.1400 8.3300 8.5400 8.5800 8.6300 8.6518 8.6810 8.7943 9.2441 10.42052. 452, 23 4. 398, 62 9. 655, 91 3. 461, 51 4. 603, 21 8. 140, 01 5. 855, 8 5. 397, 7 5. 661, 8 8. 781, 8 0. 828, 7 ) DS U NI( P MCP DG 0. 024 0. 953 0. 072 712 0. 081 0. 151 0. 231 321 331 631 8. 821 ) DS UnI( ati pa Crep PDGGross Private Consumption ( % of GDP ) 76.4 73.1 75.4 79.2 82.6 75.0 81.7 83.2 80.8 84.9 85.2 Gross Government Cosumption ( % of GDP ) 15.6 17.9 14.6 14.8 13.4 13.1 12.4 12.2 10.5 9.8 8.2 Gross Domestic Fixed Investment (% of GDP) 21.9 20.3 21.5 24.1 22.2 26.2 23.8 25.2 25.8 22.5 22.4 Resource Balance ( % of GDP ) -12.4 -11.9 -11 7. -14.0 -14.1 -16.7 -20.4 -22.7 -19.3 -19.4 -18.2 GDP at 1999/2000 Factor Cost (In Mn. Birr) 58,838.3 Real GDP Growth Rate (In %) 4 5.2 5.9 7.4 1.5 -2.1 11.7 12.6 11.5 11.8 11.2 9.9 Agriculture & Allied Activties ( % of GDP ) 50.8 49.9 50.9 49.1 44.9 47.0 47.4 47.1 46.1 44.6 43.2 Industrial Sector ( % of GDP ) 12.3 12.4 12.1 12.9 14.0 14.0 13.6 13.4 13.2 13.0 13.0 Service Sector ( % of GDP ) 36.9 38.7 38.0 38.6 41.7 39.7 39.7 40.4 41.7 43.5 45.1 ETHIOPIA : MACROECONOMIC AND SOCIAL INDICATORS 62,229 66,920 68,014 66,587 74,397 83,804 93,474 104,499 116,178 127,737

National Bank of Ethiopia Annual Report 2008/09 II Continued…. G.C. G.C. 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 E.F.Y. E.F.Y (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Real GDP per Capita ( In Birr ) 968.1 1110 1172 1160 1106 1224 1334 1441 1553 1664 1763.0 Real GDP per Capita Growth Rate (In %) 2.1 14.7 5.6 -1.0 -4.7 10.7 8.9 8.2 7.8 4.1 6.0 GDP Deflator (% change) 0.7 6.9 -5.8 -3.6 12.8 3.9 9.9 11.6 17 2. 30.5 24.4 3.2 Monetary Indicators Narrow Money Supply (M1) ( In Mn. Birr ) 11,378.9 13,050.2 13,745.8 15,182.4 16,446.7 19,065.9 21,289.8 23,811.9 29,773.4 36,875.5 42,112.7 Broad Money Supply (M2) ( In Mn. Birr ) 19,399.3 22,177.8 24,516.2 27,322.0 30,090.1 34,655.9 40,212.1 46,377.4 56,860.3 69,918.2 82,509.8 Net Foreign Assets ( In Mn. Birr ) 6,087.8 4,770.6 4,800.0 7,822.5 11,049.2 11,766.9 13,868.0 12,109.6 13,927.3 12,140.6 17,976.8 Reserve Requirement ( CBs ) 800.9 924.1 1,081.8 1,163.9 1,320.3 1549.35 1,828.4 2,120.9 2,547.7 9,035.3 11,183.3 Interest Rate ( In % ) 3 6 et aRtisope D mu mi ni M 3 4.0 5. 01- 0. 8 5. 01- 0. 8 0. 51- 5. 01 5. 31- 5. 01 31- 5. 01 et aRgni dneL 8.0-10.5 7-14 8-15 8-16.5 4. 690, 02 )rri B. n mni( ti der Ccitse mo Dt e Nl at oT 26,271.0 27,551.6 27,550.2 28,202.3 31138.781 40305.8 49295.9 61585.0 80772.6 89,203.0

1. 589, 51 0. 171, 51 7. 577, 41 0. 5859 t ne mnrevo G 17,229.8 19199.154 21663.8 25266.4 30290.2 34169.2 32,786.5 Other Sectors 10511 4. 11 495 , .3 12,380.6 11,565.1 10,972.6 11939.627 18642.0 24029.6 31294.8 46603.4 56,416.5 3.3 Inflation (CPI)5 Country Level
2. 01- 3. 0- 4. 5 3. 4 noit alf ni l arene G- 10.9 7.3 6.1 10.6 15.8 25.3 36.4 -Food inflation 9.9 7 6. -1.7 -19.1 21.5 11.5 7.4 13.0 17.5 34.9 44.2 -Non-Food inflation (core inflation) -2.0 2 5. 1.4 0.3 0.2 2.2 4.4 7.1 13.5 12.5 23.8 Addis Ababa
3. 1- 2. 4 1. 1 noit alf ni l arene G- -5.5 4.6 5.6 7.2 8.4 19.2 20.8 29.4 -Food inflation 4.3 7 2. -7.8 -10.7 9.4 8.6 5.7 13.0 25.4 32.1 41.5 -Non-Food inflation (core inflation) -3.5 0 6. 5.6 -0.8 0.9 3.0 7.6 4.6 14.0 12.7 19.2 3.4 External Trade ( In Mn. USD ) 8213 4. 5452 98. 6512 94. 0781 4. 9151 6. 9311 7. 289 1. 979 489 9. 319 seci vr es &sdoogf otr opxE 3399.2 Import of goods & servi 1. 370, 2 4. 639, 1 8. 959, 1 8. 378, 1 sec 2,346.7 3267.9 4352.72 5431.77 6332.7 8313.1 9292.5 Net trade in goods & servi 8. 298, 5- 1. 581, 5- 3. 787, 3- 9. 472, 3- 2. 284, 2- 5. 847, 1- 1. 702, 1- 4. 090, 1- 3. 759- 8. 579- 9. 959- sec Current account balance including official transfers ( 509.9) (334.8) (242.4) (361.0) (160.0) (495.8) (1184.0) (1547.4) (855.5) (1479.8) (1634.5) Capital account balance (144.4) 151.7 258.6 509.0 304.0 375.6 585.1 632.6 798.5 1,046.9 1664.9 Overall balance of payments (473.2) (393.7) (70.5) 300.2 301.6 138.9 -101 4. -327.1 85.1 -263 3. 376.8 3.5 Government Finance ( In Mn. Birr )6
4. 338, 21 0. 508, 21 0. 222, 11 2. 512, 11 )st nar g gni dul cni( euneve Rl at oT 15,703.0 17,918.0 20,147.0 23,225.0 29,381.0 39,705.0 54,628 Total Revenue (excluding grants) 9,453.1 9,498.0 10,177.0 10,409.0 11,149.0 13,917.0 15,582.0 19,493.0 21,797.0 29,794.0 40,174 ,997 8 2 0. 10832 0. 45371 0. 22141 0. 89321 0. 609, 01 0. 3428 0. 629, 7 0. 0447 0. 287, 6 6. 1955 euneve R- xaT w/ o Tax-Revenue as % of . 9 PDG 7 10.2 10.9 11.9 11.2 13.0 12.8 12.7 10.1 9.6 8.6 Total Expenditures 14556.7 17,183.6 15786.4 17,651.0 20517.0 20,520.0 24803.0 29325.0 35607.0 46915.0 57,774
5. 055, 01 0. 973, 01 6. 147, 31 5. 621, 01 seruti dnepx Et nerru C 13,549.0 11,977.0 13,235.0 15,234.0 17,165.0 22,794.0 27,176 Capital Expenditures 4 430 , 2. 3,442.0 5,003.4 6,130.0 6,313.0 8,271.0 11,343.0 14,042.0 18,398.0 24,121.0 30,559 Equity Contribution ( Sinking Fund ) - - - - Special P - - s margor 404.0 971 655 272 224.0 50.0 44.0 0.0 0.0 Total Expenditures as % of 5. 62 2. 32 8. 52 4. 52 PDG 27.9 23.7 25.7 22.3 20.7 18.9 17.2
6. 141- 0. 202- 6. 342, 4- 4. 376- ti cif e D/sul pr uSt nerr u C -2,400.0 1,940.0 6,652.7 4,259.0 4,632.0 7,000.0 12,998 Overall Budget Deficit ( including grants ) -3,341.5 -5,961.6 -2,981.4 -4,818.0 4,815.0 -2,602.0 -4,655.0 -6,100.0 -6226.0 -7210.0 -3146
7. 7- 4. 4- 9. 8- 8. 5- PDGf o %sati cif e D 6.6 -3.0 -4.8 -5.5 -3.6 -2.9 -0.9
8. 242, 7- 4. 906, 5- 6. 586, 7- 6. 301, 5- ) st nar g gni dul cxe ( ti cife Dt egdu Bll arev O -9,368.0 -6,603.0 -9,220.0 -9,832.0 -13,810.0 -17,121.0 -17,600
9. 01- 2. 8- 5. 11- 9. 8- PDGf o %sati cif e D -12.8 -7.6 -9.50 -8.80 -8.80 -6.89 -5.2 3.6 Exchange Rate ( Birr / USD ) Parallel Mark 86. 8 97. 8 13. 8 96. 7 et a Rt e 8.7091 8 6751 . 8.7110 9.0258 8.9570 9.5569 11.8102 Inter-Bank Forex Market Rate 7
10. 8 24. 8 02. 8 03. 7 egarev Adet hgi e wdoire P* 8.581 8.635 8.652 8.681 8.794 9.244 10.4205
11. 8 64. 8 22. 8 21. 8 doirep dnE* 8.600 8.630 8.660 8..69 9.030 9.610 11.3009

National Bank of Ethiopia Annual Report 2008/09 III Continued…. G.C. G.C. 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 E.F.Y. E.F.Y (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) 3.7 Treasury bill Market ( In Mn. Birr ) 1. 980, 62 5. 502, 81 8. 223, 81 5. 549, 21 ) l at oT( dedna me Dslli B- T 38,633.6 61,143.2 56,896.2 60,603.5 78,922.0 59,888.5 46,767.2 2. 354, 61 9. 223, 9 2. 113, 31 2. 437, 11 dl oSslli B- T 29,668.0 51,645.0 41,065.0 47,793.5 63,315.0 47,716.5 27,839.8 0. 2 8. 2 3. 3 8. 3 ) %ni( dl ei Ydet hgi e Wegarev A 1.3 0.5 0.095 0.038 0.530 0.677 0.743 2. 874, 4 5. 273, 3 5. 159, 1 0. 024, 2 redl oh yb gni dnatst u Oslli B- T 9,100.0 12485 6595 11638.5 11546 8239.5 7783.1 5. 524, 3 0. 429, 1 7. 408 0. 496 sknaB 8,094.3 11418 6295 10612.3 9135 2739 1672 7. 250, 1 5. 844, 1 8. 641, 1 0. 627, 1 sknaB- no N 1,005.7 1067 300 1026.2 2411 5500.5 6111.1 3.8 Inter-Bank Money Market Rate 7 11.0 8.0 7.5 7.5 _ 5. 8 5. 7 _ _ 5. 7 3.9 Financial Institutions 8 skna Bl ai cre mmo Cf or eb mu N 8 9 9 10 11 11 12 7 ) sknab et avir P w/ o( 7 6 7 8 9 9 10 592 382 762 642 sehcnar BknaBf o reb mu N 339 326 357 389 494 562 6361: 557021 1: 472331 1: 955641 1: 949971 1: 713191 1: 889302 1: 051191 1: 732412 1: 866712 1: 917422 1: 160742 hcnar BknaB: noit al upoP 9 sei nap mo Cecnar usnI f or eb mu N 9 10 12 8 ) sei nap mo CecnarusnI et avir P w/ o( 8 9 11 101 59 19 97 sehcnar BecnarusnI f o reb mu N 105 121 133 139 146 172 194 : 347526 1: 124846 1: 143956 1: 923967 hcnar BecnarusnI : noit al upoP 617143:1 549587:1 513534:1 503597:1 495890:1 435465:1 395876:1 skna Bt ne mpol eve Df or eb mu N 1 23 sehcnar BknaBt ne mpol eve Df o reb mu N 32 12 91 61 11 snoit utitsnI l ai cnanif- or ci Mf or eb mu N 22 22 26 27 28 27 30 Source : Ministries of Agriculture, Finance and Economic Development, Health, and Education as well as the National Bank of Ethiopia, Centeral Statistics Authority, ...etc Note: 2 Unlike the previous years the figure shows student section ratio 3 Values in the Real Sector for FY 1999/00 onwards are estimates 4 Value added of each group is devided by total value added including FISIM and from 1997/98 (for Addis Ababa) onwards calculated using the new base year (December 2006=100) 6 Figures for government finance are preliminary estimates from 1999/00 onwards. 7 Inter-bank money market was first introduced in Aug.1998 and Inter-bank forex market started as of September 1998, and daily transactions introduced beginning from October 24, 2001 1 Excluding manpower out side the Ministry of Health. 5 Inflation rate from 1996/97 to 1998/99 calculated using the base year 1995/96 ,and from 1998/99

National Bank of Ethiopia Annual Report 2008/09 1 Ethiopia’s broad-based economic growth continued for the sixth time in a row in 2008/09 putting the country in higher growth trajectory. The economy grew at 9.9 percent in 2008/09 making Ethiopia area of the fastest growing economies in the world despite world economic melt down and global financial crisis. With a 42.6 percent share in GDP, agriculture & allied activities rose 6.4 percent contributing 27.2 percent to the overall economic growth recorded in the fiscal year. Industry and service sectors also made substantial contributions to the overall economic performance. The industrial sector, with a share of 12.9 percent in total GDP, expanded by 9.9 percent, making 12.8 percent contribution to the overall economic growth as investments in hydroelectric power generation and water sub-sector continued to expand and the contributions of manufacturing, mining and quarrying and construction sub-sectors improved. The services sector also expanded by 14.3 percent contributing 63 percent to the annual economic growth. Financial sector growth contributed the lion’s share to the boom in the services sector. Inflationary pressure was one of the daunting challenges during the 2008/09 fiscal year mainly due to rapid structural transformation in domestic economy, growing demand and hikes in world commodity prices. Accordingly, annual average headline inflation reached 36.4 percent against 25.3 percent in 2007/08 and 6.1 percent in 2004/05 which was unprecedented in a low inflation country like Ethiopia. In many years, annualized food inflation, which constitutes 57 percent in the general CPI, topped 44.3 percent, largely driven by higher cereal prices which account for a lion’s share of the food CPI. At the same time, annualized core (non-food) inflation jumped to 23.8 percent relative to 12.5 percent in 2007/08 due to higher commodity prices. Yet, inflation started to decelerate from 46.1 percent in February 2009 to 36.4 percent by end June 2009 owing to tight monetary and prudent fiscal policy measures taken by the government to restore macroeconomic stability and it is expected to further drop to a single digit level in 2009/10.

The government’s fiscal operations were also supportive of economic growth as exhibited by the slowdown in the overall fiscal deficit of the general government from 2.9 percent last year Governor’s Note

National Bank of Ethiopia Annual Report 2008/09 2 to less than 1 percent in 2008/09. General government revenue (including grants) rose by 37.6 percent to Birr 54.6 billion due to strong economic growth and improved tax administration. But revenue to GDP ratio at 12 percent was still low compared to other developing countries, calling for further improvements in the tax reform program of the country. General government expenditure also witnessed 23 percent increase to Birr 57.7 billion with poverty reducing expenditure as percentage of GDP rising from 12.2 percent in 2007/08 to 12.8 percent in 2008/09. On the monetary front monetary policy was geared to contain inflation and rebuilding of international reserves. Accordingly, efforts have been made to control broad money growth at less than 20 percent. Against this backdrop, domestic liquidity expressed in broad money supply was kept at about 20 percent, much lower than the 35 percent surge in nominal GDP registered during the review fiscal year. Broad money to GDP ratio also steadily dropped from 33 percent in 2006/07 to 27.8 percent in 2007/08 and further to 25.5 percent in 2008/09. The growth in broad money supply during 2008/09 was largely driven by a build up in net foreign assets supported by higher donor aid flows as well as by the growth in domestic credit, exclusively credit to the private sector. Interest rates remained negative in real terms due to higher inflation but significantly improved in the later months as inflation tended to moderate. Regular Treasury bill auctions were used to mange domestic liquidity, and reserve and liquidity requirements were also raised to influence commercial banks’ ability to expand credit. Regarding financial sector, encouraging results were attained in 2008/09 in the face of global economic shocks and financial crisis. Ethiopian banking system remained sound partly due to prudent financial sector policy of the government which forbids foreign entry, and closer supervision and regulation of the NBE. Consequently, two new private banks entered the banking industry raising the total number of commercial banks operating in the country to 13 and subsequently increasing the number of bank branches to 636 from 562 last year. Nonetheless, the people-to-bank branch ratio depicted that Ethiopia still remains as one of the under-banked economies even by SSA standards. Ethiopian banks, as per soundness parameters, enjoyed increased profit, expanded their capital base, enhanced resource mobilization and loan disbursement activities and reduced the level of non-performing loan to a minimum level. Deposits mobilized and outstanding loans disbursed by the banking system rose by 24 and 7 percent, respectively, during the review fiscal year. In terms of fresh loans, the banks disbursement amounted to Birr 25.5 billion, lower than Birr 27.3 billion last year, as a reflection of the tight monetary policy pursued by the NBE consistent with the objective of arresting

National Bank of Ethiopia Annual Report 2008/09 3 inflationary pressure and inflationary expectations. The excess reserves increased largely due to higher deposit mobilization and loan collection of the banking system. Similarly, the number of insurance companies operating in the country increased to 12 from 10 a year earlier and their total number of branches reached 194. Their capital also went up by 12.1 percent and profits grew compared to last year. Regarding micro finance institutions, their number stood at 28 having a total capital and assets of Birr 1.7 billion and Birr 6.6 billion, respectively. Their deposit mobilization and credit provision activities surged 34.5 and 10.3 percent, depicting the growing developmental role they play in income generation, asset building and reducing poverty. As for external sector developments, the fiscal year 2008/09 witnessed a strong import, slower export of goods, growth in services and transfers and narrowing current account deficit. Export proceeds at USD 1.45 billion were about 1.2 percent lower relative to last year, well in contradiction to high average growth rates recorded in the preceding years. Poor export performance was attributed to lower export earnings from coffee, pulses, leather and leather products and fruits and vegetables, among others. On the other hand, export earnings from flower, oilseeds, meat and meat products, chat and gold, exhibited significant improvements relative to the preceding year. All in all, the ratio of exports to GDP dropped from 5.5 percent to 4.6 percent reflecting structural rigidities in export sector and lack of competitiveness. Yet, trade in services, particularly travel and transportation, surged as a result of increased conference tourism and air transport services. Total imports, on the other hand, increased by 13.2 percent to USD 7.7 billion from USD 6.8 billion in 2007/08 as all major components of imports, except fuel, showed upward trend. This was attributed to the steadily rising demand of the economy despite higher commodity prices in the international market. But, the share of imports in total GDP slightly dropped to 24.5 percent from 25.6 percent a year earlier partly reflecting tight fiscal and monetary policies. Both net public and private transfers exhibited growth in 2008/09, although private individual cash transfers declined by about 10 percent presumably due to economic melt down in developed countries where large majority of Ethiopian Diaspora reside. As a result, the country’s current account deficit (including public transfers) narrowed to 5.2 percent of GDP in contrast to 5.6 percent a year earlier. Ethiopia’s overall balance of payments also turned to a surplus of USD 376.8 million against a deficit of USD 263.5 million recorded last year.

National Bank of Ethiopia Annual Report 2008/09 4 With regard to foreign exchange market, the depreciation of the Birr in nominal effective terms was broad based. It depreciated by 12.7 percent against USD, and compared to all other major currencies including the Japanese Yen and SDR. Seen against indictors of international prices and external competitiveness, the real effective exchange rate of the Birr showed appreciation which led to measures to arrest its pace and mitigate the subsequent loss of competitiveness of the country’s exports. Money market in Ethiopia remained in doldrums. Treasury bills market, the sole active primary market in the country, has shown declines in terms of both the amount of bills sold and demanded due to modest participation of commercial banks in the auctions. Nonetheless, the yield across maturities (except for 21 day) improved from 0.67 to 0.80 percent. Interbank money market remained inactive since April 2008, and bond market, except on corporate bond, was absent. Sales of corporate bonds, however, grew as demand for large investments in infrastructure continued to increase. Cognizant of these facts, the National Bank of Ethiopia is undertaking studies as to how develop the financial market to better serve the economic agents and improve the payments system to enhance financial intermediation and economic transactions. Looking ahead, the Ethiopian economy is projected to rebound by 10.1 percent in 2009/10 as macroeconomic conditions continue to improve. Overall inflation will continue to decelerate towards single digit level as monetary policy and fiscal policy stance remain appropriately tight to regain macro economic stability and growth and to ensure healthy financial sector development. Due attention will also be given to improve external competitiveness using appropriate exchange rate policy, among others. Efforts will be made to shore up the level of international reserves by encouraging exports, inward remittances and FDI. To this end, close coordination between monetary and fiscal policies will continue to ensure macro economic stability and sustainable and accelerated growth in 2009/10 and beyond. Finally, I would like to express my gratitude to the management and staff of the Bank and all those who contributed to the realization of our objectives through 2008/09 and call upon them to do so in the years to come.

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 5 I. OVERALL ECONOMIC PERFORMANCE 1.1 Economic Growth Ethiopia’s economy continues to register high growth rates. Accordingly real GDP rose by 9.9 percent in 2008/09 in contrast to 1.1 percent estimate for Sub- Saharan Africa. This high growth rate, achieved for the sixth time in a row, was broad based and put Ethiopia among the top performing economies in Africa. The service sector, expanding by 14.0 percent, contributed about 63.4 percent to the overall real GDP while the agriculture and industry sectors increased by 6.4 and 9.9 percent, contributing 27.2 and 12.9 percent, respectively. The Ethiopian economy is projected to grow by 10.1 percent in 2009/10 compared to 6 percent estimate for Sub-Saharan Africa and 3.2 percent for the world. Table 1.1: Sectoral Contribution to GDP and GDP Growth (In millions of Birr unless otherwise indicated) Items Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Sector Agriculture & Allied Activities 29,920 34,990 39,728 44,062 48,225 51,843 55,141 Industry 9,332 10,419 11,402 12,561 13,757 15,137 16,635 Services 27,796 29,536 33,312 37,747 43,534 50,521 57,587 Total 67,049 74,945 84,443 94,371 105,517 117,502 129,364 Less FISM 462 548 639 896 1,018 1,323 1,627 Real GDP 66,586 74,397 83,804 93,474 104,499 116,178 127,737 Growth in Real GDP -2.1 11.7 12.6 11.5 11.8 11.2 9.9 Real GDP per capita 1,106.0 1,224.0 1,334.0 1,441.0 1,553.0 1,664.0 1,763.0 Share in GDP (in %) Agriculture & Allied Activities 44.9 47.0 47.4 47.1 46.1 44.6 43.2 Industry 14.0 14.0 13.6 13.4 13.2 13.0 13.0 Services 41.7 39.7 39.7 40.4 41.7 43.5 45.1 Growth in Real GDP per capita 7.8 10.7 9.0 8.0 7.8 7.1 5.9 Agriculture & Allied Activities Absolute Growth -10.5 16.9 13.5 10.9 9.4 7.5 6.4 Contribution to GDP growth -4.7 8.0 6.4 5.1 4.4 3.3 2.7 Contribution in % 224.5 67.9 50.8 44.5 36.9 29.9 27.6 Industry Absolute Growth 6.5 11.6 9.4 10.2 9.5 10.0 9.9 Contribution to GDP growth 0.9 1.6 1.3 1.4 1.3 Contribution in % -43.2 13.9 10.1 11.8 10.7 11.7 12.9 Services Absolute Growth 6.0 6.3 12.8 13.3 15.3 16.0 14.0 Contribution to GDP growth 2.5 2.5 5.1 5.4 6.4 7.0 6.3 Contribution in % -119.1 21.2 40.1 46.6 54.2 62.5 63.4 Source: Ministry of Finance and Economic Development and Staff computation

National Bank of Ethiopia Annual Report 2008/09 6 1.2 GDP by Sector -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Years Growth rates Grow th in real GDP Grow th in Agriculture Growth in Service In terms of sectoral distribution, service sector accounted for 45.1 percent of GDP, followed by agriculture (43.2 percent) and industry (13 percent). In general, the overall economic growth of the country was highly dictated by the performance of the agricultural sector. However, of recently, the role of the service sector in contributing to the growth of real GDP was significant (Fig.1.1).

Fig. I.1: GDP Growth by Major Sectors Source: Central Statistical Agency (CSA) The growth in agricultural outputs was largely attributed to improved productivity through better use of modern agricultural inputs, favorable weather condition and 2.3 percent expansion in cultivated land. Looking into the sub-components of agriculture, the crop sub-sector has always been the main driving force. The production of major crops including cereals, pulses and oilseeds increased by about 6.2 percent in 2008/09.

National Bank of Ethiopia Annual Report 2008/09 7 Table 1.2: Estimates of Agricultural Production and Cultivated Areas of Major Crops for Private Peasant Holdings - Meher Season (Area and production are in thousands of ha and quintals, respectively) Agricultural Production 2005/06 2006/07 2007/08 2008/09 Cultivated Area Total Production Cultivated Area Total Production Cultivated Area Total Production Cultivated Area Total Production Cereals 8,081.0 116,243.0 8,471.9 128,797.9 8,730.0 137,169.9 8,770.0 144,964.1 (Annual % Change) 5.7 15.8 4.8 10.8 3.0 6.5 0.5 5.7 Pulses 1,292.0 12,712.0 1,379.0 15,786.2 1,517.7 17,827.4 1,585.2 19,646.3 (Annual % Change) -4.2 -5.8 6.7 24.2 10.1 12.9 4.4 10.2 Oilseeds 797.0 4866.0 741.8 4970.8 707.6 6169.3 855.1 6,557.0 (Annual % Change) -3.3 -7.6 -6.9 2.2 -4.6 24.1 20.8 6.3 Total 10,170.0 133,821.0 10,592.8 149,555.0 10,955.3 161,166.6 11,210.3 171,167 (Annual % Change) 3.6 12.3 4.2 11.8 3.4 7.8 2.3 6.2 Source: CSA Note: Oilseeds, vegetables and root crops have been included as others since 2004/05 The non-agricultural sector of the economy altogether showed a 23.9 percent expansion during the review year as a result of the combined effect of 9.9 and 14.0 percent growth in industry and service sectors, respectively. The growth in industrial sector was mainly attributed to electricity and water sub-sector which rose by 5.7 percent owing to huge investments in the hydroelectric power generation and expansion activities. Manufacturing, which makes up for about 43 percent of the industrial sector value added, registered an annual growth rate of 9.4 percent. Mining and quarrying as well as the construction sub-sector also expanded by 12.8 and 11.7 percent, respectively. The share of the service sector has been growing steadily in the recent years reaching 45.1 percent in the review year from merely 36 percent in 1996/97. This was largely the outcome of the substantial growth of wholesale and retail trade, real estate, renting and various business activities; transport and communication as well as education sub-sectors.

National Bank of Ethiopia Annual Report 2008/09 8 1.3 GDP by Expenditure Component The share of consumption expenditure declined to 93.4 percent of GDP in 2008/09 from 96.8 percent in 2007/08 largely reflecting the slow down in private consumption expenditure from 87 percent to 85.2 percent during the same period. The ratio of gross domestic savings to GDP rose to 6.6 percent from 3.2 percent a year ago, yet domestic savings as percentage of GDP was almost one-third of the 19.3 percent estimate for Sub-Saharan Africa. Similarly, gross capital formation reached 22.4 percent of GDP against 21.2 percent a year earlier, although it is equal to the average estimate for SSA. The resource gap, slightly narrowed to 18.1 percent of GDP from 19.6 percent last year largely as a result of the slow down in imports. Table: 1.3: Expenditures on GDP and Gross Domestic Savings (As Percentage of GDP) Year 1996/97 D o m e s t i c Absorption Consumption Expenditure G r o s s C a p i t a l Formation Resource Balance Exports of Goods & Services Imports of Goods & Services G r o s s D o m e s t i c Savings Total Govt. Pvt. 1997/98 109.2 88.0 9.8

78.2

21.2

(7.6)

12.8 20.5 12.0 1998/99 113.9 92.0 15.6

76.4

21.9

(12.4)

11.6

24.0 8.0 1999/00 111.3 91.0 17.9

73.1

20.3

(11.9)

12.0

23.9 9.0 2000/01 111.5 90.0 14.6

75.4

21.5

(11.7)

12.0

23.7 10.0 2001/02 117.9 94.0 14.8

79.2

23.9

(14.0)

12.6

26.6 6.0 2002/03 117.8 96.0 13.4

82.6

21.8

(14.1)

13.3

27.4 4.0 2003/04 120.5 95.0 13.1

81.9

25.5

(16.7)

14.9

31.6 5.0 2004/05 120.0 97.0 12.3

84.8

23.0

(20.4)

15.1

35.5 3.0 2005/06 120.6 96.4 12.1

84.3

24.2

(22.7)

13.8

36.5 3.6 2006/07 118.5 93.7 10.4

83.3

24.8

(19.3)

12.7

32.1 6.3 2007/08 118.0 96.8 9.8

87.0

21.2

(19.6)

11.5

31.2 3.2 2008/09 115.8 93.4 8.2 85.2 22.4 (18.1) 10.5 28.6 6.6 Average: 1997/98- 116.2 93.6 12.7 80.9 22.6 -15.7 12.8 28.5 6.4 2007/08 Source: MoFED Based on the Newly Revised Series

National Bank of Ethiopia Annual Report 2008/09 9 1.4 Micro and Small-Scale Enterprises Developing micro and small-scale enterprises is one of the strategic objectives of the PASDEP program with a major focus being creating employment and generation of income for a wider group of the society. The major objective of this program which is creating and promoting MSEs in urban areas envisages to reduce urban unemployment down to less than 20% by the end of 2009/10. Accordingly, 713 MSEs were established in urban areas and created job opportunities for16,114 people in 2008/09. According to the Ministry of Works and Urban Development ( MoWUD), a total of 73,775 MSEs were established in 2008/09 employing 530,417 people. Among these MSEs, 73,062 were non-construction related that received about Birr 662.7 million in loans from micro finance institutions. Table: 1.4. Number, Amount of Credit and Jobs Created through MSEs by Region (Credit in Millions of Birr) Oromia Amhara SNNPR Tigray Harari Dire Dawa Addis Ababa Grand Total No. of MSEs 9,827 55,876 4,610 1255 _ 1494 73,062 Amount of Credit 67.3 110.3 135.4 110 3.6 6.2 229.9 662.7 Total Employment 179,031 136,114 32,238 48,423 _ 134,611 530,417 Percentage Share by Region No. of MSEs 13.45 76.48 6.31 1.72 0.00 2.04 100.00 Amount of Credit 10.16 16.64 20.43 16.60 0.54 0.94 34.69 100.00 No. of Total Employment 33.75 25.66 6.08 9.57 25.38 100.00 Source: MoWUD Regarding regional distribution, about 76.5 percent of the total MSEs were located in Amhara, followed by Oromia (13.5%), SNNPR (6.3), Addis Ababa (2.0 percent) and Tigray (1.7). Of the total credit disbursed through MFIs, Addis Ababa accounted for 34.7 percent SNNPR, 20.4 percent, Amhara 16.6 percent, Tigray 16.6 percent, Oromia 10.2 percent and Harari 0.54 percent.

National Bank of Ethiopia Annual Report 2008/09 10

Source: MoWUD Fig I.2 Regional Share of Number of MSEs and Amount of Credit Allocation during 2008/09 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 In % No.of MSEs Amount of Credit No.of MSEs 13.45 76.48 6.31 1.72 2.04 Amount of Credit (In million Birr) 10.161 6.64 20.43 16.60 0.54 0.54 34.69 Oromia Amhara SNNPRT igray Afar Gambell a Ben.Gu mz SomaliH arari Dire Dawa Addis Ababa

National Bank of Ethiopia Annual Report 2008/09 11 1.5 Mining By 2008/09, the geological mapping coverage reached 46.1 percent, slightly lower than the target coverage of 50 percent in the PASDEP. The mapping coverage of hydrogeological, geographical and engineering geological coverage was 35.3, 80 and 9 percent, respectively, vis-à-vis the target coverage of 39, 77 and 14 percent. Table 1.5 Mapping Coverage (In % ) Type of Map Fiscal Year 2007/08 2008/09 PASDEP Target Performance PASDEP Target Performance Geological Map Coverage 47 43.4 50 46.1 Hydro Geological Coverage 36 33.3 39 35.3 Geophysical /Gravity Study Coverage 74 77 77 80 Engineering Geological Coverage 12 10 14 9 Source: Ministry of Mines and Energy and NBE Staff Computation Meanwhile, the Ministry of Mines and Energy issued a total of 161 licenses to investors with an aggregate capital of Birr 11.7 billion engaged in the prospecting, exploration and mining activities. Of the total capital, Birr 509.6 million was injected into the petroleum project alone. Upon going fully operational, the mining and petroleum development projects are expected to create jobs for more than 1,940 people. In addition, some 48 artisanal associations were organized in four regional states.

National Bank of Ethiopia Annual Report 2008/09 12 The total amount of minerals exported during the stated period increased by 11.6 percent in 2008/09 over the preceding year. Accordingly, foreign exchange earned slightly rose to USD106.7 million from USD 99.5 million a year ago, revealing a 7.2 percent annual increment Regarding percentage share of exported minerals by type, tantalite concentrate accounted for 98 percent, followed by gold (1.7 percent) and rough gemstones, (0.3 percent) Table: 1.6 Amount of Mineral Exported and Revenue Generated (Amount in k.g. and Revenue in millions of USD)

Mineral Type 2007/08 2008/09 Percentage A B C D Change Amount Revenue Amount Revenue C/A D/B Gold 4,428 _ 3585.1 _ -19.0 _ Rough Gemstones 751.1 _ 658 _ -12.4 _ Platinum Concentrate 10.3 _ NA _ _ Tantalite Concentrate 183246 _ 206000 _ 12.4 _ Total 188435 99.5 210243.1 106.7 11.6 7.2 Source: Ministry of Mines and Energy and NBE Staff Computation Note: Revenue is not disaggregated by mineral type

National Bank of Ethiopia Annual Report 2008/09 13 1.6 Developments in Education Sector The education sector has witnessed a great leap forward over the past years both in terms of coverage as well as quality. Accordingly, the enrolment of primary education (1-8 grades) increased from 8.7 million in 2002/03 to 15.3 million in 2007/08. The number of primary schools reached 23,354 showing a 87.3 percent growth over 2002/03. Of the total primary schools, 86.7 percent were located in the rural areas where about 85 percent of the total population resides. Secondary education enrolment stood at 1.5 million, 126 percent higher than that of 2002/03. During the stated period, the number of secondary schools (9-12 grades) surged by 121.4 percent to 1087 of which about 83 percent were found in urban areas. Technical and Vocational Education and Training (TVET) enrolment reached 229, 000, which was 217 percent higher than six years ago. TVET admission capacity has also increased to 96,000. Besides, the number of TVET institutions rose to 458 compared to 153 in 2002/03 showing a 18 percent annual growth. The number of universities reached 22 by end 2007/08. The number of higher learning institutions including universities and colleges sharply grew to 61 in 2007/08 (369 percent growth) with admission of 59,324-degree programme students. In 2007/08, about 22.8 percent of the national budget was channeled to education sector.

National Bank of Ethiopia Annual Report 2008/09 14 Table 1.7 Education Sector Developments INDICATORS 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 1995 1996 1997 1998 1999 2000 Improvement of Education Service

1. Number of primary schools (urban, rural) 12,471 13,181 16,513 19,412 20,660 23,354 • Urban NA 2,680 3,100 • Rural NA 17,980 20,254
2. Number of secondary schools (urban, rural) 491 595 706 835 952 1,087 • Urban NA 803 904 • Rural NA 149 183
3. Number of TVET centres (public, private, mission) 153 158 199 264 388 458
4. Number of tertiary level institutions including universities (public, private), & colleges (public, private) 13 21 23 40 55 61
5. universities NA 21 22
6. Student intake capacity of higher education institutions NA 43,764 56,421
7. Participation of women in higher education institutions (%) NA 26 24
8. Primary enrolment (in million) 8.7 9.5 11.4 12.7 14.0 15.3
9. Secondary enrolment (in thousands) 665.0 781.0 953.0 1190 1,399 1,501
10. TVET enrolment 72,162 87,158 106,336 123,557 191,151 229,252
11. Girls’ primary enrolment(%) 41.2 42.6 44.2 45.2 45.9 46.5
12. Grades (1-4) gross enrolment ratio(%) 84.2 86.9 102.7 117.6 117.1 127.8 • Girls’ gross enrolment ratio (%) 73.5 78.3 95.5 111.2 111.2 122.8 • Boys’ gross enrolment ratio (%) 94.6 95.2 109.8 123.9 122.9 133.0
13. Grades (5-8) gross enrolment ratio(%) 42.4 47.1 52.5 58.8 61.1 60.2 • Girls’ gross enrolment ratio(%) 31.9 36.9 42.6 49.8 53.7 55.5 • Boys’ gross enrolment ratio (%) 52.5 57 62 67.4 68.3 64.8
14. Girls’ gross primary enrolment ratio (%) 53.8 59.1 71.5 83.9 85.1 90.5 • Boys’ gross primary enrolment ratio (%) 74.6 77.4 88 98.6 98 100.5
15. Gross Primary Enrolment ratio (%) (urban, rural, regional) 64.4 68.4 79.8 91.3 91.7 95.6 • Tigray 73.7 80.6 91 101.5 104.8 109 • Afar 13.8 14.8 20.9 21.9 22.2 26.2 • Amhara 58.5 61.8 75.9 93 93.1 112.4 • Oromia 66.9 72.7 87.5 97 91.4 91.4 • Somali 15.1 15.1 23.3 30.3 38.5 32.7 • Benshangul Gumuz 98.4 100.5 107.4 122.5 127.9 112.3 • SNNPR 71.8 74.2 78.9 89.4 97.8 102.9 • Gambella 124.6 106.6 127.4 137.1 181.4 121.4 • Harari 105.7 104.5 92.4 103.1 116.8 108.4 • A.A 135.4 142.6 150.2 162 146.6 114.3 • Dire Dawa 78.6 83.2 83.9 79 80 86.3
16. • Primary net enrolment rate(%) 54 57.4 68.5 77.5 79.1 83.4

National Bank of Ethiopia Annual Report 2008/09 15 …Table 1.7, continued INDICATORS 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 1995 1996 1997 1998 1999 2000 17. No. of students registered in the first cycle primary schools(1-4) (in million) 6 6.5 8 8.7 9.8 10.7 18. No. of students registered in the second cycle primary schools(5-8) (in million) 2.7 3 3.4.2 4.6 19. Number of students registered in the first cycle secondary schools(9-10) (in million) 0.6 0.7 0.9 1.1 1.2 1.3 Gross enrolment rate in (9-10 grades)(%) 19.3 22.1 27.3 33.2 37.3 37.1 20. Number of students registered in the second cycle secondary schools(11-12) (in million ) 0.08 0.095 0.092 0.1 0.2 0.2 • Preparatory admission NA 101,367 100,651 • TVET Admission • Degree programme admission NA 94,592 NA 99,430 44,038 95,563 59,324 21. •   Completion rate of primary school (%) 23.5 27.1 34.3 41.7 42.9 44.7 22. •    Girls/boys ratio in primary schools(%) 70 74 79 83 85 87 23. • Girls/boys ratio in secondary schools(%) 55 52 53 54 59 63 •      Girls/boys ratio in(9-10) 0.58 0.55 0.55 0.57 0.61 0.65 •    Girls/boys ratio in (11-12) 0.4 0.37 0.37 0.35 0.49 0.48 •  Girls/boys ratio in TVET 0.93 0.9 1.05 1.01 0.78 0.92 24. Girls/boys ratio in higher education 0.18 0.2 0.24 0.24 0.25 0.24 •  Primary(Grade 1-8) repetition rates (%) 6.7 3.7 3.8 6.1 6.2 NA • Primary school dropout rate (%) 19.2 14.8 11.8 12.4 12.4 NA • 1st grade dropout rate (%) NA 31.4 22.4 20.6 20.1 18.3 • Text book/pupil ratio for core subjects for grade 1-8 NA 1.5 NA • Pupil/teacher ratio i. Grade (1-8) 64 65 66 62 59 57 ii. Grade (9-12) 45 48 51 54 48 43 iii. TVET 25 22 21 20 27 25 iv. In higher education 13.7 20.5 28.5 35.9 24.3 NA • Pupil/section ratio i. Grade (1-8) 73 74 69 69 64 62 ii. Grade (9-12) 77 79 78 82 79 74 •    Number of class rooms in primary schools 117,988 126,368 161,795 183,088 206,106 237,441 • Pupil-textbook ratio i. Grade(1-8) NA 1.5 1.5 ii. Grade(9-12) NA 1 1 • Pupil-school ratio i. Grade(1-8) 701.1 724 693.3 652 678.3 657 ii. Grade(9-12) 1,355 1,312 1,350 1,425 1,449 1381

iii. TEVT 472 552 534 468 493 501

National Bank of Ethiopia Annual Report 2008/09 16 …Table 1.7, continued INDICATORS 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 1995 1996 1997 1998 1999 2000 •     Annual education share of the national budget 16.07 20.35 16.7 17.82 24.6 22.8 •  Proportion of pupils starting grade 1 who reach grade 5(%) NA 56.8 NA NA • Percentage of female enrolled in under graduate degree (%) 18.1 20.8 24 24.8 26 24.1 • Percentage of female graduated in under￾graduate degree (%) 11.2 15.2 16.4 16.2 18 20.7 • Percentage of female enrolled in post￾graduate degree 6.9 6.7 9.2 10.5 • Percentage of female graduated in post￾graduate degree 8.9 7.1 9 9.8 9.4 10.7 Source: Education Statistics Annual Abstract, Ministry of Education and NBE Staff Computation

National Bank of Ethiopia Annual Report 2008/09 17 1.7 Access To Water Supply In the Plan for Accelerated and Sustainable Development to End Poverty (PASDEP) it was planned to raise the total population with access to safe drinking water (rural and urban) from 51.5 percent in 2005/06 to 84.5 percent by the end of 2009/10. Similarly, urban population with access to potable water within 0.5 km radius was expected to pick up to 92.5 percent from 80.7 percent and that of rural population within 1.5km to 80 percent from 44 percent in 2005/06. Accordingly, in 2008/09 the overall national access to water supply reached 66.2 percent (i.e., 88.6 percent for urban and 61.5 percent for rural), indicating a 13.7 percentage points increase over 2007/08. At the same time, urban population with access to potable water within 0.5 km radius grew from 86.2 to 88.6 percent. And, rural population with access to potable water within 1.5 km radius reached 61.5 percent at the end of 2008/09 in contrast with 53.9 percent a year ago. Table: 1.8 Percentages of People with Access to Potable Water by Region 2007/08 2008/09 Change in Percentage Point A B C D E F Region Rural Urban Average Rural Urban Average D-A E-B F-C Addis Ababa _ 95.4 95.4 95.0 95 _ 0.58 0.58 Tigray 56 72 59.1 80.0 76.8 79.4 24.0 16.8 26.6 Amhara 49 87.7 53.7 59.3 90.1 63.1 10.3 8.1 15.1 Oromia 52 97.9 58.3 57.6 94.0 62.1 5.6 3.6 11.2 SNNPR 63 72.1 63.6 74.2 74.9 74.3 11.2 8.9 15.3 Afar 53.1 77.4 55.4 58.4 77.7 61.0 5.3 4.7 8.02 Somali 32.9 61.6 37.9 33.5 76.5 39.5 0.6 16.5 10.06 Ben-Gumuz 44.3 93.1 49.3 51.5 84.7 56.3 7.2 -0.86 3.97 Harari 41 27.5 32.5 56.0 72.0 64.7 15.0 51 40.57 Gambella 43.9 98.6 54.7 44.6 71.5 51.4 0.7 -1.4 -2.31 Dire Dawa 75.8 72 73 75.8 94.0 88.2 0 22 17.99 National Average 53.9 86.2 59.5 61.5 88.6 66.2 7.6 6.58 13.74 Source: Ministry of Water Resources (MoWR) and NBE Staff Computation Note: Water supply access is calculated based on the provision of 20 liters/capital/day for urban and also 15 l/c/d for rural at a radius of 0.5 and 1.5 kilo meters, respectively.

National Bank of Ethiopia Annual Report 2008/09 18 Source: Ministry of Water Resources (MoWR) Fig. I.4Access to Water Supply by Region 0 10 20 30 40 50 60 70 80 90 100 Addis Ababa Tigray Amhara Oromia SNNPR Afar somali Ben￾Shangul Gumuz Harari Gambella Dire Dawa Regions 2007/08 2008/09 Average Values in %

National Bank of Ethiopia Annual Report 2008/09 19 1.8 Transport Sector Development 1.8.1 Road Transport During 2008/09, the Ethiopian road network reached 46,812 km (45 percent Federal and 55 percent rural) with annual expansion rate of 5.5 percent as a result of 2,453 km new roads being constructed. Of the total 21,172 km Federal roads, asphalt road constituted 33 percent whilst gravel roads reached 67 percent. Moreover, the share of the total asphalt (paved) road amounted to 15 percent of the total road network; slightly higher than the preceding year. The community road, which was not calculated as part of the total road network (as it was non-engineered road) was 85,767 km showing a 22 percent growth over last year. During the review year, road density per 1,000 sq.km was 42.6 kilometers. Likewise, the road density per 1000 population was 0.57 kilometers. All-weather road (rural road) expanded by 7.1 percent per annum constituting 55 percent or 25,640 km of the total road network in 2008/09. Besides, the annual average distance from all-weather roads declined by 4.8 percent to 11.8 kilometers. Similarly, the proportion of area more than 5 km from all weather roads which was 66.8 percent in 2007/08 went down to 65.3 percent in 2008/09 though the PASDEP projection for 2008/09 was 59 percent. Fig.1. Status of Roads 0 10 20 30 40 50 60 70 80 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 % • Asphalt Roads in Good Condition • Gravel Roads in Goods Condition • Rural Roads in Good Condition • Total Roads Network in Good Condition Source: Ethiopian Roads Authority and NBE Staff Computation

National Bank of Ethiopia Annual Report 2008/09 20 Source: Ethiopian Roads Authority and NBE Staff Computation About 54 percent of the total road network in the country was found in good condition. Figure 2 depicts that the cumulative investment capital in the road construction and expansion sector had been steadily Fig.2. Investment in Road Construction and Expansion 0 2000 4000 6000 8000 10000 12000 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 In Millions of Birr • Federal Road • Regional Road • Community Road • Urban Road • Total Road Investment rising over the last eight years reaching Birr 10.9 billion in 2008/09. Investment in the Federal road construction and expansion also reached Birr 9.8 billion making up the lion’s share of the total road investment capital.

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 21 II. ENERGY PRODUCTION 2.1 Electric Power Generation Ethiopia has immense potential for hydroelectric power and geothermal energy generation. Nine of its major rivers are suitable for hydroelectric power with a total capacity of generating 45,000 MW. The country has also vast potential for geothermal energy generation. Despite such huge resources, the country has so far managed to utilize merely 1,113 MW of its power generating potential and only about 33 percent of the population has access to electricity. The Ethiopian Electric Power Corporation (EEPCo) is a public enterprise mandated with the task of generating, transmitting, distributing, and selling electricity. The Corporation generates electricity through two different power supply systems, namely, the Interconnected System (ICS) and Self Contained System (SCS). The ICS, which is largely generated by hydropower plants, is the major source of electric power in Ethiopia, the SCS system merely contributing about 1.0 percent in 2008/09. Fig.II.1 Trends in share of ICS and SCS in Total Power Generation 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Year Share in % ICS share in% SCS share in% ICS share in% 96.5 96.2 96.2 98.0 98.0 98.3 99.1 99.1 98.6 98.2 98.2 98.8 99.2 99.0 SCS share in% 3.5 3.8 3.8 2.0 2.0 1.7 0.9 0.9 1.4 2.0 1.8 1.2 0.8 1.0 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Source: Ethiopian Electric Power Corporation (EEPCo)

National Bank of Ethiopia Annual Report 2008/09 22 The total amount of electric power generated during 2008/09 was 3,702.6 million KWH, 4.9 percent higher than last year. Some 88.7 and 11.1 percent of the electric power was generated through hydropower and thermal power, respectively while the remaining (0.20 percent) came from geothermal source (Table II.1). As per the government’s five year plan for accelerated and sustained development to end poverty (PASDEP), it is envisaged to step up the electric power generation capacity of the country by finalizing the power projects currently under construction as well as building new ones, with the aim of expanding the coverage to rural towns and kebeles. By 2010, when the power generation projects such as Tekeze (300 MW), Gilgel Gibe II (420 MW), Amerteneshe (97 MW), Beles (460 MW) and windpPower (170 MWH) are completed, the country’s power generation capacity is expected to reach about 2,260 MW per hour and the total demand to 5,000 GWH. The number of cities and towns accessing electric power services is also planned to reach 6,000 from the current 3,339. Table 2.1 Electric Power Generation in ICS and SCS (i n 000 KWH) Source 2006/2007 2007/2008 2008/2009 Percentage Change [A] [B] [C] [C/A] [C/B] Hydro Power 3,259,789.0 3,368,682.0 3,277,138.0 0.5 -2.7 Thermal Power 9,713.0 131,769.0 380,416.0 3816.6 188.7 Geothermal - 6581.0 - - ICS Sub Total 3,269,502.0 3,500,450.0 3,664,134.0 12.1 4.7 Hydro Power 5,238.0 2,733.0 7928.0 51.4 190.1 Thermal Power 35,653.0 27,097.0 30542.0 -14.3 12.7 Geothermal - - - - - SCS Sub Total 40,891.0 29,830.0 38470.0 -5.9 29.0 Hydro Power 3,265,027.0 3,371,415.0 3,285,066.0 0.6 -2.6 Thermal Power 45,366 .0 158,865.0 410,958 805.9 158.7 Geothermal - 6,581.0 - - Total Grand total 3,310,393.0 3,530,280.0 3,702,605.0 11.8 4.9 Source: EEPCo

National Bank of Ethiopia Annual Report 2008/09 23 2.2 Volume and Value of Petroleum Imports In 2008/09, a total of 1,971.9 million metric tons of petroleum products worth Birr 12,782.2 million were imported into the country by the Ethiopian Petroleum Enterprise (EPE). The import value was 14.8 percent lower than that of the preceding fiscal year on account of the continuous drop in the international oil prices. Component wise, the value of imports of regular gasoline, jet fuel, fuel oil and gas oil fell by 20.4, 12.4, 20.8 and 14.8 percent, respectively. In volume terms, petroleum imports rose 3.2 percent in 2008/09 despite declines in the volume of fuel oil and gasoline. Table 2.2. Volume and Value of Petroleum Imports Table: Volume and Value of Petroleum Imports (Volume in MT and Value in Thousand Birr) Products 2007/08 2008/09 Percentage Volume Value Volume Value Change [A] [B] [C] [D] [C/A] [D/B] Regular Gasoline (MGR) 144,505 1,118,495 142,983 890,747 -1.1 -20.4 Jet Fuel 492,084 4,189,310 505,701 3,671,264 2.8 -12.4 Fuel Oil 180,993 847,557 152,704 671,463 -15.6 -20.8 Gas Oil (ADO) 1,093,805 8,855,755 1,170,531 7,548,767 7.0 -14.8 Total 1,911,387 15,011,117 1,971,919 12,782,241 3.2 -14.8 Source: EPE

National Bank of Ethiopia Annual Report 2008/09 24 Fig. II.2 Trends in Volume of Petroleum Imports

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year Volume In MT MGR Jet Fuel Fuel Oil Gas Oil Source: EPE Source: EPE Fig. II.3 Trends in Value of Petroleum Imports 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year Value in '000 Birr MGR Jet Fuel Fuel Oil Gas Oil

National Bank of Ethiopia Annual Report 2008/09 25 Generally, the domestic retail prices of petroleum products are adjusted monthly in line with the movements of oil prices in the world market. The retail prices of MGR, fuel oil, gas oil and kerosene were adjusted upward in the review period. As a result, the average domestic prices of all petroleum products increased over the preceding fiscal year. In Addis Ababa, the average retail prices of these products rose by 6.2-8.9 percent. Table 2.3 Quarterly Average Retail Prices of Petroleum Products in Addis Ababa (Birr / liter) Quarter MGR Fuel Oil Gas Oil Kerosene 2004/05 Qtr.1 5.00 2.89 3.40 2.50 Qtr.2 5.30 3.21 3.90 2.80 Qtr.3 5.50 3.43 4.30 3.00 Qtr.4 5.50 3.43 4.30 3.00 Average 5.31 3.24 3.98 2.83 2005/06 Qtr.1 5.50 3.40 4.30 3.00 Qtr.2 5.50 3.40 4.30 3.00 Qtr.3 5.50 3.40 4.30 3.00 Qtr.4 6.20 3.90 4.60 3.30 Average 5.68 3.53 4.38 3.08 2006/07 Qtr.1 7.60 4.20 5.20 3.90 Qtr.2 8.00 5.60 5.40 4.10 Qtr.3 7.70 5.20 5.40 4.10 Qtr.4 7.70 5.20 5.40 4.10 Average 7.80 5.00 5.40 4.10 2007/08 Qtr.1 7.80 4.10 5.40 4.10 Qtr.2 7.80 4.10 5.40 4.10 Qtr.3 9.60 5.90 6.90 5.70 Qtr.4 9.60 5.90 6.90 5.70 Average 8.70 5.00 6.20 4.90 2008/09 Qtr.1 9.61 5.89 6.90 5.72 Qtr.2 9.61 7.40 9.40 7.50 Qtr.3 8.14 5.90 7.81 6.00 Qtr.4 8.20 5.80 7.30 5.70 Average 8.89 6.25 7.85 6.23 Source EPE

National Bank of Ethiopia Annual Report 2008/09 26 Fig. II.4 Quarterly Average Retail price of petrolium products in Addis Ababa (Birr/Liter) 0 2 4 6 8 10 12 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 Qtr.1 Qtr.2 Qtr.3 Qtr.4 2004/05 Average 2005/06 Average 2006/07 Average 2007/08 Average 2008/09 Average Year Value in Birr/Liter MGR Fuel Oil Gas Oil Kerosene Source: EPE

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 27 III. TELECOMMUNICATIONS The Ethiopian Telecommunications Corporation (ETC), which is a state-owned telecom company, provides national and international telecommunications services using various media of communication. Currently, ETC is serving the public with its 994 public stations and exchanges, which showed a 2.9 percent annual growth over the last year. Accordingly, the total number of fixed telephone subscription (residential, business, government and others) increased by 2 percent to 915,058; while the number of waiting list for fixed telephone subscribers decreased by 2.4 percent to 18,548 in 2008/09 (Table 3.1). Similarly, the number of mobile telephone subscribers reached 4,051,703 demonstrating a 107.3 percent growth over last year. Internet subscription also went up from 34,110 in 2007/08 to 74,557 in the review year registering a 118.6 percent increase. Hence, the country’s telecommunication penetration rate (Tele-density excluding mobile or the number of telephone subscribers per 100 inhabitants) slightly rose from 1.15 to1.2 in the review year. Including mobile subscription, however, the penetration rate goes up to 3.6 per 100 inhabitants. According to the country’s five-year development plan (PASDEP), the number of fixed line subscribers is to pick up from 830,000 in 2005/06 to 3.2 million by the end of 2009/10. At the same time, the number of mobile subscribers and Internet users is also envisaged to rise to a 6.76 million and 193,100 respectively by the end of the plan period from 1.465 million and 48,970.

National Bank of Ethiopia Annual Report 2008/09 28Table 3.1 SUMMARY OF BASIC TELECOM STATISTICS [1985 - 2001 E.F.Y (1992/93 - 2008/2009 G.C)] 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Average Annual Growth Annual Growth No. ITEMS 1992/93) 1993/94) 1994/95) 1995/96) 1996/97) 1997/98) (1998/99) (1999/00) 2000/01) (2001/02 (2002/03 (2003/04) (2004/05) (2005/06) (2006/07) (2007/08 1 PUBLIC STATIONS & EXCHANGES(1.2+1.3+1.5) 475 486 512 536 548 563 573 606 649 700 770 784 865 904 919 966 4.8 5.1 1.1 Automatic Exchanges 36 37 40 44 47 53 82 112 129 150 156 171 273 423 511 540 19.8 5.7 1.2 Automatic Stations 22 23 26 30 32 37 58 79 93 105 122 142 242 391 475 510 23.3 7.4 1.3 Manual Exchanges(Stations) 375 388 403 390 382 356 347 341 335 256 136 92 86 (9.4) (6.5) 1.4 Manual Stations with Semi-Auto. facility 55 74 113 153 155 175 181 331 259 306 313 310 239 131 90 78 2.4 (13.3) 1.5 Pay Stations & R.R.C 78 75 83 103 113 123 125 145 200 248 307 307 368 378 352 370 10.9 5.1 1.6 Total Exchange Capacity 169622 172742 179094 190177 196322 211108 372885 458247 511474 600337 649593 722548 872,228 1,022,399 1,123,281 1,146,555 13.6 2.1 1.7 Automatic Exchange capacity 142756 143756 150556 161180 167252 182911 348644 433299 490724 579,589 629,477 703,160 857,374 1,016,111 1,120,071 1,143,525 14.9 2.1 1.8 Manual Exchange capacity 26866 28986 28538 28997 29070 28197 24241 24948 20750 20,748 20,116 19,388 14,854 6,288 3,210 3,030 (13.5) (5.6) 1.9 % Digital by Capacity - 37.20 35.88 34.33 34.82 40.51 67.49 73.60 80.30 83.22 89.64 97.18 98.30 99.38 99.71 99.74 7.3 0.0 1.10 % Digital by Total Connected Lines / DEL / - 39.34 38.87 38.15 37.95 39.88 51.98 61.90 74.02 80.9 89.9 97.80 93.84 98.24 99.82 99.82 6.9 (0.0) 2 SUBSCRIPTION 2.01 Telephone Subscriber Lines 132478 137731 142452 148739 156538 164140 194494 231945 283683 353,816 404790 484368 610,347 725,046 880,088 897,287 13.6 2.0 2.02 Waiting list for telephone 141035 160939 178992 193499 206562 230225 224788 196883 155208 139,095 146,062 156,963 58,755 56,053 13,579 19,013 (12.5) 40.0 2.03 DEL’s 136102 141650 146566 153001 160861 168639 199474 238495 290887 361,688 413,186 494,008 620,661 738,805 894,337 912,695 13.5 2.1 2.04 PBX’s 1251 1271 1317 1338 1476 1544 1615 1241 1419 1386 1322 1348 - - - - 0.5 2.05 Coin Boxes 988 997 1005 1010 1008 1014 1016 957 935 1,610 1,759 1,813 2,585 4,294 4,718 4,944 11.3 4.8 2.06 Number of subscriber’s facsimile 745 1039 1424 1604 2012 2476 3010 3555 3858 4231 4601 4925 - - - - 18.3 2.07 Number of facsimile machines 762 1057 1445 1624 2038 2502 3034 3594 3890 4271 4649 4978 - - - - 18.6 2.08 Number of Internet Subscribers - - - - 1042 2068 2163 2461 4073 6740 9534 12155 17,710 25,724 31,400 34,110 37.3 8.6 2.09 Mobile Telephone Subscription - - - - - - 6740 17757 27532 42910 51234 155,534 410,630 866,700 1,208,498 1,954,327 87.8 61.7

National Bank of Ethiopia Annual Report 2008/09 29 . . . Table 3.1 Continued 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Average Annual Growth Annual Growth No. ITEMS 1992/93) 1993/94) (1994/95 1995/96) 1996/97) 1997/98) (1998/99) (1999/00) (2000/01) (2001/02) (2002/03) (2003/04) (2004/05) (2005/06) (2006/07) (2007/08) 2.10 Percentage of lines residential/ business 62.4/19.6 63.4/17.7 62/18 62/19 62/20 61/20 62/19 63/20 67/19 70/17.7 70.5/16.5 72.5/16.6 74/16.5 74.8/16.5 73.2/14.9 75.6/15.5 - 2.11 Number of Digital Data Circuits - - - - - - - - - - 129 178 - - -

• 38.0 2.12 Number of Digital Data Customers - - - - - - - - - - 65 91 - - -
• 40.0 2.13 Number of Rural Kebeles - - - - - - - - - - - - 60 4,837 7,389 8,676 424.9 17.4 3 TELEPHONE TRAFFIC (millions) 3.1 Metered -Pulses 470.8 523.6 540 568.3 619.45 704.4 786.42 1010.21 1253.41 1573.99 1890.37 2,225.14 2,341.99 2,475.56 2,714.31 2,715.07 12.4 0.03 3.2 Metered -CDR * 344.60 346.11 0.4 0.4 3.3 Interurban calls (via operator) 3.7 4.4 5.4 6.08 6.65 7.22 6.78 7.72 10.37 12.73 14.18 15.57 - - -
• 14.0 3.4 International calls (OG) 2.8 3.1 3.1 3.41 3.56 3.94 4.08 4.36 4.62 4.62 4.93 6.67 8.57 11.48 5.73
• 11.4 3.5 International minutes (OG) 10.9 11.5 10.5 10.35 10.69 11.84 12.45 13.42 13.42 12.88 14.31 17.70 20.59 28.68 15.95 27.10 6.3 13.0 3.6 International calls (IC) 4.09 4.49 5.45 6.47 6.76 7.11 8.15 7.68 8.63 8.71 - - - - -
• 8.8 3.7 International minutes (IC) 22.88 23.17 26.15 32.5 38.14 38.8 38.59 36.73 42.71 35.56 54.81 133.68 199.12 240.01 289.09 504.90 22.9 60.0 4 Mobile Telephone and Internet Traffic 4.1 Mobile -Local (million mins.) - - - - - - - 26.76 60.80 77.01 120.75 165.76 N.A. N.A. N.A. 57.8 4.2 Mobile -International (million mins.) - - - - - - - 1.41 2.43 2.45 3.34 3.83 N.A. N.A. N.A. 28.4 4.3 Internet Traffic ( ‘ 000 hours ) - - - - - - - 334.60 577.11 622.05 2,325.33 3,285.74 N.A. N.A. N.A.
• 77.0 5 TELEGRAPH MESSAGES (Thousands) - 5.1 National 152.4 153.5 165.9 183.3 158.2 124.3 126 107.2 102.6 85.9 80.3 64.34 55.04 - -
• (8.1) 5.2 International (OG) 5 3 3 2.7 2.3 1.6 1.2 1.4 0.66 0.41 0.95 0.36 0.11 - - (27.3) 6 INTERNATIONAL CIRCUITS 6.1 Satellite Telephone Circuits 247 346 345 369 350 386 386 380 427 430 514 802 1,816 1,749 1,756
• 15.0 6.2 Microwave Telephone Circts 49 91 91 186 193 25 25 26 53 53 109 109 137 167 167
• 9.2 6.3 Submarine Cable 18 18 24 - - - 25 73 102 101 250 578 1,018 33.4

National Bank of Ethiopia Annual Report 2008/09 30 . . . Table 3.1 continued 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Average Annual Growth Annual Growth No. ITEMS ( 1992/93) 1993/94) (1994/95 1995/96) 1996/97) 1997/98) (1998/99) (1999/00) (2000/01) (2001/02) (2002/03) (2003/04) (2004/05) (2005/06) (2006/07 (2007/08 7 PERSONNEL Male 3434 3352 3514 3470 3582 3861 4267 4607 4868 5058 5416 5987 6,763 7,764 8,087 8,712 6.4 7.7 Female 1862 1870 1982 1993 2037 2225 2306 2476 2502 2522 2497 2632 3,015 3,470 3,557 3,548 4.4 (0.3) Total 5296 5222 5496 5463 5619 6086 6573 7083 7370 7580 7913 8619 9,778 11,234 11,644 12,260 5.8 5.3 8 FINANCE 8.1 Income (Millions Birr) 253.40 292.10 445.80 496.73 551.80 624.34 624.09 720.37 932.19 914.82 1042.66 1241.76 1,813.80 2,155.04 N.A. 3,292.25 18.6 20.0 8.2 Expense (Millions Birr) 154.30 179.20 194.46 199.98 222.30 280.86 285.64 371.12 718.74 468.40 487.43 638.42 820.26 1,499.60 N.A. 951.74 12.9 13.4 8.3 Gross Profit (Millions Birr) 99.10 112.90 251.34 296.75 329.50 343.48 338.45 349.25 213.45 446.42 555.23 603.34 993.54 655.44 N.A. 2,340.51 23.5 22.9 8.4 ASSETS (Millions Birr) 8.5 Fixed Gross (Millions Birr) 536.80 573.20 603.49 695.34 731.35 837.47 911.46 1218.92 1611.42 1818.60 2340.06 2596.34 2,806.21 2,843.80 N.A. 4,667.90 15.5 24.7 8.6 Depreciation (Millions Birr) 302.10 326.10 348.65 376.35 408.26 442.62 483.4 544.72 630.09 748.28 918.89 1084.14 1,256.37 1,430.73 N.A. 1,595.66 11.7 2.0 8.7 Net Asset (Millions Birr) 234.70 247.10 254.84 318.99 323.09 394.85 428.08 674.20 981.33 1070.32 1421.17 1512.20 1,549.84 1,413.07 N.A. 3,072.25 18.7 41.1 9 Population /in millions/ 51.43 53.02 54.65 56.37 58.12 59.88 61.67 63.49 65.3947 67.22 69.13 71.10 73.2 75.2 77.1 79.4 2.9 3.0 10 Teledensity 0.26 0.27 0.27 0.32 0.37 0.43 0.53 0.59 0.68 0.83 0.98 1.16 1.15 10.5 (0.9) 11 Teledensity (Fixed + Mobile) - - - - - - 0.33 0.39 0.48 0.59 0.66 0.90 1.39 2.14 2.73 3.61 30.6 32.4 Source: Ethiopian Telecommunications Corporation (ETC), Annual Statistical Bulletin, 2007/08 Note:- Average annual growth rate is computed for the years 1992/93-2007/08 E.F.Y. *The traffic of CDR-10 and AXE-10 exchanges measured in pulses whereas of the remaining exchanges measured in CDR. -Figures in bracket in the annual growth column show declines.

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 31 IV. PRICE DEVELOPMENTS 4.1 Developments in Consumer Price at National Level By the end of 2008/09 annualized1 average headline inflation was 36.4 percent, somewhat higher than 25.3 percent a year earlier, although it tended to slow down since March 2009. Annualized average food inflation reached 44.3 percent, and core inflation, proxied by non-food inflation, was 23.8 percent (Table 4.1 and Fig. 4.2). The 11.1 percentage point rise in the annualized average headline inflation rate was largely attributed to the increase in the prices of food items whose combined contribution reached 8.8 percentage points2 while non-food items made up the remaining 2.3 percentage points (Table 4.1). Annualized average food inflation reached 44.2 percent, 9.4 percentage points higher than that of last year mainly due to a significant rise in the prices of cereals; 1 ‘Annualized’ means 12 month average of CPI 2 Contribution of a given consumption item (j) in a basket containing n different consumption items is computed as: where

CPI, a, t and i each stands for price index, weight at￾tached to the index, the month for which contribution is being computed, and the number of lags of the current and the last eleven months from t potatoes, other tubers and stems and pulses which together accounted for 35.4 percentage points of the recorded rate. However, the decline in the price of spices put some negative pressure on the food inflation. Annualized average non-food inflation was also on the high side. Unlike the previous years, its pressure on the general inflation wassignificant mainly due to the surge in the rate of inflation of house rent, construction materials, water, fuel and power; clothing and footwear; and furniture furnishing, household equipment and operation, which jointly account for 75 percent of the expenditure on consumption of non-food items. Year-on-year variation in consumer price indices (CPI) has been decreasing since August 2008. General year-on-year inflation reached 2.7 percent in 2008/09 from 55.2 percent a year earlier (Fig 4.1)

National Bank of Ethiopia Annual Report 2008/09 32 Similarly, the year-on-year food inflation, which stood at 91.7 percent in July 2008, steadily declined to -3.4 percent in the month of June 2009. The year-on-year core inflation at 14.9 percent also show a slow down of 12.1 percentage points since August 2008. The prices of house rent, construction materials, water, and fuel and power, clothing and foot wear, furniture furnishing, household equipment and operation, and beverages accounted for about 85 percent of the 14.9 percent core inflation at the end of the fiscal year. Table 4.1 Annual Average Inflation Rates (In %) Consumption Items 2007/08 2008/09 Change (in Percentage Points) Contribution to Change in Headline Inflation (in Percentage Points) A B C C-B D General 25.3 36.4 11.1 2.3 Food 34.9 44.3 9.4 8.8 Non-Food 12.5 23.8 11.3 11.1 Source: Central Statistical Authority (CSA) and NBE Staff Computation Figure IV.1 Annual Developments of Annualized National Headline, Food & Non-food Inflation 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2006/07 2007/08 2008/09 General Food Non-food

National Bank of Ethiopia Annual Report 2008/09 33 Figure 4.2 Developments of Annual (year-on-year) National Headline, Food and Core Inflation -20.0 0.0 20.0 40.0 60.0 80.0 100.0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2006 2006/07 2007/08 2008/09 Inflation in % Headline Food Core Source: CSA and NBE Staff Computation Table 4.2 Selected Components of the CPI and their Contribution to the Annualized General Inflation for 2008/09 (In Percentage Points) Items Contribution to general inflation Weight Cereals 18.2 22.54 House rent, construction materials, water, and fuel and power 4.0 20.56 Potatoes, other tubers and stems 2.1 4.16 Clothing and footwear 2.1 8.32 Pulses 1.6 4.31 Source: CSA and NBE Staff Computation The joint contribution of the aforementioned items under Table 4.2 to the recorded 36.4 percent annualized general inflation was 28 percentage points. 4.2 Consumer Prices at Regional Level At the end of 2008/09, regional simple average headline inflation reached 38.7 percent (Table 4.3) with six regions; namely, Benishangul Gumz, Gambella, Harari, Oromia, Somali and Tigray, registering a rate above the regional simple average. However, compared to that of 2007/08, headline inflation increased in all regional states due to the pressure from both food and non-food CPI groups.

National Bank of Ethiopia Annual Report 2008/09 34 The highest increment in headline inflation was registered in Gambella (34.7 percentage points); whereas the lowest was in Benishangul Gumz (5.9 percent). Between 2007/08 and 2008/09, Gambella, Somali and Harari states experienced high price instability. The other regions relatively witnessed more stable prices, as measured by the extent of change in the rate of inflation of a given regional state relative to standard deviation of the change across regions (Table 4.3). Table 4.3 Regional Average Annual Inflation (2008/09 FY) Regions 2007/08 2008/09 Change General Food Non Food General Food Non Food General Food Non Food A B C D E F H I=E-B J=F-C K=H-D Addis Ababa 20.8 32.1 12.7 29.4 41.5 19.2 8.6 9.4 6.5 Afar 21.3 31.8 8.6 27.4 39.3 10.2 6.1 7.5 1.6 Amhara 25.5 35.8 8.0 34.7 42.4 18.5 9.2 6.6 10.5 B.Gumz 35.0 46.7 19.6 40.9 52.6 22.4 5.9 5.9 2.8 D.Dawa 23.3 32.2 14.1 33.4 47.3 16.6 10.1 15.1 2.5 Gambella 21.5 30.6 10.1 56.2 69.5 36.2 34.7 38.9 26.1 Harari 19.5 29.2 10.2 42.4 57.3 25.6 22.9 28.1 15.4 Oromia 27.5 36.7 13.9 39.1 45.6 27.8 11.6 8.9 13.9 SNNP 25.4 31.3 17.2 38.5 44.4 29.6 13.1 13.1 12.4 Somali 17.5 23.0 8.4 44.1 57.2 19.6 26.6 34.2 11.2 Tigray 27.4 39.5 10.3 40.1 49.8 24.8 12.7 10.3 14.5 Mean 24.1 33.5 12.1 38.7 49.7 22.8 14.7 16.2 10.7 Standard dev. 4.9 6.1 3.8 7.8 8.9 7.1 9.3 11.8 7.2 Coeff. of Var. 0.20 0.18 0.31 0.20 0.18 0.31 0.63 0.73 0.67 Source: CSA and NBE Staff Computation

National Bank of Ethiopia Annual Report 2008/09 35 0 10 20 30 40 50 60 70 80 Inflation in % Addis Ababa Afar Amhara B. Gumuz Dire Dawa Gambella Harari Oromia SNNP Somali Tigray Fig. 4.3: Reigional Variations in Average Annual Headline Inflation 2007/08 2008/09 Source: CSA and NBE Staff Computation As for food inflation, the regional simple average stood at 49.7 percent (Table 4.3). Four regions; namely, Benishangul Gumz, Gambella, Harari and Somali registered inflation rate higher than the regional simple average. Nonetheless, in comparison with that of 2007/08, food inflation increased in all regional states due to the rising cereal inflation. The highest surge in food inflation was registered in Gambella (38.9 percentage points); and the lowest in Benishangul Gumz (5.9 percentage points). Over the two-years period (2007/08 to 2008/09), food price instability was high in Source: CSA and NBE Staff Computation -10 0 10 20 30 40 50 60 70 80 Afar Amhara B. Gumuz Dire Dawa Gambella Harari Oromia SNNP Somali Tigray Addis Ababa Values in % Fig.4.4: Regional Variations in Average Annual Food Inflation 2008/09 2007/08

National Bank of Ethiopia Annual Report 2008/09 36 Gambella, Harari, and Somali states but low in Amhara, Afar, and Benishangul Gumz. During 2008/09, simple average regional non-food inflation stood at 22.8 percent (Table 4.3). Gambella, Harari, SNNP, and Tigray recorded a rate higher than the regional simple average. Compared to the rate in 2007/08, all regional states exhibited a surge in non-food inflation. Source: CSA and NBE Staff Computation The highest rise in non-food inflation was recorded in Gambella (26.1 percentage points), and the lowest in Afar (1.6 percentage points). Regarding convergence as measured by the change in coefficient of variation3 in regional rates of inflation between 2007/08 and 2008/09, no significant change was observed presumably due to the growing regional market integration. In general, inflation is moderating as a result of concerted efforts being made to break inflationary expectations through various fiscal, monetary and administrative measures. 0 2 4 6 8 10 12 14 Addis Ababa Afar Amhara B. Gumz Dire Dawa Gambella Harari Oromia SNNP Somali Tigray Values in % Regions Fig IV.5 Regional Variations in Average Annual Non-food Inflation 2008/09 2007/08

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 37 V. MONETARY AND FINANCIAL DEVELOPMENTS 5.1 Monetary Developments and Policy The focus of monetary policy in 2008/09 was mainly geared towards containing inflationary pressures witnessed during the recent years. As a result, tight monetary and prudent fiscal policy measures, along with administrative actions, were taken to arrest inflationary hikes and to maintain macroeconomic stability. 5.1.1 Developments in Monetary Aggregates The annual growth rate of domestic liquidity, as measured by broad money supply (M2), was 21 percent and reached Birr 82.5 billion compared to 20.4 percent last year. The expansion in broad money was largely driven by higher net foreign assets and domestic credit, which went up 54.1 and 11.5 percent, respectively. The growth in domestic credit, was solely attributed to 20.3 percent rise in credit to non-government sector while credit to government dropped by 0.9 percent. On the other hand, the rise in net foreign assets was due to higher inflows from net services, transfers and external loans and grants. The fiscal year 2008/09 witnessed a surge in all components of broad money. Narrow money rose 19.1 percent to Birr 42.1 billion, driven by 11.7 and 26.6 percent increases in currency outside banks and demand deposits reflecting the growing economic activities and higher transactions demand for money. Similarly, quasi-money (both savings and time deposits) surged 23.0 percent, owing to growing financial intermediation as banks continued to expand their branches throughout the country.

National Bank of Ethiopia Annual Report 2008/09 38 Table 5.1: Components of Broad Money (In Millions of Birr) Particulars End June Annual Percentage Change 2006/07 2007/08 2008/09 2006/07 2007/08 2008/09 Narrow Money Supply 29,617.7 35,350.4 42,112.66 24.4 19.4 19.1 . Currency Outside Banks 13,708.4 17,654.1 19,715.01 20.0 28.8 11.7 . Demand Deposits (net) 15,909.3 17,696.3 22,397.64 28.4 11.2 26.6 Quasi-Money 27,034.2 32,831.8 40,397.09 19.8 21.4 23.0 . Savings Deposits 23,715.2 29,477.6 37,148.72 15.8 24.3 26.0 . Time Deposits 3,319.0 3,354.1 3,248.37 59.6 1.1 -3.2 Broad Money Supply 56,651.9 68,182.1 82,509.8 22.2 20.4 21.0 Source: National Bank of Ethiopia (NBE)

Source: NBE 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 (In Millions of Birr) 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Fig V.1: Major Components of Broad Money (1989/90 - 2008/09) Currency Outside Banks Net Demand Deposit Quasi- Money Broad Money Year

National Bank of Ethiopia Annual Report 2008/09 39 Table 5.2: Factors Influencing Broad Money (In Millions of Birr) Particulars End June Percentage Change 2006/07 2007/08 2008/09 2006/07 2007/08 2008/09 External Assets (net) 13,340.4 11,665.6 17,976.81 10.2 -12.6 54.1 Domestic Credit 61,844.2 79,969.3 89,203.04 25.5 29.3 11.5 . Claims on Central Gov’t (net) 30,337.6 33,075.7 32,786.50 20.1 9.0 -0.9 . Claims on Non-Central Gov’t 31,506.6 46,893.6 56,416.54 31.1 48.8 20.3 Other Items (net) 18,532.7 23,452.7 24,670.10 23.3 26.5 5.2 Broad Money (M2) 56,651.9 68,182.1 82,509.75 22.2 20.4 21.0 Source: NBE Fig V.2: Major Determinants of Monetary Growth -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Ethiopian Fiscal year Annual Percentage Growth -200.0 -100.0 0.0 100.0 200.0 300.0 400.0 500.0 600.0 Credit to Central Gov't Credit to Non-Central Gov't Broad Money Net Foreign Assets Others NFA Source: NBE

National Bank of Ethiopia Annual Report 2008/09 40 5.1.2. Developments in Reserve Money and Monetary Ratios Reserve money or base money of NBE rose by 26.9 percent spurred by the growth both in currency in circulation and deposits of banks. Mirroring the 38.7 percent surge in deposits at the NBE, excess reserves of commercial banks went up to Birr 8.4 billion from Birr 6.1 billion a year ago. The ratio of M2/GDP, an indicator of financial deepening, declined over the past three years and reached 25.5 percent in 2008/09, partly reflecting the tight monetary policy measures taken to mitigate the impact of inflationary pressures. Table 5.3: Reserve Money and Monetary Ratios (In Millions of Birr) Year Ended June 30 Percentage Change Particulars 2006/07 2007/08 2008/09 2006/07 2007/08 2008/09 Reserve Requirement (CB’s) 2,592.5 9,112.9 11,183.3 22.2 251.5 22.7 Actual Reserve (CB’s) 11,734.0 15,233.0 19,569.4 38.8 29.8 28.5 Excess Reserve (CB’s) 9,141.5 6,120.1 8,386.0 44.4 -33.1 37.0 Reserve Money 27,313.6 35,551.1 45,107.0 28.9 30.2 26.9 . Currency in Circulation 15,175.2 20,216.4 23,836.4 20.8 33.2 17.9 . Bank Deposits 12,138.4 15,334.7 21,270.7 40.8 26.3 38.7 Money Multiplier (Ratio): . Narrow Money to Reserve Money 1.1 1.0 0.9 -3.5 -8.3 -6.6 . Broad Money to Reserve Money 2.1 1.9 1.8 -5.3 -7.5 -3.7 Other Monetary Ratios (%): . Currency to Narrow Money 51.2 57.2 56.6 -2.9 11.6 -1.0 . Currency to Broad Money 26.8 29.7 28.9 -1.1 10.7 -2.7 . Narrow Money to Broad Money 52.3 51.8 51.0 1.8 -0.8 -1.5 . Quasi Money to Broad Money 47.7 48.2 49.0 -1.9 0.9 1.6 M2/GDP Ratio* 33.0 27.8 25.5 -6.3 -15.8 -8.3 Source: NBE *M2/GDP ratio was calculated on the basis of new GDP series

National Bank of Ethiopia Annual Report 2008/09 41 Fig. V.3: Reserve Money 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 year Value in Millions of Birr Reserve Requirement (CB's) Actual Reserve (CB's) Excess Reserve (CB's) Reserve Money Source: NBE 5.2. Developments in Interest Rate Minimum interest rates on savings and time deposits remained at the previous year’s level of 4 percent; while the maximum deposit rate rose to 5 percent from 4.15 percent a year ago. Hence, average interest rate on savings deposit increased to 4.5 percent from 4.08 percent and that of time deposit to 5.26 percent from 5.16 percent last year. Similarly, the average lending rate rose to 12.25 percent from 11.5 percent last year. Yet, given the annual inflation rate of 2.7 percent, all deposit rates and lending rates were positive in real terms although they remained negative considering annual average CPI.

National Bank of Ethiopia Annual Report 2008/09 42 Table 5.4: Interest Rate Structure of Commercial Banks (In % per annum) Rates 2005/06 2006/07 2007/08 2008/09 Deposit Rate Savings Deposit Minimum 3.000 3.000 4.000 4.000 Maximum 3.150 3.150 4.150 5.000 Average* 3.075 3.075 4.075 4.500 Time deposit Up to 1 year 3.604 3.639 4.666 4.580 1 -2 years 4.005 4.112 5.228 6.204 Over 2 years 4.297 4.490 5.588 4.998 Average* 3.969 4.080 5.161 5.260 Demand Deposit (Average*) 0.058 0.062 0.041 0.057 Lending Rate Minimum 7.000 7.000 8.000 8.000 Maximum 14.000 14.000 15.000 16.500 Average* 10.500 10.500 11.500 12.250 Real Rate of Interest Deposit 1/ -7.725 -12.025 -51.125 1.800 Deposit 2/ -7.925 -7.825 -19.125 -10.500 Lending/1 -0.300 -4.600 -43.700 9.550 T-bills (Nominal) 0.039 0.495 0.673 0.802 Source: NBE 1/ Real saving deposit interest rates and real lending rates computed based on annual headline inflation. 2/ Real saving deposit interest rates computed based on core inflation. • It is simple average for saving deposit and lending rates, while weighted mean for time and demand deposits. As a result, the movements in the average interest rate on time and demand deposits reflect the change in the proportion of commercial bank deposits that would pay higher interest rate on time and demand deposits, rather than the change in interest rate.

National Bank of Ethiopia Annual Report 2008/09 43 Fig. V.4: Interest Rate Structure of Commercial Banks 0.00 5.00 10.00 15.00 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Years Value in % Average Saving Deposit Rate Average Time Deposit Rate Average Lending Rate Source: NBE 5.3 Developments in Financial Sector a. Banking System The major financial institutions operating in Ethiopia are banks, insurance companies and micro-finance institutions. The number of banks operating in the country reached 13, of which ten were private commercial banks, and the remaining three state-owned. All banks, except the Development Bank of Ethiopia, expanded their branch networks during the review year. Accordingly, 74 new branches were opened raising the total number of branches across the country to 636. Hence, it is estimated that one bank branch serves 126,258 people, which is way below even at the SSA standard. Significant expansion of branch banks was exhibited by Oromia International Bank (20 branches), followed by Wegagen Bank (9 branches), Awash International Bank (7 branches), and Dashen Bank and Cooperative Bank of Oromia (6 branches each). As a result, the share of private banks in branch network grew to 57 percent in 2008/09 from 53 percent last year. About 56 percent of the branches were located in Addis Ababa. The total capital of the banking industry increased 12.2 percent and reached Birr 11.1billion by end June 2009 following a

National Bank of Ethiopia Annual Report 2008/09 44 significant capital injection, particularly by Commercial Bank of Ethiopia, Wegagen Bank, Nib International Bank and Oromia International Bank. The share of private banks in the total capital rose to 36.5 percent from 33.8 percent a year ago. b. Insurance Companies With the launching of new insurance companies, namely, Ethio-Life and Oromia Insurance Company, the number of insurance companies in the country expanded to 12 in 2008/09 from 10 a year earlier. In terms of ownership, all insurance companies, except the Ethiopian Insurance Corporation, are privately owned. The total branches of insurance companies also climbed to 194 as 22 additional branches were opened in 2008/09. Significant expansion of branches was undertaken by Oromia Insurance Share Company (9 branches), followed by Nib Insurance Company (5 branches) and United Insurance Company (3 branches). Of the total branch insurance companies, 50.5 percent were located in Addis Ababa. Branch share of private insurance companies rose to 78.5 percent in 2008/09 from 75.3 percent last year. Similarly, the total capital of the insurance companies increased by 12.1 percent to Birr 652.3 million, mainly due to significant capital injection by Nib and Africa Insurance Companies.

National Bank of Ethiopia Annual Report 2008/09 45 Table.5.5.A: Capital and Branch Network of Banking System by the End of June 30, 2009 (Branch in Number and Capital in Millions of Birr) Banks Branch Network Capital 2007/08 2008/09 2007/08 2008/09 Addis Ababa Regions Total % Share Addis Ababa Regions Total % Share Total Capital % Share Total Capital % Share 1. Public Banks Commercial Bank of Ethiopia 156 49 205 36.5 160 49 209 32.9 4,556.0 45.7 5,041.0 45.5 Construction & Business Bank 15 12 27 4.8 17 15 32 5.0 175.0 1.8 196.0 1.8 Development Bank of Ethiopia 31 1 32 5.7 1 31 32 5.0 1,865.0 18.7 1,800.0 16.2 Total Public Banks 62 264 47.0 178 95 273 42.9 6,596.0 66.2 7,037.0 63.5 2. Private Banks Awash International Bank 24 29 53 9.4 29 31 60 9.4 480.0 4.8 555.0 5.0 Dashen Bank 24 24 48 8.5 28 26 54 8.5 731.0 7.3 815.0 7.4 Abyssinia Bank 19 23 42 7.5 22 25 47 7.4 416.0 4.2 421.0 3.8 Wegagen Bank 22 18 40 7.1 26 23 49 7.7 467.0 4.7 656.0 5.9 United Bank 13 23 36 6.4 15 26 41 6.4 467.0 4.7 449.0 4.1 Nib International Bank 16 26 42 7.5 17 28 45 7.1 489.0 4.9 581.0 5.2 Cooperative Bank of Oromiya 18 2 20 3.6 23 3 26 4.1 137.0 1.4 155.0 1.4 Lion Internation Bank 11 6 17 3.0 11 9 20 3.1 177.0 1.8 192.0 1.7 Zemen Bank - - - 0 1 1 0.2 - - 100.0 0.9 Oromia International Bank - - - 16 4 20 3.1 - - 121.0 1.1 Total Private Banks 151 298 53 187 176 363 57 3,364.0 33.8 4,045.0 36.5 3.Grand Total Banks 213 562 100 354 282 636 100.0 9,960.0 100.0 11,082.0 100.0 Source: Commercial Banks

National Bank of Ethiopia Annual Report 2008/09 46 Fig. V.5a: Branch Network of the Banking System (2005/06 - 2008/09) 0 50 100 150 200 250 300 350 400 2005/06 2006/07 2007/08 2008/09 Public Banks Private Banks

Fig. V.5b: Capital of the Banking System (2005/06 - 2008/09) 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 2005/06 2006/07 2007/08 2008/09 In Million Birr Public Banks Private Banks Source: Commercial Banks

National Bank of Ethiopia Annual Report 2008/09 47 Table.5.5.B: Branch Network & Capital of Insurance Companies (Branch in Number and Capital (In Millions of Birr) Insurance Companies Branch Capital 2007/08 2008/09 2007/08 2008/09 % Change Total Addis Ababa Regions Total A B B/A Ethiopian Ins. Cor. 37 11 28 39 229.3 249.4 8.8 Awash Ins. S.C. 21 13 9 22 51.5 52.9 2.6 Africa Ins. S.C. 13 6 7 13 46.1 59.0 28.0 National Ins. Co. of Eth. 14 8 8 16 13.4 14.8 10.3 United Ins. S.C 19 14 7 21 56.3 39.3 -30.3 Global Ins. S.C 7 4 3 7 20.3 22.9 12.8 Nile Ins. S.C 19 11 9 20 53.1 56.4 6.1 Nyala Ins. S.C 16 8 8 16 56.1 61.6 9.8 Nib Ins. S.C 16 13 8 21 45.1 60.3 33.6 Lion Ins. S.C 10 6 4 10 10.9 7.1 -34.8 Ethio-Life Ins ..S.C - - - - - 3.3 - Oromia Ins. S.C - 4 5 9 - 25.6 - Total 172 98 96 194 582.1 652.3 12.1 Source: Insurance Companies Fig.6: Branch Network of Insurance Companies 0 50 100 150 200 250 2004/05 2005/06 2006/07 2007/08 2008/09 Fiscal Year In number Source: Insurance Companies

National Bank of Ethiopia Annual Report 2008/09 48 Fig.7: Capital of Insurance Companies 0 200 400 600 800 2004/05 2005/06 2006/07 2007/08 2008/09 Fiscal year In million Birr Source: Insurance Companies c. Micro-Finance Institutions The number of microfinance institutions (MFIs) operating in the country remained at the previous year level of 28. Their total capital reached Birr 1.7 billion, 29.7 percent higher than last year. Their total asset also increased by 24 percent to Birr 6.6 billion. Similarly, their savings deposit went up 34.5 percent and their credit to clients rose 10.3 percent signifying the growing role they are playing in the development endeavors of the country. Of the total MFIs, 13 were operating in Addis Ababa. The two largest MFIs, alone; namely, Amhara and Dedebit Credit and Savings institutions, accounted for 53.8 percent of the total capital, 64.5 percent of the savings, 59.7 percent of the credit and 63.6 percent of the total assets of MFIs by end 2008/09.

National Bank of Ethiopia Annual Report 2008/09 49 Table 5.6: Microfinance Institutions Performance at End June 2009 (In Thousands of Birr) Microfinance Institutions 2007/08 2008/09 % Change A B B/A Total Capital 1,339,951.5 1,737,402.7 29.7 Savings Deposit 1,560,971.3 2,098,742.1 34.5 Credit 4,474,976.8 4,936,135.2 10.3 Total Assets 5,340,608.7 6,620,630.8 24.0 Source: Microfinance Institutions 5.3.1 Resource Mobilization The total resources mobilized by the banking system in the form of deposits, collection of loans and borrowings, increased 32.8 percent to Birr 37.4 billion in 2008/09 due to higher net deposits and loan collections. Spurred by significant branch expansion, deposit liabilities of the banking system rose to Birr 78.1 billion showing an annual growth rate of 24 percent. Component wise, savings deposits went up 26 percent followed by 25.3 percent rise in demand deposits. Time deposits, however, remained unchanged. Demand deposits accounted for 47.7 percent of the total deposits, savings deposits, 47.5 percent and time deposit 4.8 percent by end June 2009. Mirroring significant branch network expansion by private banks, the share of public banks in total deposits dropped to 61.8 percent from 64.8 percent last year. Total outstanding borrowings of the two state-owned banks; namely, the Development Bank of Ethiopia and Construction and Business Bank, reached Birr 3 billion by end June 2009 compared to Birr 2.7 billion a year earlier. Of their total borrowings, domestic sources accounted for 78.8 percent, the balance being foreign sources. Loan collection of the banking system showed annual increase of 16.9 percent and reached Birr 22 billion of which 47.2 percent was collected by private banks and the rest by public banks.

National Bank of Ethiopia Annual Report 2008/09 50 Table 5.7: Annual Resource Mobilization & Disbursing Activities of Commercial Banks and DBE (Specialized Bank) June 30, 2009 (In Million Birr) Particulars 2006/07 2007/08 2008/09 Percent Change Public Banks Private Banks Total (A) Public Banks Private Banks Total (B) Public Banks Private Banks Total (C) C/B 1. Deposits (net change) 5,073.9 4,332.4 9,406.3 4,283.1 4,808.0 9,091.1 7,524.9 7,670.8 15,195.7 67.1 Demand 3,737.7 1,265.9 5,003.6 2,054.3 1,420.2 3,474.5 4,482.9 3,042.3 7,525.2 116.6 Savings 1,375.1 1,855.5 3,230.6 2,308.3 3,455.1 5,763.4 2,905.7 4,765.4 7,671.1 33.1 Time (38.9) 1,211.0 1,172.1 (79.5) (67.3) (146.8) 136.3 (137.0) (0.6) (99.6) 2. Borrowing (net change) 396.6 - 396.6 269.4 - 269.4 233.6 - 233.6 (13.3) Local 301.7 - 301.7 197.6 - 197.6 4.0 - 4.0 (98.0) Foreign 95.0 - 95.0 71.8 - 71.8 229.6 - 229.6 219.8 3. Collection of Loans 5,954.6 5,473.0 11,427.6 9,493.0 9,296.2 18,789.2 10,368.8 11,596.7 21,965.5 16.9 4. Total Resources Mobilized (1+2+3) 11,425.1 9,805.4 21,230.5 14,045.4 14,104.2 28,149.7 18,127.3 19,267.5 37,394.8 32.8 5. Disbursement 6,306.3 9,252.7 15,559.0 15,447.5 11,807.0 27,254.5 12,782.3 12,694.7 25,477.0 (6.5) 6. Change in Liquidity (4-5) 5,118.8 552.7 5,671.6 (1,402.1) 2,297.2 895.2 5,345.0 6,572.8 11,917.8 1,231.4 Memorandum Item: 7. Outstanding Credit* 29,792.2 14,450.0 44,242.2 31,666.6 16,575.2 48,241.8 33,912.8 17,720.8 51,633.5 7.0 Source: Commercial Banks &Staff Computation * Excludes corporate and coupon bonds

National Bank of Ethiopia Annual Report 2008/09 51 Table 5.8: Deposits and Borrowings of Commercial Banks and Specialized Bank by June 30, 2009 (In Millions of Birr) 2006/07 2007/08 2008/09 Percentage change A B C C/A C/B A. Deposits -Demand 26,267.6 29,742.0 37,267.3 41.9 25.3 -Savings 23,718.8 29,482.2 37,153.3 56.6 26.0 -Time 3,878.9 3,732.0 3,731.4 -3.8 0.0 T o t a l 53,865.2 62,956.3 78,152.0 45.1 24.1 B. Borrowings -Local 2,009.6 2,174.5 2,399.4 19.4 10.3 -Foreign 434.3 506.1 647.3 49.0 27.9 T o t a l 4,256.6 2,680.6 3,046.7 -28.4 13.7 Source: Commercial banks and NBE staff computation 5.3.2 New Lending Activities Fresh loan disbursements by banks dropped from Birr 27.3 billion to Birr 25.5 billion in 2008/09 presumably reflecting the tight monetary policy pursued by NBE to contain the inflation and inflationary expectations. Of the total new loans disbursed by the banking system, 50.2 percent was provided by public banks, and the rest 49.8 percent by private banks. About 32 percent of the new loans went to finance international trade, 20.7 percent domestic trade, and 15.9 percent housing and construction sector. Fig V.8: Development in Deposit Mobilization, Lending and Loan Collection Activities of Banking System (2004/05-2008/09) 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 2004/05 public 2004/05 private 2005/06 public 2005/06 private 2006/07 public 2006/07private 2007/08 public 2007/08private 20008/09 public 20008/09private Year & Bank Ownership Value in Millions of Birr Net Deposit Lending Loan collection Source: Commercial Banks and DBE

National Bank of Ethiopia Annual Report 2008/09 52 Table.5.9: Loans and Advances by Lenders 1/ (In Millions of Birr) Lenders 2007/08 2008/09 Percentage Change D* C* O/S* D* C* O/S* A B C D E F D/A E/B F/C Public Banks Commercial Bank of Ethiopia 14418.2 8508.2 23,850.1 11098.9 9340.6 24,779.8 -23.0 9.8 3.9 Development Bank of Ethiopia 233.8 315.5 6,611.9 385.6 628.9 7,728.1 64.9 99.3 16.9 Construction & Business Bank of Ethiopia 795.5 669.4 1,204.6 1297.8 399.3 1,404.9 63.1 -40.3 16.6 Sub-Total 15,447.5 9,493.0 31,666.6 12,782.3 10,368.8 33,912.8 -17.3 9.2 7.1 Private Banks Awash International Bank 1547.0 1078.7 2867.9 2845.6 2291.8 2722.4 83.9 112.5 -5.1 Dashen Bank 2145.7 1793.5 4382.4 2293.6 2187.6 4447.0 6.9 22.0 1.5 Bank of Abyssinia 1934.3 1576.3 2822.7 1367.2 1644.9 2701.7 -29.3 4.4 -4.3 Wegagen Bank 2754.1 2707.8 2346.8 2153.2 2348.5 2112.3 -21.8 -13.3 -10.0 United Bank 746.8 257.5 1515.6 1452.9 1198.9 2153.0 94.5 365.6 42.1 Nib International Bank 1144.1 893.2 2108.9 1234.3 1265.0 2220.3 7.9 41.6 5.3 Cooperative Bank of Oromia 1337.6 872.5 323.9 581.5 393.6 592.5 -56.5 -54.9 83.0 Lion Interenational Bank 197.3 116.8 207.1 452.2 227.2 469.6 129.2 94.5 126.7 Oromia International Bank 108.2 10.8 113.3 Zemen Bank 205.9 28.3 188.6 Sub-Total 11,807.0 9,296.2 16,575.2 12,694.7 11,596.7 17,720.8 7.5 24.7 6.9 Grand Total 27,254.5 18,789.2 48,241.8 25,477.0 21,965.5 51,633.5 -6.5 16.9 7.0 Source: Commercial Banks 1. O/S Credit Includes centeral government borrowing but excludes corporate bonds D*=Disbursement, C*=Collection, O/S*= Outstanding Credit

National Bank of Ethiopia Annual Report 2008/09 53 Table 5.10: Percentage Share of Loans and Advances by Lenders (In Millions of Birr) Lenders 2007/08 2008/09 D* C* O/S* D* C* O/S* A B C D E F Public Banks Commercial Bank of Ethiopia 52.9 45.3 49.4 43.6 42.5 48.0 Development Bank of Ethiopia 0.9 1.7 13.7 1.5 2.9 15.0 Construction & Business Bank of Ethiopia 2.9 3.6 2.5 5.1 1.8 2.7 Sub-Total 56.7 50.5 65.6 50.2 47.2 65.7 Private Banks Awash International Bank 5.7 5.7 5.9 11.2 10.4 5.3 Dashen Bank 7.9 9.5 9.1 9.0 10.0 8.6 Bank of Abyssinia 7.1 8.4 5.9 5.4 7.5 5.2 Wegagen Bank 10.1 14.4 4.9 8.5 10.7 4.1 United Bank 2.7 1.4 3.1 5.7 5.5 4.2 Nib International Bank 4.2 4.8 4.4 4.8 5.8 4.3 Cooperative Bank of Oromia 4.9 4.6 0.7 2.3 1.8 1.1 Lion Interenational Bank 0.7 0.6 0.4 1.8 1.0 0.9 Oromia International Bank 0.0 0.4 0.0 0.2 Zemen Bank 0.0 0.8 0.1 0.4 Sub-Total 43.3 49.5 34.4 49.8 52.8 34.3 Grand Total 100.0 D*=Disbursement, C*=Collection, O/S*= Outstanding Credit 5.3.3 Outstanding Loans By the end of 2008/09, total outstanding loan of the banking system (including credit to government) increased 7 percent to Birr 51.6 billion. Gross outstanding claims on central government and public enterprises declined 18.4 and 6.4 percent, while that on private sector and cooperatives rose 16.3 and 6.4 percent, respectively (Table 5.13). Meanwhile, sectoral distribution of loans indicated that credit to trade (both domestic and international) accounted for 35.4 percent while claims on industry and agriculture were 17.6 and 11.6 percent, respectively. Claims on housing and construction sector, however, remained at the last year’s level of 13 percent (Table 5.12).

National Bank of Ethiopia Annual Report 2008/09 54 Table 5.11: Loans & Advances by Economic Sectors (In million Birr) Economic Sectors 2007/08 2008/09 Percentage Change D* C* O/S* D* C* O/S* D* C* O/S* A B C D E F D/A E/B F/C Government Deficit Financing 6,902.0 5,628.8 (18.4) Agriculture 5,371.6 4,443.4 5,481.2 3,037.5 2,802.2 6,009.7 (43.5) (36.9) 9.6 Industry 2,739.4 1,587.3 7,897.0 2,668.3 1,879.3 9,081.6 (2.6) 18.4 15.0 Domestic Trade 5,012.1 3,424.5 5,219.2 5,264.9 4,378.8 5,760.6 5.0 27.9 10.4 International Trade 9,210.4 5,685.3 12,205.0 8,165.5 7,200.3 12,513.6 (11.3) 26.6 2.5 Export 3,116.3 2,526.8 2,973.8 2,858.5 2,867.7 3,409.2 (8.3) 13.5 14.6 Import 6,094.1 3,158.6 9,231.2 5,307.0 4,332.6 9,104.4 (12.9) 37.2 (1.4) Hotels and Tourism 243.6 201.7 722.7 274.6 278.6 1,023.7 12.7 38.1 41.6 Transport and Communication 1,337.7 1,075.5 2,779.9 903.3 1,339.6 2,531.8 (32.5) 24.6 (8.9) Housing and Construction 2,017.0 1,431.9 4,865.1 4,040.2 3,010.6 6,688.1 100.3 110.3 37.5 Mines, Power and Water Resource 59.3 0.4 4.2 - 1.6 4.6 (100.0) 282.7 10.3 Others 997.5 733.0 1,819.7 771.2 863.7 1,815.6 (22.7) 17.8 (0.2) Personal 265.8 120.6 169.3 241.8 132.5 147.8 (9.0) 9.9 (12.7) Interbank Lending - 85.5225 176.5 109.89 78.358 427.5 - (8.4) 142.3 Total 27,254.5 18,789.2 48,241.8 25,477.0 21,965.5 51,633.5 (6.5) 16.9 7.0 Source: Commercial Banks &Staff Computation D*=Disbursement, C*=Collection, O/S*= Outstanding Credit

National Bank of Ethiopia Annual Report 2008/09 55 Table 5.12: Percentage Shares of Loans and Advances by Economic Sectors Economic Sectors 2004/05 2005/06 2006/07 2007/08 2008/09 D* C* O/S* D* C* O/S* D* C* O/S* D* C* O/S* D* C* O/S* Government Deficit Financing 25.1 32.5 29.9 10.9 0 0 10.9 Agriculture 16.5 11.9 7.0 17.6 13.8 8.6 16.9 14.3 9.5 11.9 12.8 11.6 11.9 12.8 11.6 Industry 11.5 11.1 17.7 10.5 11.3 15.9 9.8 12.2 15.8 10.5 8.6 17.6 10.5 8.6 17.6 Domestic Trade 20.2 22.6 9.2 19.8 18.1 8.4 19.1 17.7 8.5 20.7 19.9 11.2 20.7 19.9 11.2 International Trade 31.2 31.2 15.9 28.6 34.5 13.2 28.1 33.8 14.6 32.1 32.8 24.2 32.1 32.8 24.2 Export 13.2 16.0 5.0 13.4 16.3 4.0 14.3 15.6 5.3 11.2 13.1 6.6 11.2 13.1 6.6 Import 18.0 15.1 10.8 15.2 18.3 9.4 13.8 18.2 9.4 20.8 19.7 17.6 20.8 19.7 17.6 Hotels and Tourism 0.5 1.8 1.1 0.7 1.0 0.8 1.1 1.0 1.5 1.1 1.3 2.0 1.1 1.3 2.0 Transport and Communication 3.9 5.3 3.0 8.1 5.0 4.0 9.2 5.2 5.4 3.5 6.1 4.9 3.5 6.1 4.9 Housing and Construction 6.6 7.1 7.6 9.4 7.1 8.1 10.8 8.1 8.6 15.9 13.7 13.0 15.9 13.7 13.0 Mines, Power and Water Resource - 0.8 0.0 - - 0.1 0.1 - 0.1 - 0.0 0.0 - 0.0 0.0 Others 8.6 5.9 11.9 4.1 7.2 7.2 3.8 6.1 5.2 3.0 3.9 3.5 3.0 3.9 3.5 Personal 0.9 1.0 0.4 1.1 1.0 0.2 1.2 0.9 0.3 0.9 0.6 0.3 0.9 0.6 0.3 Interbank Lending - 1.3 1.2 - 0.8 0.7 - 0.7 0.5 0.4 0.4 0.8 0.4 0.4 0.8 Total 100.0 Source: Commercial Banks &Staff Computation D*=Disbursement, C*=Collection, O/S*= Outstanding Credit

National Bank of Ethiopia Annual Report 2008/09 56 0.0 20000.0 40000.0 60000.0 80000.0 100000.0 In Millions of Birr 1999/00 2001/02 2003/04 2005/06 2007/08 Fiscal Year Fig V.9: Sectoral Breakdown of Bank Credit(1999/00-2008/09) Agriculture Industry Domestic Trade & Services International Trade Housing & Construction Others Total Source: Commercial Banks Table 5.13: Loans and Advances by Borrowers (In Millions of Birr) Borrowing Sector 2006/07 2007/08 2008/09 Percentage change O/S* O/S* D* C* O/S* A B C D E E/A E/B Central Government 13,214.9 6,902.0 0.0 0.0 5,628.8 -57.4 -18.4 Public Enterprises 3,263.1 8,732.6 5,265.6 4,043.3 8,170.8 150.4 -6.4 Cooperatives 2,025.0 3,161.1 2,637.2 2,463.3 3,364.5 66.1 6.4 Private & Individuals 25,513.4 29,269.6 17,469.3 15,386.5 34,041.9 33.4 16.3 Inter-bank Lending 225.7 176.5 104.9 72.5 427.5 89.4 142.3 Total 44,242.2 48,241.8 25,477.0 21,965.5 51,633.5 16.7 7.0 Total less Inter-bank Lending 44,016.4 48,065.3 25,372.1 21,893.1 51,206.0 16.3 6.5 Source: Commercial Banks &Staff Computation D*=Disbursement, C*=Collection, O/S*= Outstanding Credit

National Bank of Ethiopia Annual Report 2008/09 57 5.4. Financial Activities of NBE Outstanding claims of NBE on the central government reached Birr 44.5 billion in 2008/09 about 7.1 percent higher than last year. This was due to a 9.7 percent rise in direct advances, which amounted to Birr 34.9 billion (or 78.4 percent of the total claims) by end 2008/09. Direct advances, however, significantly dropped compared to 2006/07 due to prudent monetary and fiscal policies pursued by the government to curb inflation. At the same time, the liabilities of NBE (deposits of the central government and domestic financial institutions) grew by 29.2 percent on account of higher deposits of financial institutions (37.5 percent) and increase in government deposit (8.4 percent).

Table 5.14: Financial Activities of NBE by End of June 30, 2009 (In Millions of Birr) Particulars 2006/07 2007/08 2008/09 % Change A B C C/A C/B Loans and Advances (1+2) 33,513.4 41,563.1 44,498.7 32.8 7.1 1.Claims on Central Gov’t 33,513.4 41,563.1 44,498.7 32.8 7.1 1.1 Direct Advance 23,562.0 31,818.0 34,891.0 48.1 9.7 1.2 Bonds 9,951.4 9,745.1 9,607.7 -3.5 -1.4 2. Claims on DBE - - - - - 3. Deposit Liabilities 21,053.6 21,710.9 28,054.3 33.3 29.2 3.1 Government 8,657.8 6,157.3 6,671.5 -22.9 8.4 3.2 Financial Institutions 12,395.8 15,553.6 21,382.8 72.5 37.5 Source: NBE and Staff Computation

National Bank of Ethiopia Annual Report 2008/09 58 5.5 Developments in Financial Markets Treasury bills are the only securities traded in the primary market on a fortnightly basis. No secondary market exists in the country. 5.5.1 Treasury Bills Market Treasury bills with maturity periods of 28, 91 and 182 days were issued by NBE on behalf of the Federal Government. Thus, the amount of Treasury-bills supplied to the fortnightly auction was worth Birr 28.5 billion in 2008/09 while total demand was to the tune of Birr 46.8 billion. Hence, the amount of T-bills sold during the year was Birr 27.8 billion, depicting an annual fall of 41.8 percent as the dominance of commercial banks in the T-bills auction market tended to diminish in the review year. Accordingly, about 78 percent of the total outstanding bills worth Birr 7.8 billion was held by non-bank institutions compared to 68 percent a year earlier. Meanwhile, the average weighted yield for all types of bills rose to 0.74 percent in 2008/09 from 0.68 percent a year ago.

Table 5.15: Results of Treasury Bills Auction Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/A C/B Number of Bidders 168 182 261 55.4 43.4 Amount Demanded (Mn.Birr) 78,922.000 59,888.510 46,767.200 -40.743 -21.910 28-day bill 38,601.500 20,587.510 10,441.900 -72.949 -49.280 91-day bill 32,163.500 17,779.000 29,477.700 -8.350 65.801 182-day bill 8,157.000 21,522.000 6,847.600 -16.052 -68.183 Amount Supplied (Mn.Birr) 69,487.000 48,889.000 28,471.900 -59.026 -41.762 28-day bill 34,257.500 12,320.000 4,265.000 -87.550 -65.381 91-day bill 28,135.500 15,394.000 15,931.700 -43.375 3.493 182-day bill 7,094.000 21,175.000 8,275.200 16.651 -60.920 Amount Sold (Mn.Birr) 65,315.000 47,716.510 27,839.800 -57.376 -41.656 Banks 58,599.600 35,613.000 2,672.000 -95.440 -39.227 Non-Banks 6,715.400 12,103.510 25,167.800 274.777 80.235 Average Weighted Price for Successful bids(Birr) 99.843 99.820 99.797 -0.046 -0.023 28-day bill 99.968 99.947 99.951 -0.017 0.004 91-day bill 99.857 99.825 99.783 -0.074 -0.042 182-day bill 99.704 99.688 99.657 -0.047 -0.031 Average Weighted Yeild for Successful bids(%) 0.530 0.677 0.743 40.163 9.734 28-day bill 0.417 0.700 0.636 52.518 -9.128 91-day bill 0.574 0.704 0.871 51.742 23.660 182-day bill 0.600 0.628 0.723 20.500 15.135 Outstanding bills at the End of period(Mn. Br.) 11,546.000 8,239.500 7,783.100 -32.591 -5.539 Banks 9,135.000 2,739.000 1,672.000 -81.697 -38.956 Non-Banks 2,411.000 5,500.500 6,111.100 153.467 11.101 Source: NBE National Bank of Ethiopia Annual Report 2008/09 59

Fig V.10:Treasury Bills Auction Result 0.00 10000.00 20000.00 30000.00 40000.00 50000.00 60000.00 70000.00 80000.00 90000.00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year Value in Millions of Birr 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Demand Supply Average Weighted Yield Source: NBE 5.5.2. Bond Market There is no formal market for government bonds. The last auction for government bonds was held in November 2000 in which commercial banks purchased bonds with a two-year maturity. However, there were bonds issued by the government without auction on various occasions for specific reasons. In contrast, there was strong demand for corporate bonds. As a result, corporate bond holdings of commercial banks increased to Birr 19.3 billion in 2008/09 from Birr 13.2 billion a year ago. 5.5.3. Inter-bank Money Market Inter-bank money market remained underdeveloped in Ethiopia, mainly due to the existence of excess reserves in the banking system. No inter-bank money market transaction was conducted in 2008/09. Since the introduction of the interbank money market in September 1998, merely twenty-three transactions worth Birr 259.2 million were conducted with interest rates ranging between 7 and 11 percent. The maturity period of these loans ranged from overnight to 5 years. National Bank of Ethiopia Annual Report 2008/09 60

Fig V.10:Treasury Bills Auction Result 0.00 10000.00 20000.00 30000.00 40000.00 50000.00 60000.00 70000.00 80000.00 90000.00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year Value in Millions of Birr 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Demand Supply Average Weighted Yield Source: NBE 5.5.2. Bond Market There is no formal market for government bonds. The last auction for government bonds was held in November 2000 in which commercial banks purchased bonds with a two-year maturity. However, there were bonds issued by the government without auction on various occasions for specific reasons. In contrast, there was strong demand for corporate bonds. As a result, corporate bond holdings of commercial banks increased to Birr 19.3 billion in 2008/09 from Birr 13.2 billion a year ago. 5.5.3. Inter-bank Money Market Inter-bank money market remained underdeveloped in Ethiopia, mainly due to the existence of excess reserves in the banking system. No inter-bank money market transaction was conducted in 2008/09. Since the introduction of the interbank money market in September 1998, merely twenty-three transactions worth Birr 259.2 million were conducted with interest rates ranging between 7 and 11 percent. The maturity period of these loans ranged from overnight to 5 years. Table 5. 16: Interbank Money Market Transactions up to June 2008 Borrower Lender Amount Borrowed (In Thousand Birr) Interest Rate % Date of Transaction Maturity Period Nib International Bank Awash International Bank 7,000.0 11 16/11/00 Overnight Wegagen Bank Commercial Bank of Ethiopia 10,000.0 8 3/1/2001 5 years Nib International Bank ,, 10,000.0 8 3/31/2001 3 months Wegagen Bank ,, 10,000.0 8 3/22/2001 1 year Nib International Bank ,, 3,600.0 8 5/31/2001 6 months Nib International Bank ,, 3,700.0 8 06/31/01 6 months Nib International Bank ,, 778.0 8 30-11-2001 6 months Nib International Bank Bank of Abyssinia 28,999.8 7 31/12/02 3.5 months Nib International Bank Bank of Abyssinia 19,046.9 7 31/01/03 3.5 months Nib International Bank Bank of Abyssinia 20,310.0 7 28/02/03 3.5 months Nib International Bank Bank of Abyssinia 28,987.0 7 31/03/03 3.5 months Nib International Bank Commercial Bank of Ethiopia 25,000.0 7.5 7/7/2003 5.2 months Nib International Bank Bank of Abyssinia 50.1 7.5 26/03/2005 open Nib International Bank Bank of Abyssinia 50.5 7.5 26/03/2005 open Wegagen Bank Awash International Bank 19,744.6 7.5 December, 2006 21/05/07 Wegagen Bank Awash International Bank 19,870.4 7.5 January, 2007 21/05/07 Wegagen Bank Awash International Bank 10,937.2 7.5 February, 2007 21/05/07 Awash International Bank Nib International Bank 30,000.0 7.5 February, 2007 18/08/07 Wegagen Bank Awash International Bank 10,931.4 7.5 March, 2007 21/05/07 Nib International Bank Awash International Bank 142.0 8.5 January, 2008 25/4/08 Nib International Bank Awash International Bank 7.0 8.5 February, 2008 25/04/08 Nib International Bank Awash International Bank 3.0 8.5 March, 2008 25/04/08 Nib International Bank Awash International Bank 17.0 8.5 April,2008 25/04/08 Total/Average - 259,174.8 7.87 - - Source: NBE National Bank of Ethiopia Annual Report 2008/09 61

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09 63

VI. DEVELOPMENTS IN EXTERNAL SECTOR 6.1 Overall Balance of Payments In 2008/09 the overall balance of payments turned from a deficit of USD 263.5 million last year to a surplus of USD 376.8 million due to the surge in the services account, private and public transfers and higher net capital inflows. The trade deficit, however, widened by 17.5 percent, as imports rose 13.5 percent while exports declined by 1.2 percent. As a result, the current account deficit expanded by 8.8 percent (although it declined as a proportion to GDP) despite improvements in the surplus of the service account (145.2 percent),net private transfers (171.2 percent) and net official transfers (18.2 percent). A significant increase in net capital inflows, however, ensured a surplus in the balance of payments offsetting the widening effect of the current account deficit. National Bank of Ethiopia Annual Report 2008/09

VI. DEVELOPMENTS IN EXTERNAL SECTOR 6.1 Overall Balance of Payments In 2008/09 the overall balance of payments turned from a deficit of USD 263.5 million last year to a surplus of USD 376.8 million due to the surge in the services account, private and public transfers and higher net capital inflows. The trade deficit, however, widened by 17.5 percent, as imports rose 13.5 percent while exports declined by 1.2 percent. As a result, the current account deficit expanded by 8.8 percent (although it declined as a proportion to GDP) despite improvements in the surplus of the service account (145.2 percent),net private transfers (171.2 percent) and net official transfers (18.2 percent). A significant increase in net capital inflows, however, ensured a surplus in the balance of payments offsetting the widening effect of the current account deficit. National Bank of Ethiopia Annual Report 2008/09 62

Table 6. 1. Balance of Payments (In Millions of USD) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Trade Balance -3940.9 -5344.8 -6278.7 17.5 59.3 Exports 1185.1 1465.7 1447.9 -1.2 22.2 Imports 5126.0 6810.5 7726.6 13.5 50.7 Net Services 230.0 142.3 385.9 171.2 67.8 Travel 69.6 149.8 207.9 38.8 198.7 Transportation 80.6 129.2 223.1 72.7 176.8 Government (n.i.e.) 258.8 134.6 160.4 19.2 -38.0 Investment income 30.4 16.6 -33.4 -300.7 -209.8 Interest 47.5 30.0 -9.1 -130.3 -119.2 Cash (net) 47.0 30.0 -9.1 -130.3 -119.4 Arrears 0.0 - - Dividend -17.1 -13.4 -24.3 81.8 42.0 Other Services -209.4 -287.9 -172.1 -40.2 -17.8 Private Transfers 1728.6 2388.3 2706.8 13.3 56.6 Current Account Balance(excl. public transfers) -1982.3 -2814.2 -3185.9 13.2 60.7 Public Transfers 1199.1 1312.5 1551.4 18.2 29.4 Current Account Balance(incl. public transfers) -783.1 -1501.7 -1634.5 8.8 108.7 Non-monetary Capital 676.1 1055.8 1664.9 57.7 146.3 Long-term (net) 224.6 330.5 739.3 123.7 229.1 Disbursements 238.8 377.3 781.3 107.1 227.2 Repayments 14.2 46.8 42.1 -10.0 196.3 Cash 14.2 46.8 42.1 -10.0 196.3 Arrears 0.0 - - Direct Investment (net) 482.0 814.6 893.6 9.7 85.4 Short-term (net) -30.5 -89.4 32.0 -135.8 -204.9 Net Errors & Omissions 192.3 173.8 346.5 99.4 80.2 Overall Balance 85.2 -263.5 376.8 -243.0 342.3 Financing -85.2 263.5 -376.8 -243.0 342.3 Reserves (-:increase) -85.2 263.5 -376.7 -242.9 342.1 NBE net foreign asset -39.6 244.4 -429.0 -275.5 983.3 CBs net foreign asset -45.3 19.1 52.2 173.4 -215.2 Source: NBE Staff Compilation National Bank of Ethiopia Annual Report 2008/09 63

Table 6.2: Components of External Trade as Percentage of GDP Particulars 2006/07 2007/08 2008/09 Percent Change A B C C/B C/A Exports 6.1 5.5 4.6 -16.8 -24.8 Imports 26.4 25.6 24.5 -4.5 -7.2 Trade Balance -20.3 -20.1 -19.9 -1.1 -1.9 Net Services 1.0 0.6 1.2 107.7 26.5 Net Private Transfers 8.7 9.0 8.5 -5.2 -2.2 Current Account Deficit (Excluding Official Transfers) -10.6 -10.5 -10.1 -3.7 -4.3 Current Account Deficit (Including Official Transfers) -4.4 -5.6 -5.2 -6.8 18.4 Source: NBE Staff Compilation
Fig. VI.1 Trends in Components of Current Account 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 In Millions of USD Exports Imports Net Services Private Transfers Source: NBE Staff Computations National Bank of Ethiopia Annual Report 2008/09 64

6.2 Developments in Merchandise Trade The trade deficit widened to USD 6.3 billion in 2008/09 from USD 5.3 billion in the preceding fiscal year due to an increase in imports and a slow down in exports. Its ratio to GDP, however, remained around 20 percent. 6.2.1 Exports Total merchandise exports reached USD 1.45 billion in 2008/09, about 1.2 percent lower than last year as export earnings from coffee, pulses, leather products and fruits and vegetables tended to falter. Table 6.3 Values of Major Export Items 2006/07 % share 2007/08 % share 2008/09 % share Percentage Change A B C C/B C/A Coffee 424.2 35.8 524.5 35.8 375.9 26.0 -28.3 -11.4 Oilseeds 187.4 15.8 218.8 14.9 356.1 24.6 62.8 90.0 Leather and Leather Products 89.6 7.6 99.2 6.8 75.3 5.2 -24.1 -16.0 Pulses 70.3 5.9 143.6 9.8 90.7 6.3 -36.8 29.1 Meat & Meat Products 15.5 1.3 20.9 1.4 26.6 1.8 27.3 71.8 Fruits & Vegetables 16.2 1.4 12.8 0.9 12.1 0.8 -5.4 -24.9 Live Animals 36.8 3.1 40.9 2.8 52.7 3.6 28.9 43.3 Chat 92.8 7.8 108.3 7.4 138.7 9.6 28.1 49.5 Gold 97.0 8.2 78.8 5.4 97.8 6.8 24.2 0.9 Flower 63.6 5.4 111.8 7.6 130.7 9.0 16.9 105.5 Others 91.8 7.7 106.3 7.2 91.3 6.3 -14.1 -0.5 Total 1185.1 100.0 1465.7 100.0 1447.9 100.0 -1.2 22.2 Source: Ethiopian Revenue and Customs Authority Export receipts from coffee declined by 28.3 percent as a result of lower volume and international price. The volume of coffee exports went down to 21.5 percent due to problems associated with domestic trading system, lower demand in the international market following the global economic recession and the ban by Japan, the second largest buyer of Ethiopian coffee. Consequently, the share of coffee in total exports fell to 26 percent from 35.8 percent a year earlier. Similarly, export revenue from pulses dropped to 36.8 percent on account of 40.8 percent fall in the volume of exports despite 6.7 percent increase in international prices. Thus, the share of pulses in total exports shrank from 9.8 percent to 6.3 percent during the review period. National Bank of Ethiopia Annual Report 2008/09 65

6.2 Developments in Merchandise Trade The trade deficit widened to USD 6.3 billion in 2008/09 from USD 5.3 billion in the preceding fiscal year due to an increase in imports and a slow down in exports. Its ratio to GDP, however, remained around 20 percent. 6.2.1 Exports Total merchandise exports reached USD 1.45 billion in 2008/09, about 1.2 percent lower than last year as export earnings from coffee, pulses, leather products and fruits and vegetables tended to falter. Table 6.3 Values of Major Export Items 2006/07 % share 2007/08 % share 2008/09 % share Percentage Change A B C C/B C/A Coffee 424.2 35.8 524.5 35.8 375.9 26.0 -28.3 -11.4 Oilseeds 187.4 15.8 218.8 14.9 356.1 24.6 62.8 90.0 Leather and Leather Products 89.6 7.6 99.2 6.8 75.3 5.2 -24.1 -16.0 Pulses 70.3 5.9 143.6 9.8 90.7 6.3 -36.8 29.1 Meat & Meat Products 15.5 1.3 20.9 1.4 26.6 1.8 27.3 71.8 Fruits & Vegetables 16.2 1.4 12.8 0.9 12.1 0.8 -5.4 -24.9 Live Animals 36.8 3.1 40.9 2.8 52.7 3.6 28.9 43.3 Chat 92.8 7.8 108.3 7.4 138.7 9.6 28.1 49.5 Gold 97.0 8.2 78.8 5.4 97.8 6.8 24.2 0.9 Flower 63.6 5.4 111.8 7.6 130.7 9.0 16.9 105.5 Others 91.8 7.7 106.3 7.2 91.3 6.3 -14.1 -0.5 Total 1185.1 100.0 1465.7 100.0 1447.9 100.0 -1.2 22.2 Source: Ethiopian Revenue and Customs Authority Export receipts from coffee declined by 28.3 percent as a result of lower volume and international price. The volume of coffee exports went down to 21.5 percent due to problems associated with domestic trading system, lower demand in the international market following the global economic recession and the ban by Japan, the second largest buyer of Ethiopian coffee. Consequently, the share of coffee in total exports fell to 26 percent from 35.8 percent a year earlier. Similarly, export revenue from pulses dropped to 36.8 percent on account of 40.8 percent fall in the volume of exports despite 6.7 percent increase in international prices. Thus, the share of pulses in total exports shrank from 9.8 percent to 6.3 percent during the review period. As global economic downturn worsened, export earnings from leather and leather products also fell to 24.1 percent as the volume of exports went down by 51 percent in spite of significant rise in international prices. On the other hand, export earnings from oilseeds, the second largest export item, increased by 62.8 percent due to 88.7 percent surge in volume offsetting 13.7 percent decline in international price. Consequently, the share of oilseeds in the total exports rose to 24.6 percent from 14.9 percent in the preceding fiscal year. Similarly, due to increased export to the Middle East and better international prices, revenue from meat and meat products and live animals went up by 27.3 percent and 28.9 percent, respectively. Despite fears of the global economic crisis, export revenue from flower improved by 16.9 percent in 2008/09 as a result of higher volume of exports to different destinations despite marginal decline in international prices. Export of chat and gold also fared well as revenue from these items rose by 28.1 and 24.2 percent reaching USD 138.7 million and 97.8 million, respectively in 2008/09. Fig.VI.2 Foreign Exchange Earnings from Selected Export Items 0 100 200 300 400 500 600 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 In Millions of USD Coffee Oilseeds Leather and Leather Products Pulses Chat Gold Source: Ethiopian Revenue and Customs Authority National Bank of Ethiopia Annual Report 2008/09 66

Source: NBE Staff Compilation Table 6.4: Volume of Major Exports (In Millions of Kg) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Coffee 176.4 170.7 134.0 -21.5 -24.1 Oilseeds 235.0 152.1 287.0 88.7 22.1 Leather and Leather Products 15.8 14.9 7.3 -51.1 -53.8 Pulses 158.8 233.0 138.0 -40.8 -13.1 Meat & Meat Products 5.8 6.5 7.5 15.3 27.8 Fruits & Vegetables 40.9 39.9 38.5 -3.6 -6.0 Live Animals 43.7 40.0 36.7 -8.1 -15.9 Chat 22.7 22.4 25.4 13.4 12.1 Gold 0.0056 0.0038 0.0049 29.6 -12.7 Flower 14.4 22.4 29.2 30.2 102.0 Source: Ethiopian Revenue and Customs Authority Coffee 26.0% Oilseeds 24.6% Leather and Leather Products 5.2% Pulses 6.3% Chat 9.6% Gold 6.8% Flower 9.0% Others 12.5% Fig. VI.3 Export Share of Selected Commodities in 2008/09 National Bank of Ethiopia Annual Report 2008/09 67

Source: NBE Staff Compilation Table 6.4: Volume of Major Exports (In Millions of Kg) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Coffee 176.4 170.7 134.0 -21.5 -24.1 Oilseeds 235.0 152.1 287.0 88.7 22.1 Leather and Leather Products 15.8 14.9 7.3 -51.1 -53.8 Pulses 158.8 233.0 138.0 -40.8 -13.1 Meat & Meat Products 5.8 6.5 7.5 15.3 27.8 Fruits & Vegetables 40.9 39.9 38.5 -3.6 -6.0 Live Animals 43.7 40.0 36.7 -8.1 -15.9 Chat 22.7 22.4 25.4 13.4 12.1 Gold 0.0056 0.0038 0.0049 29.6 -12.7 Flower 14.4 22.4 29.2 30.2 102.0 Source: Ethiopian Revenue and Customs Authority Coffee 26.0% Oilseeds 24.6% Leather and Leather Products 5.2% Pulses 6.3% Chat 9.6% Gold 6.8% Flower 9.0% Others 12.5% Fig. VI.3 Export Share of Selected Commodities in 2008/09

Fig. VI.4 Export Volumes of Selected Commodities 0 50 100 150 200 250 300 350 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 In Millions of Kg Coffee Oilseeds Leather and Leather Products Pulses Chat Gold (MT)

Source: Ethiopian Revenue and Customs Authority

Table 6.5: Unit Value of Major Exports (In USD per Kg) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Coffee 2.4 3.1 2.8 -8.7 16.7 Oilseeds 0.8 1.4 1.2 -13.7 55.6 Leather and Leather Products 5.7 6.7 10.3 55.2 81.7 Pulses 0.4 0.6 0.7 6.7 48.5 Meat & Meat Products 2.6 3.2 3.6 10.4 34.4 Fruits & Vegetables 0.4 0.3 0.3 -1.9 -20.2 Live Animals 0.8 1.0 1.4 40.3 70.3 Chat 4.1 4.8 5.5 13.0 33.4 Gold 17,380.7 20,955.5 20084.1 -4.2 15.6 Flower 4.4 5.0 4.5 -10.2 1.7 Source: Calculated from Tables VI.3 and VI.4 National Bank of Ethiopia Annual Report 2008/09 68

Source: NBE Staff Compilation Fig. VI.5 Unit Value of Exports of Selected Commodities 0 2 4 6 8 10 12 1998/99 2000/01 2002/03 2004/05 2006/07 2008/09 USD per Kg Coffee Oilseeds Leather and Leather Products Pulses Chat 6.2.2. Imports Total imports went up to USD 7.7 billion in 2008/09 from USD 6.8 billion in 2007/08. The ratio of imports to GDP, however, declined to 24.5 percent from 26.4 percent in 2007/08. Imports of raw materials were 37.4 percent up presumably depicting the increased level of industrial economic activities as reflected in the growing share of raw materials in total imports from 3.8 percent to 4.6 percent. Imports of capital goods also went up by 29.7 percent over last year and reached USD 2.5 billion due to the booming investment activities in the country. Hence, the share of capital goods in total imports rose from 28 percent to 32 percent in 2008/09. Similarly, imports of consumer goods surged by 54.7 percent as a result of higher imports of both durable and non￾durable consumer goods. The rise in non-durable consumer goods was due to increased imports of cereals, medical and pharmaceutical products. Consequently, the share of consumer goods in total imports grew to 30.3 percent compared to 22.3 percent in 2007/08. Meanwhile, fuel import bill declined by 22.5 percent to USD 1.26 billion mainly National Bank of Ethiopia Annual Report 2008/09 69

Source: NBE Staff Compilation Fig. VI.5 Unit Value of Exports of Selected Commodities 0 2 4 6 8 10 12 1998/99 2000/01 2002/03 2004/05 2006/07 2008/09 USD per Kg Coffee Oilseeds Leather and Leather Products Pulses Chat 6.2.2. Imports Total imports went up to USD 7.7 billion in 2008/09 from USD 6.8 billion in 2007/08. The ratio of imports to GDP, however, declined to 24.5 percent from 26.4 percent in 2007/08. Imports of raw materials were 37.4 percent up presumably depicting the increased level of industrial economic activities as reflected in the growing share of raw materials in total imports from 3.8 percent to 4.6 percent. Imports of capital goods also went up by 29.7 percent over last year and reached USD 2.5 billion due to the booming investment activities in the country. Hence, the share of capital goods in total imports rose from 28 percent to 32 percent in 2008/09. Similarly, imports of consumer goods surged by 54.7 percent as a result of higher imports of both durable and non￾durable consumer goods. The rise in non-durable consumer goods was due to increased imports of cereals, medical and pharmaceutical products. Consequently, the share of consumer goods in total imports grew to 30.3 percent compared to 22.3 percent in 2007/08. Meanwhile, fuel import bill declined by 22.5 percent to USD 1.26 billion mainly on account of the drop in international oil prices offsetting a 3.5 percent increase in volume of oil imports. Accordingly, the share of fuel in total import bill plummeted from 23.8 percent last year to 16.3 percent in the review year. Table 6.6: Value of Imports by End Use (In Millions of USD) 2006/07 Share from total 2007/08 Share from total 2008/09 Share from total Percentage Change A B C C/B C/A Raw Materials 148.6 2.9 257.8 3.8 354.2 4.6 37.4 138.4 Semi-finished Goods 800.3 15.6 1,259.7 18.5 1,140.1 14.8 -9.5 42.5 Fertilizers 140.0 2.7 302.1 4.4 270.7 3.5 -10.4 93.3 Fuel 875.1 17.1 1,621.4 23.8 1,256.7 16.3 -22.5 43.6 Petroleum Products 872.3 17.0 1,614.4 23.7 1,247.0 16.1 -22.8 42.9 Others 2.7 0.1 7.0 0.1 9.7 0.1 38.4 252.6 Capital Goods 1,868.5 36.5 1,907.7 28.0 2,474.4 32.0 29.7 32.4 Transport 633.8 12.4 380.9 5.6 384.2 5.0 0.9 -39.4 Agricultural 33.0 0.6 40.9 0.6 31.3 0.4 -23.6 -5.1 Industrial 1,201.7 23.4 1,485.85 21.8 2,058.9 26.6 51.9 71.3 Consumer Goods 1,317.0 25.7 1,515.7 22.3 2,344.1 30.3 54.7 78.0 Durables 520.7 10.2 459.4 6.7 635.5 8.2 38.3 22.0 Non-durables 796.3 15.5 1,056.3 15.5 1,708.7 22.1 61.8 114.6 Miscellaneous 116.6 2.3 231.7 3.6 157.0 2.0 -32.2 34.6 Total Imports 5,126.2 100.0 6,810.7 100.0 7,726.6 100.0 13.4 50.7 Source: Ethiopian Revenue and Customs Authority 6.2.3 Direction of Trade Europe remained the largest market for Ethiopia’s exports during 2008/09 accounting for 41.7 percent of the country’s total exports. Among the European countries, Germany, which mainly imported coffee and flowers, was the largest buyer of Ethiopian goods. The Netherlands, the main destination for Ethiopian flower exports during the review period, was the second biggest market in Europe followed by Switzerland, the sole importer of gold from Ethiopia. Italy whose main imports included leather and leather products, coffee and textile and garments held the fourth place. Exports to the Asian market accounted for 35.6 percent, of which 35.3 percent went to China, 21.6 percent to Saudi Arabia, 11.2 percent to United Arab Emirates (UAE) and 7.8 percent to Israel. The major export items to China included oilseeds, leather and leather products and skin. National Bank of Ethiopia Annual Report 2008/09 70

Meat and meat products, coffee, live animals as well as oilseeds consisted of the bulk of exports to Saudi Arabia, while meat and meat products, pulses and live animals were the major items exported to UAE. Israel mainly imported oilseeds from Ethiopia. Meanwhile, 16.6 percent of Ethiopia’s exports were destined to African countries of which about 88.6 percent went to three neighboring countries; namely, Somalia, Sudan, and Djibouti. Chat was the principal export item to Somalia followed by live animals. The major exports to Djibouti include chat, pulses and fruits and vegetables. Sudan mainly imported coffee, pulses, live animals and spices. Fig. VI.6 : Export by Destination Af rica 16.6% Oceania 0.4% Asia 35.6% Europe 41.7% America 5.7% Source: NBE staff compilation The share of the Americas in total exports was 5.7 percent, of which 73 percent was to the United States of America, 9.8 percent to Canada and 1.6 percent to Mexico. The main export items to the US were coffee and oilseeds. As for imports, Asia remained the largest supplier to Ethiopia with a share of 64.7 percent followed by Europe (24.8 percent), America (6.5 percent) and Africa (3.9 percent). Out of the total imports from Asia, about 71 percent originated from four countries; namely, China (26.2 percent), Saudi Arabia (25 percent), India (10.8 percent) and UAE (9 percent). The major import items from National Bank of Ethiopia Annual Report 2008/09 71

Meat and meat products, coffee, live animals as well as oilseeds consisted of the bulk of exports to Saudi Arabia, while meat and meat products, pulses and live animals were the major items exported to UAE. Israel mainly imported oilseeds from Ethiopia. Meanwhile, 16.6 percent of Ethiopia’s exports were destined to African countries of which about 88.6 percent went to three neighboring countries; namely, Somalia, Sudan, and Djibouti. Chat was the principal export item to Somalia followed by live animals. The major exports to Djibouti include chat, pulses and fruits and vegetables. Sudan mainly imported coffee, pulses, live animals and spices. Fig. VI.6 : Export by Destination Af rica 16.6% Oceania 0.4% Asia 35.6% Europe 41.7% America 5.7% Source: NBE staff compilation The share of the Americas in total exports was 5.7 percent, of which 73 percent was to the United States of America, 9.8 percent to Canada and 1.6 percent to Mexico. The main export items to the US were coffee and oilseeds. As for imports, Asia remained the largest supplier to Ethiopia with a share of 64.7 percent followed by Europe (24.8 percent), America (6.5 percent) and Africa (3.9 percent). Out of the total imports from Asia, about 71 percent originated from four countries; namely, China (26.2 percent), Saudi Arabia (25 percent), India (10.8 percent) and UAE (9 percent). The major import items from China included clothing and textiles, metals, telecommunication apparatus, vehicles, electric materials and machinery. More than 70 percent of imports from Saudi Arabia and 60 percent from UAE were petroleum products. Metal and metal manufacturing goods constituted the bulk of imports from India. Regarding imports from Europe, Italy accounted for 24.5 percent, Russia 9.3 percent and Turkey 8.9 percent. Machinery, metal and grain were the main import items from Europe. About 76.8 percent of import from African countries originated from three countries, viz. Egypt (29.2 percent), Sudan (28.1 percent) and South Africa (19.5 percent). Sudan’s major export to Ethiopia was petroleum products. Imports from the Americas accounted for 6.5 percent of the total imports, of which 97.5 percent was from three countries￾USA, Brazil and Canada.

Source: NBE Staff Compilation 6.3 Services and Transfers 6.3.1 Services The surplus in net services account rose 171.2 percent from USD 142.3 million in 2007/08 to USD 385.9 million in 2008/09 mainly as a result of a significant increase of net receipts from transportation and travel services coupled with a 40.2 percent decline in net payments for other services. Net receipts from transportation and travel rose 72.7 percent and 38.8 percent reflecting the effect of conference tourism and expansion in air transport services. On the other hand, net interest income registered a deficit of USD 33.4 million in the 2008/09 compared to a surplus of USD 16.6 million in the preceding year. Fig. VI.7: Imports by O rigin Af rica 3.9% Oceania 0.1% Asia 64.7% Europe 24.8% America 6.5% National Bank of Ethiopia Annual Report 2008/09 72

This was because of lower interest earned on foreign reserves due to subdued interest rates amid the global economic crisis. 6.3.2 Unrequited Transfers Net private transfers went up 13.3 percent in 2008/09. This was attributed to a 50.4 percent rise in cash transfers through non￾governmental organizations coupled with 9.7 and 18.4 percent increase in underground and in kind private transfers despite a 9.6 percent decline in cash transfers by private individuals.

Table 6. 7: Unrequited Transfers (In Millions of USD) Particulars 2006/07 2007/08 2008/09 Percentage Change C % share B % share A % share A/B100-100 A/C100-100 Private Transfers 1,728.6 59.0 2,388.3 64.5 2,706.8 63.6 13.3 56.6 Credit 1,743.7 59.1 2,418.3 64.4 2,733.3 63.6 13.0 56.8 NGO's 536.1 18.2 638.5 17.0 921.0 21.4 44.2 71.8 Cash 535.4 18.2 609.7 16.2 916.9 21.3 50.4 71.2 Other 0.0 - - Food 0.7 0.0 28.8 0.8 4.1 0.1 (85.6) 525.2 Private individuals 1,207.6 41.0 1,779.7 47.4 1,812.3 42.1 1.8 50.1 Cash 632.6 21.5 800.0 21.3 723.2 16.8 (9.6) 14.3 Inkind 58.6 2.0 165.1 4.4 195.5 4.5 18.4 233.5 Under ground Private Transfers 516.4 17.5 814.6 21.7 893.6 20.8 9.7 73.0 Debit (15.2) 73.2 (30.0) 58.0 (26.5) 63.4 (11.6) 74.9

Official Transfers 1,199.1 41.0 1,312.5 35.5 1,551.4 36.4 18.2 29.4 Credit 1,204.7 40.9 1,334.2 35.6 1,566.7 36.4 17.4 30.0 Cash 1,180.4 40.0 1,314.4 35.0 1,444.8 33.6 9.9 22.4 Other 0.7 0.0 0.8 0.0 0.2 0.0 (70.0) (62.5) Food 23.6 0.8 19.0 0.5 121.7 2.8 540.8 415.3 Debit (5.5) 26.8 (21.7) 42.0 (15.3) 36.6 (29.7) 175.3 Total Receipts 2,948.4 101 3,752.5 101 4,300.0 101 14.6 45.8 Total Payments (20.7) (0.7) (51.7) (1.4) (41.8) (1.0) (19.2) 101.8 Net Transfers 2,927.7 100 3,700.7 100 4,258.2 100 15.1 45.4 Source: Disaster Prevention and Preparedness Agency, MoFED and NBE Similarly, net official transfers were 18.2 percent up mainly as a result of higher disbursement of grants from both multilateral and bilateral donors. Official cash transfers increased 9.9 percent and reached USD 1.44 billion in 2008/09. Food aid also surged from USD 19 million to USD 121.7 million due to drought effect in some parts of the country. 6.4. Current Account In spite of the growth in the surplus of the service account and private and public transfers during the fiscal year, the current account deficit (including public transfers) widened to USD 1.5 billion in 2008/09 from USD 1.5 billion the preceding fiscal year, largely due to the widening of the trade deficit. National Bank of Ethiopia Annual Report 2008/09 73

This was because of lower interest earned on foreign reserves due to subdued interest rates amid the global economic crisis. 6.3.2 Unrequited Transfers Net private transfers went up 13.3 percent in 2008/09. This was attributed to a 50.4 percent rise in cash transfers through non￾governmental organizations coupled with 9.7 and 18.4 percent increase in underground and in kind private transfers despite a 9.6 percent decline in cash transfers by private individuals.

Table 6. 7: Unrequited Transfers (In Millions of USD) Particulars 2006/07 2007/08 2008/09 Percentage Change C % share B % share A % share A/B100-100 A/C100-100 Private Transfers 1,728.6 59.0 2,388.3 64.5 2,706.8 63.6 13.3 56.6 Credit 1,743.7 59.1 2,418.3 64.4 2,733.3 63.6 13.0 56.8 NGO's 536.1 18.2 638.5 17.0 921.0 21.4 44.2 71.8 Cash 535.4 18.2 609.7 16.2 916.9 21.3 50.4 71.2 Other 0.0 - - Food 0.7 0.0 28.8 0.8 4.1 0.1 (85.6) 525.2 Private individuals 1,207.6 41.0 1,779.7 47.4 1,812.3 42.1 1.8 50.1 Cash 632.6 21.5 800.0 21.3 723.2 16.8 (9.6) 14.3 Inkind 58.6 2.0 165.1 4.4 195.5 4.5 18.4 233.5 Under ground Private Transfers 516.4 17.5 814.6 21.7 893.6 20.8 9.7 73.0 Debit (15.2) 73.2 (30.0) 58.0 (26.5) 63.4 (11.6) 74.9

Official Transfers 1,199.1 41.0 1,312.5 35.5 1,551.4 36.4 18.2 29.4 Credit 1,204.7 40.9 1,334.2 35.6 1,566.7 36.4 17.4 30.0 Cash 1,180.4 40.0 1,314.4 35.0 1,444.8 33.6 9.9 22.4 Other 0.7 0.0 0.8 0.0 0.2 0.0 (70.0) (62.5) Food 23.6 0.8 19.0 0.5 121.7 2.8 540.8 415.3 Debit (5.5) 26.8 (21.7) 42.0 (15.3) 36.6 (29.7) 175.3 Total Receipts 2,948.4 101 3,752.5 101 4,300.0 101 14.6 45.8 Total Payments (20.7) (0.7) (51.7) (1.4) (41.8) (1.0) (19.2) 101.8 Net Transfers 2,927.7 100 3,700.7 100 4,258.2 100 15.1 45.4 Source: Disaster Prevention and Preparedness Agency, MoFED and NBE Similarly, net official transfers were 18.2 percent up mainly as a result of higher disbursement of grants from both multilateral and bilateral donors. Official cash transfers increased 9.9 percent and reached USD 1.44 billion in 2008/09. Food aid also surged from USD 19 million to USD 121.7 million due to drought effect in some parts of the country. 6.4. Current Account In spite of the growth in the surplus of the service account and private and public transfers during the fiscal year, the current account deficit (including public transfers) widened to USD 1.5 billion in 2008/09 from USD 1.5 billion the preceding fiscal year, largely due to the widening of the trade deficit. 6.5 Capital Account The surplus in the capital account significantly rose 57.7 percent to reach USD 1.66 billion reflecting higher official long￾term capital inflows and a modest increase in estimated inflow of foreign direct investment. Net official long-term capital increased 123.7 percent to USD 739.3 million as disbursement of loans was 107.1 percent up and amortization payments 10 percent down. 6.6 Changes in Reserve Position As a result of the surplus in the balance of payments, the net foreign assets of the banking system went up by USD 376.8 million. Net foreign assets of the NBE increased by USD 429 million, whereas that of commercial banks declined by USD 52.1 million. Hence, by end 2008/09, gross foreign reserves of NBE was adequate to cover 2.0 months of imports of goods and non-factor services. 6.7 External Debt By end 2008/09, Ethiopia’s stock of external debt reached USD 3.3 billion, 20 percent higher than last year. External debt as a proportion of GDP declined from 12.3 percent to 10.5 percent. The ratio of the stock of debt to export of goods and non￾factor services, however, didn’t show any significant change over last year. Debt owed to multilateral creditors, constituted 61.4 percent of the total debt and it showed an increase of 32.5 percent. Similarly, debt owed to bilateral creditors rose 7.8 percent and accounted for 30.9 percent of the total debt. On the other hand, commercial debt, which accounted for just 7.7 percent of the total debt, depicted a 7.6 percent decline.

The debt service ratio (the ratio of principal and interest payments on external debt to export of goods and non-factor services) fell from 2.5 percent in 2007/08 to 1.4 percent in 2008/09 as a result of lower debt service payments. National Bank of Ethiopia Annual Report 2008/09 74

Table 6.8 External Public Debt (In Million of USD) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Debt Outstanding Lender Total 2,300.3 2,753.6 3,304.6 20.0 43.7 Multilateral 1,188.6 1,531.2 2,029.1 32.5 70.7 Bilateral 663.9 946.7 1,020.5 7.8 53.7 Commercial 447.8 275.8 254.9 -7.6 -43.1 Drawing by Lender 325.7 394.8 650.4 64.7 99.7 Lender Total 325.7 394.8 650.4 64.7 99.7 Drawing by Sector 325.7 394.8 650.4 64.7 99.7 Sector Total 325.7 394.8 650.4 64.7 99.7 Debt Service 29.8 76.7 47.7 -37.8 60.1 Principal repayments 17.8 46.8 22.2 -52.5 24.8 Interest payments 12.0 30.0 25.5 -15.1 112.3 Debt stock to GDP ratio (in %) 11.8 12.3 10.5 -14.9 -11.3 Debt stock to export of goods and non-factor services 0.9 0.9 1.0 8.6 8.6 Receipts from goods and non-factor services 2,483.9 3,063.2 3,381.4 10.4 36.1 Debt service ratio (%)1/ 1.2 2.5 1.4 -43.6 17.6 Arrears 0.0 - - Principal 0.0 - - Interest 0.0 - - Relief 102.9 28.2 18.2 -35.5 -82.3 Principal 72.9 24.1 16.9 -29.8 -76.8 Interest 30.0 4.1 1.3 -69.0 -95.8 Source: MoFED

1. A fraction of debt service to receipts from export of goods and non-factor services
2. Outstanding as at end period 6.8 Developments in Foreign Exchange Market 6.8.1 Developments in Nominal Exchange Rate The weighted average exchange rate of the Birr reached Birr 10.42/USD in 2008/09 indicating annual depreciation of 12.7 percent. The rate of depreciation during the fiscal year was relatively higher compared to 5.1 percent in 2007/08 and 1.3 percent in 2006/07. This was due to NBE’s intervention in the inter-bank foreign exchange market to reverse the appreciation of the real effective exchange rate to improve the country’s external competitiveness. National Bank of Ethiopia Annual Report 2008/09 75

Table 6.8 External Public Debt (In Million of USD) Particulars 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A Debt Outstanding Lender Total 2,300.3 2,753.6 3,304.6 20.0 43.7 Multilateral 1,188.6 1,531.2 2,029.1 32.5 70.7 Bilateral 663.9 946.7 1,020.5 7.8 53.7 Commercial 447.8 275.8 254.9 -7.6 -43.1 Drawing by Lender 325.7 394.8 650.4 64.7 99.7 Lender Total 325.7 394.8 650.4 64.7 99.7 Drawing by Sector 325.7 394.8 650.4 64.7 99.7 Sector Total 325.7 394.8 650.4 64.7 99.7 Debt Service 29.8 76.7 47.7 -37.8 60.1 Principal repayments 17.8 46.8 22.2 -52.5 24.8 Interest payments 12.0 30.0 25.5 -15.1 112.3 Debt stock to GDP ratio (in %) 11.8 12.3 10.5 -14.9 -11.3 Debt stock to export of goods and non-factor services 0.9 0.9 1.0 8.6 8.6 Receipts from goods and non-factor services 2,483.9 3,063.2 3,381.4 10.4 36.1 Debt service ratio (%)1/ 1.2 2.5 1.4 -43.6 17.6 Arrears 0.0 - - Principal 0.0 - - Interest 0.0 - - Relief 102.9 28.2 18.2 -35.5 -82.3 Principal 72.9 24.1 16.9 -29.8 -76.8 Interest 30.0 4.1 1.3 -69.0 -95.8 Source: MoFED

1. A fraction of debt service to receipts from export of goods and non-factor services
2. Outstanding as at end period 6.8 Developments in Foreign Exchange Market 6.8.1 Developments in Nominal Exchange Rate The weighted average exchange rate of the Birr reached Birr 10.42/USD in 2008/09 indicating annual depreciation of 12.7 percent. The rate of depreciation during the fiscal year was relatively higher compared to 5.1 percent in 2007/08 and 1.3 percent in 2006/07. This was due to NBE’s intervention in the inter-bank foreign exchange market to reverse the appreciation of the real effective exchange rate to improve the country’s external competitiveness. The Birr also lost ground in the parallel market as it depreciated by 23.6 percent in the fiscal year and reached Birr 11.81/USD during the review period. As a result, the premium between the official and parallel exchange rates widened to 13.4 percent from 3.4 percent last year. Table 6.9 Inter-Bank and Parallel Forex Market Exchange Rates Period Amount Traded in Millions Average of USD Weighted Rate Number of Trades Total O/w among CBs Total O/w among CBs Average Rate in Parallel Market 2006/07 8.7943 189.8 59.4 1999.5 128.0 8.9570 Qtr. I 8.6986 31.0 0.0 549.5 0.0 8.8872 Qtr. II 8.7197 34.5 0.0 576.0 0.0 8.9059 Qtr. III 8.8315 35.3 0.8 578.0 10.0 8.9553 Qtr. IV 8.9275 89.0 58.6 296.0 118.0 9.0795 2007/08 9.2441 114.4 17.9 1694 47.0 9.5569 Qtr. I 9.0344 41.1 12.6 294 28.0 9.2917 Qtr. II 9.0704 38.4 5.4 372 19.0 9.3968 Qtr. III 9.3192 28.9 512 9.9822 Qtr. IV 9.5526 6.1 516 2008/09 10.4205 18.4 0.0 0.0 11.8102 Qtr. I 9.6602 6.3 0.0 483.0 0.0 10.2623 Qtr. II 9.8670 6.0 0.0 531.0 0.0 10.7540 Qtr. III 10.9521 3.0 0.0 387.0 0.0 12.8163 Qtr. IV 11.2028 3.1 0.0 417.0 0.0 13.4083 Source: NBE The movement of the exchange rates in the forex bureaux and commercial banks was a mirror image of the exchange rate developments in the inter-bank market. Accordingly, the average buying and selling rates of forex bureaux showed an annual depreciation of about 20 percent each. The average spread between their buying and selling rates slightly narrowed down to 1.79 percent compared to 1.99 percent last year. National Bank of Ethiopia Annual Report 2008/09 76

Table 6.10: Mid Market End Period Rates (Birr per Unit of Currency) Currency 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A USD 9.0746 9.6562 11.2190 16.2 23.6 Pound Sterling 18.1673 19.2476 18.8749 -1.9 3.9 Swedish Korner 1.3209 1.6194 1.4855 -8.3 12.5 Djibouti Frank 0.0511 0.0543 0.0639 17.7 25.0 Swiss Frank 7.3615 9.4873 10.4965 10.6 42.6 Saudi Riyal 2.4195 2.5749 3.0274 17.6 25.1 UAE Dirham 2.4706 2.6287 3.0911 17.6 25.1 Canadian Dollar 8.569 9.5662 9.8201 2.7 14.6 Japanese Yen 0.0735 0.0911 0.1186 30.2 61.4 Euro 12.1989 15.2471 16.0137 5.0 31.3 SDR 13.7419 15.7388 17.6022 11.8 28.1 Source: NBE The end period exchange rate of the Birr showed depreciations against all major currencies except Pound Sterling and Swedish Kroner. The rate of depreciation was highest against Japanese Yen (30.2 percent), followed by USD (16.2 percent), SDR (11.8 percent), Swiss Frank (10.6 percent), Euro (5 percent) and Canadian Dollar (2.7 percent). This was a reflection of the depreciating USD, which is an intervention currency in Ethiopia. In contrast, the Birr appreciated 1.9 percent against Pound Sterling and 8.3 against Swedish Korner. 6.8.2. Movements in Real Effective Exchange Rate As the inflation differential with trading partners continued to widen, the real effective exchange rate appreciated by 35.5 percent in 2008/09. The rate of appreciation, however, was slower during the second half of the fiscal year as a result of faster depreciation in the nominal exchange rate and lower domestic inflation. The nominal effective exchange rate appreciated by 5.2 percent presumably reflecting the appreciation of the US dollar against major currencies. National Bank of Ethiopia Annual Report 2008/09 77

Table 6.10: Mid Market End Period Rates (Birr per Unit of Currency) Currency 2006/07 2007/08 2008/09 Percentage Change A B C C/B C/A USD 9.0746 9.6562 11.2190 16.2 23.6 Pound Sterling 18.1673 19.2476 18.8749 -1.9 3.9 Swedish Korner 1.3209 1.6194 1.4855 -8.3 12.5 Djibouti Frank 0.0511 0.0543 0.0639 17.7 25.0 Swiss Frank 7.3615 9.4873 10.4965 10.6 42.6 Saudi Riyal 2.4195 2.5749 3.0274 17.6 25.1 UAE Dirham 2.4706 2.6287 3.0911 17.6 25.1 Canadian Dollar 8.569 9.5662 9.8201 2.7 14.6 Japanese Yen 0.0735 0.0911 0.1186 30.2 61.4 Euro 12.1989 15.2471 16.0137 5.0 31.3 SDR 13.7419 15.7388 17.6022 11.8 28.1 Source: NBE The end period exchange rate of the Birr showed depreciations against all major currencies except Pound Sterling and Swedish Kroner. The rate of depreciation was highest against Japanese Yen (30.2 percent), followed by USD (16.2 percent), SDR (11.8 percent), Swiss Frank (10.6 percent), Euro (5 percent) and Canadian Dollar (2.7 percent). This was a reflection of the depreciating USD, which is an intervention currency in Ethiopia. In contrast, the Birr appreciated 1.9 percent against Pound Sterling and 8.3 against Swedish Korner. 6.8.2. Movements in Real Effective Exchange Rate As the inflation differential with trading partners continued to widen, the real effective exchange rate appreciated by 35.5 percent in 2008/09. The rate of appreciation, however, was slower during the second half of the fiscal year as a result of faster depreciation in the nominal exchange rate and lower domestic inflation. The nominal effective exchange rate appreciated by 5.2 percent presumably reflecting the appreciation of the US dollar against major currencies. Table 6. 11: Trends in Real and Nominal Effective Exchange Rates REERI NEERI Percentage Change REER NEER 2002/03 99.0 93.6 5.8 -6.4 2003/04 98.5 89.3 -0.5 -4.6 2004/05 94 83.1 -4.5 -6.9 2005/06 102.9 80.9 9.4 -2.7 2006/07 121.3 77.6 17.9 -4.1 2007/08 136.3 72.4 12.4 -6.7 2008/09 184.7 76.1 35.5 5.2

Source: NBE Staff Compilation

1. Regarding methodology of constructing effective exchange rate indices, see NBE Annual Report NBE, 2004-2005, P. 66
2. An increase in REERI and NEERI indicates appreciation and vice versa. Where: REERI = Real Effective Exchange Rate Index NEERI = Nominal Effective Exchange Rate Index 6.8.3 Foreign Exchange Transactions Foreign exchange traded in the inter-bank foreign exchange market during 2008/09 reached USD 18.4 million, significantly lower than the USD 114.4 million traded in the preceding fiscal year. This was largely due to lower foreign reserve levels at the NBE, lower foreign exchange earnings from exports and rising demand for imports. All the trade in the inter-bank market was between NBE and commercial banks. In the retail market, the amount of foreign exchange purchased by commercial banks from exporters reached USD 647.9 million, 7.1 percent higher than last year. The amount of foreign exchange sold to importers also increased 11.7 percent to USD 4.16 billion. Similarly, foreign exchange purchases and sales of forex bureaux went up by 44.1 percent reflecting the surge in travel services and growing conference tourism in the country. National Bank of Ethiopia Annual Report 2008/09 78

Table 6.12: Foreign Exchange Transactions by Commercial Banks (In Millions of USD) Commercial Banks 2006/07 2007/08 2008/09 Percentage Change A B C D E F E/C F/D Purchases Sales Purchases Sales Purchases Sales Purchases Sales Commercial Bank of Ethiopia 179.5 1574.2 225.9 2051.5 338.1 2678.5 49.7 30.6 Bank of Abyssinia 24.8 140.4 25.1 188.5 34.1 171.7 36.0 -8.9 Dashen Bank 100.4 306.1 170.6 412.4 118.5 426.2 -30.5 3.3 Awash International Bank 19.6 150.3 30.8 144.7 26.0 108.0 -15.7 -25.4 Construction and Business Bank 5.4 64.9 4.7 85.7 1.4 52.7 -71.2 -38.5 Wegagen Bank 117.1 271.3 111.1 336.4 88.4 265.1 -20.5 -21.2 United Bank 0 135.6 0 224.3 0.0 239.8 - 6.9 Development Bank 0.0 0.0 - - Nib International Bank 29.6 151.9 34.4 253.5 41.4 208.0 20.5 -18.0 Lion International Bank 0.0 4.9 - - Oromia International Bank 0.0 0.0 - - Zemen Bank 0.0 0.0 - - Cooperative Bank of Oromia 0 7.3 2.4 27.9 0.0 4.0 - -85.6 Total 476.3 2802 605.0 3724.9 647.9 4158.9 7.1 11.7 Average Exchange Rate 8.7953 8.9701 9.2504 9.4387 10.9979 11.2882 18.9 19.6 Source: NBE Table 6.13 Foreign Exchange Transactions by Foreign Exchange Bureaux of Commercial Banks (In Millions of USD) Name of Forex Bureau 2006/07 2007/08 2008/09 Percentage Change A B C D E F E/C F/D Purchases Sales Purchases Sales Purchases Sales Purchases Sales Commercial Bank of Ethiopia 8.5 13.3 31 18.2 44.3 11.7 42.9 -35.8 Bank of Abyssinia 2.3 2.7 3.7 4.7 3.4 4.1 -8.5 -12.5 Dashen Bank 11.1 2.5 13.3 8.4 16.2 16.8 21.6 99.6 Awash International Bank 0.8 1.5 2.5 2.5 1.9 6.2 -24.3 149.4 Construction and Business Bank 0.6 0.3 1 4.3 1.4 0.5 40.0 -87.8 Wegagen Bank 10.4 1.9 6.8 4.6 7.6 6.1 11.3 32.5 United Bank 6.1 1.4 10.3 5.2 12.7 5.4 23.7 3.2 Development Bank 0.0 0.0 - - Nib International Bank 24.5 1.5 28.8 2.2 51.6 6.6 79.2 200.5 Lion International Bank 0 1.2 0.1 - - Oromia International Bank 0.0 0.0 - - Zemen Bank 0.1 0.0 - - Cooperative Bank of Oromia 0.0 0.0 - - Total 64.3 25.2 97.5 50.1 140.5 57.6 44.1 15.0 Average Exchange Rate 8.7949 8.9666 9.2419 9.4255 10.4215 10.6267 12.8 12.7 Source: NBE National Bank of Ethiopia Annual Report 2008/09 79

Table 6.12: Foreign Exchange Transactions by Commercial Banks (In Millions of USD) Commercial Banks 2006/07 2007/08 2008/09 Percentage Change A B C D E F E/C F/D Purchases Sales Purchases Sales Purchases Sales Purchases Sales Commercial Bank of Ethiopia 179.5 1574.2 225.9 2051.5 338.1 2678.5 49.7 30.6 Bank of Abyssinia 24.8 140.4 25.1 188.5 34.1 171.7 36.0 -8.9 Dashen Bank 100.4 306.1 170.6 412.4 118.5 426.2 -30.5 3.3 Awash International Bank 19.6 150.3 30.8 144.7 26.0 108.0 -15.7 -25.4 Construction and Business Bank 5.4 64.9 4.7 85.7 1.4 52.7 -71.2 -38.5 Wegagen Bank 117.1 271.3 111.1 336.4 88.4 265.1 -20.5 -21.2 United Bank 0 135.6 0 224.3 0.0 239.8 - 6.9 Development Bank 0.0 0.0 - - Nib International Bank 29.6 151.9 34.4 253.5 41.4 208.0 20.5 -18.0 Lion International Bank 0.0 4.9 - - Oromia International Bank 0.0 0.0 - - Zemen Bank 0.0 0.0 - - Cooperative Bank of Oromia 0 7.3 2.4 27.9 0.0 4.0 - -85.6 Total 476.3 2802 605.0 3724.9 647.9 4158.9 7.1 11.7 Average Exchange Rate 8.7953 8.9701 9.2504 9.4387 10.9979 11.2882 18.9 19.6 Source: NBE Table 6.13 Foreign Exchange Transactions by Foreign Exchange Bureaux of Commercial Banks (In Millions of USD) Name of Forex Bureau 2006/07 2007/08 2008/09 Percentage Change A B C D E F E/C F/D Purchases Sales Purchases Sales Purchases Sales Purchases Sales Commercial Bank of Ethiopia 8.5 13.3 31 18.2 44.3 11.7 42.9 -35.8 Bank of Abyssinia 2.3 2.7 3.7 4.7 3.4 4.1 -8.5 -12.5 Dashen Bank 11.1 2.5 13.3 8.4 16.2 16.8 21.6 99.6 Awash International Bank 0.8 1.5 2.5 2.5 1.9 6.2 -24.3 149.4 Construction and Business Bank 0.6 0.3 1 4.3 1.4 0.5 40.0 -87.8 Wegagen Bank 10.4 1.9 6.8 4.6 7.6 6.1 11.3 32.5 United Bank 6.1 1.4 10.3 5.2 12.7 5.4 23.7 3.2 Development Bank 0.0 0.0 - - Nib International Bank 24.5 1.5 28.8 2.2 51.6 6.6 79.2 200.5 Lion International Bank 0 1.2 0.1 - - Oromia International Bank 0.0 0.0 - - Zemen Bank 0.1 0.0 - - Cooperative Bank of Oromia 0.0 0.0 - - Total 64.3 25.2 97.5 50.1 140.5 57.6 44.1 15.0 Average Exchange Rate 8.7949 8.9666 9.2419 9.4255 10.4215 10.6267 12.8 12.7 Source: NBE Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09

VII. GENERAL GOVERNMENT FINANCE 7.1 General The overall fiscal deficit of the general government (excluding grants) narrowed to 5.4 percent of GDP from 7 percent in 2007/08, wholly on account of a decline in government expenditure to GDP ratio from 19.1 percent in 2007/08 to 17.2 percent in 2008/09. The ratio of revenue to GDP, however, remained almost unchanged at 12.2 percent. Similarly, primary deficit, narrowed to 1.0 percent from 2.1 percent of GDP last year. The ratio of domestic debt to GDP also fell further to 14.8 percent from 15.6 percent mirroring fiscal prudence of the government. Table 7.1: Measuring Fiscal Sustainability (In %) Fiscal Year PD/GDP IP/RR Debt/GDP R (Debt) R (GDP) Exp/GDP Rev/GDP R (OR) 1996/97 4.1 11.7 29.8 3.4 24.2 19 8.1 1997/98 -1.5 9.9 24.7 7.9 -3.9 20.7 15.4 2.8 1998/99 -4.0 10.1 15.4 11.9 5.9 24.7 16.0 8.3 1999/00 -6.4 11.8 25.4 61.1 13.4 26.1 14.4 8.3 2000/01 -2.2 10.6 21.4 -7.1 2.1 23.4 15.1 7.1 2001/02 -10.7 9.7 23.2 8.2 -2.2 32.6 16.5 2.3 2002/03 -5.2 10.9 25.6 10.7 10.3 27.9 15.2 7.1 2003/04 -1.8 7.8 26.6 22.6 18.0 23.7 16.1 24.8 2004/05 -3.9 6.5 22.2 2.3 22.9 19.3 14.6 12 2005/06 -5.5 5.4 20.1 12.2 23.7 22.3 14.8 25.1 2006/07 -3.0 5.5 17.6 13.5 29.8 20.8 12.7 11.6 2007/08 -2.1 3.8 15.6 27.1 42.9 19.1 12.1 36.7 2008/09 -1.0 4.7 14.8 28.7 35.2 17.2 16.2 34.8 Source: Staff computation Definitions: PD = Primary Deficit IP/RR= Share of Iinterest Payments in Recurrent Revenue DDebt/GDP=Ratio of Domestic Debt to GDP R (Debt) = Growth Rate of Domest ic Debt R (GDP) = Growth Rate of GDP at Current Market Price Exp/GDP=Ratio of General Government Expenditure to GDP Rev/GDP= Ratio of General Government Revenue to GDP R (OR) = Growth Rate of Ordinary Revenue Note: Starting from 1997/98; the figure was based on revised GDP data National Bank of Ethiopia Annual Report 2008/09 80

In the review year, general government revenue, including grants, depicted a 37.6 percent surge to Birr 54.6 billion (or 12.2 percent of GDP) as a result of improved tax administration and economic growth. Of the total domestic revenue, about 72.2 percent was generated from taxes, and the rest from non-taxes. Tax revenue rose 21.8 percent in the fiscal year to Birr 29 billion, owing to a 40.5 percent growth in direct taxes, which constitute income and profit taxes as well as urban and rural land use fees, etc. Personal and business profit taxes alone accounted for 85 percent of the direct taxes. The share of rural land use fee, however, was merely 2.6 percent. Revenue from indirect taxes increased by 14 percent and its share in total tax revenue was 66 percent. About 62 percent of the indirect tax revenue was generated through import duties whose share dropped by about 8 percentage points against last year. Non-tax revenue went up by 86.5 percent to Birr 11.2 billion largely due to higher government investment income through residual surplus, capital charges and dividends. External grants, also showed a 45.8 percent increase over last year and well above the planned target. All in all, total revenue performance, including grants, was about 95.4 percent of the budget for 2008/09. Fig. 7.1 Trend of General Government Revenue by Component 0 10000 20000 30000 40000 50000 60000 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Fiscal Year In million birr Total Revenue and Grants Tax Revenue Direct tax revenue Indirect tax revenue Non-tax revenue Grants 7.2 Revenue and Grants National Bank of Ethiopia Annual Report 2008/09 81

In the review year, general government revenue, including grants, depicted a 37.6 percent surge to Birr 54.6 billion (or 12.2 percent of GDP) as a result of improved tax administration and economic growth. Of the total domestic revenue, about 72.2 percent was generated from taxes, and the rest from non-taxes. Tax revenue rose 21.8 percent in the fiscal year to Birr 29 billion, owing to a 40.5 percent growth in direct taxes, which constitute income and profit taxes as well as urban and rural land use fees, etc. Personal and business profit taxes alone accounted for 85 percent of the direct taxes. The share of rural land use fee, however, was merely 2.6 percent. Revenue from indirect taxes increased by 14 percent and its share in total tax revenue was 66 percent. About 62 percent of the indirect tax revenue was generated through import duties whose share dropped by about 8 percentage points against last year. Non-tax revenue went up by 86.5 percent to Birr 11.2 billion largely due to higher government investment income through residual surplus, capital charges and dividends. External grants, also showed a 45.8 percent increase over last year and well above the planned target. All in all, total revenue performance, including grants, was about 95.4 percent of the budget for 2008/09. Fig. 7.1 Trend of General Government Revenue by Component 0 10000 20000 30000 40000 50000 60000 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Fiscal Year In million birr Total Revenue and Grants Tax Revenue Direct tax revenue Indirect tax revenue Non-tax revenue Grants 7.2 Revenue and Grants Table 7.2 Summary of General Government Revenue by Component (In Million of Birr) Particulars 2007/08 2008/09 Percentage Change Perform￾ance Rate [A] [B] [C] [C/A] Pre. Act Revised Budget Pre. Act [C/B] Total Revenue and Grants 39705.0 57258.0 54628.0 37.6 95.4 Total Revenue 1/ 29794.0 43821.0 40174.0 34.8 91.7 Tax Revenue 23801.0 32382.0 28997.0 21.8 89.5

1. Direct Tax Revenue 7015.0 11108.0 9858.0 40.5 88.7 1.1 Income and Profit Taxes 6627.0 8319.4 9288.0 40.2 111.6 Personal 2667.0 2847.0 3530.0 32.4 124.0 Business 3040.0 4185.8 4327.0 42.3 103.4 Others 2/ 920.0 1286.6 1431.0 55.5 111.2 1.2 Rural Land Use Fee 149.0 187.6 239.0 60.4 127.4 1.3 Urban Land Use Fee 239.0 2601.2 331.0 38.5 12.7
2. Indirect Taxes 16785.0 21274 19139.0 14.0 90.0 2.1 Domestic Taxes 5092.0 6474.4 7325.0 43.9 113.1 2.2 Foreign Trade Taxes 11693.0 14799.6 11814.0 1.0 79.8 Import 11693.0 14799.6 11814.0 1.0 79.8 Export 0
3. Non-Tax Revenue 5993.0 11439.0 11176.0 86.5 97.7 3.1 Charges and Fees 422.0 369.8 554.0 31.3 149.8 3.2 Govt. Invt. Income 3/ 3661.0 5644.5 7277.0 98.8 128.9 3.3 Reimb. And Property Sales 355.0 3532.7 940.0 164.8 26.6 3.4 Sales of Goods & Services 389.0 566.3 878.0 125.7 155.0 3.5 Others 4/ 1166.0 1325.7 1527.0 31.0 115.2
4. Grants 9911.0 13437.1 14454.0 45.8 107.6 Source: Ministry of Finance and Economic Development 1/ It does not include privatization proceeds 2/ Others include rental income tax, with holding income tax on imports, interest income tax, capital gains tax, agricultural income and other incomes 3/ Gov. Investment income includes : Residual surplus, capital charge, interest payments and state dividend 4/ Other extra ordinary, miscellaneous, pension contribution and other revenue National Bank of Ethiopia Annual Report 2008/09 82

7.3 Expenditure General government expenditure was Birr 57.8 billion about 23.1 percent higher than Birr 46.9 billion in 2007/08 due to significant growths in all of its components. Its share in GDP slightly dropped from 18.9 percent in 2007/08 to 17.2 percent in 2008/09. Recurrent expenditure at Birr 27.2 billion went up by 19.2 percent over last fiscal year and it accounted for 47 percent of the total expenditure of the review fiscal year and 8.1 percent GDP. About 47 percent of the current expenditure went to finance poverty targeted expenditures such as education, health, roads and agriculture. Capital expenditure also witnessed 26.9 percent growth to Birr 30.6 Billion on account of higher spending in all of its components. About 77 percent of the capital spending was for poverty related programs and its share in GDP stood at about 9.1 percent in 2008/09. All in all, expenditure performance rate was 87.5 percent of the annual budget. Table 7.3 Summary of General Government Expenditure (In Million Birr) Particulars 2007/08 2008/09 Percentage Change Perform￾ance Rate [A] [B] [C] [C/A] Pre. Act Revised Budget Pre. Act [C/B] Total Expenditure 46,915 64,948 57,774 23.1 89.0

1. Current Expenditure 22,794 29974 27,176 19.2 90.7 General Services 9,128 10,226 11,261 23.4 110.1 Economic Services 3,111 3,740 3,829 23.1 102.4 Social Services 8,662 10,575 10,249 18.3 96.9 Interest and Charges 1,133 2,207 1,286 13.5 58.3 External Assistance1/ 401 - - Others (miscellaneous) 359 3,227 551 53.5
2. Capital Expenditure 24,121 34,973 30,599 26.9 87.5 Economic Development 17,729 21,291 21,812 23.0 102.4 Social Development 5,426 12,103 7,068 30.3 58.4 General Development 966 1,579 1,719 77.9 108.8 4 Special programs 0 Source: Ministry of Finance and Economic Development Note: 1/ Estimate of food & related aid National Bank of Ethiopia Annual Report 2008/09 83

7.3 Expenditure General government expenditure was Birr 57.8 billion about 23.1 percent higher than Birr 46.9 billion in 2007/08 due to significant growths in all of its components. Its share in GDP slightly dropped from 18.9 percent in 2007/08 to 17.2 percent in 2008/09. Recurrent expenditure at Birr 27.2 billion went up by 19.2 percent over last fiscal year and it accounted for 47 percent of the total expenditure of the review fiscal year and 8.1 percent GDP. About 47 percent of the current expenditure went to finance poverty targeted expenditures such as education, health, roads and agriculture. Capital expenditure also witnessed 26.9 percent growth to Birr 30.6 Billion on account of higher spending in all of its components. About 77 percent of the capital spending was for poverty related programs and its share in GDP stood at about 9.1 percent in 2008/09. All in all, expenditure performance rate was 87.5 percent of the annual budget. Table 7.3 Summary of General Government Expenditure (In Million Birr) Particulars 2007/08 2008/09 Percentage Change Perform￾ance Rate [A] [B] [C] [C/A] Pre. Act Revised Budget Pre. Act [C/B] Total Expenditure 46,915 64,948 57,774 23.1 89.0

1. Current Expenditure 22,794 29974 27,176 19.2 90.7 General Services 9,128 10,226 11,261 23.4 110.1 Economic Services 3,111 3,740 3,829 23.1 102.4 Social Services 8,662 10,575 10,249 18.3 96.9 Interest and Charges 1,133 2,207 1,286 13.5 58.3 External Assistance1/ 401 - - Others (miscellaneous) 359 3,227 551 53.5
2. Capital Expenditure 24,121 34,973 30,599 26.9 87.5 Economic Development 17,729 21,291 21,812 23.0 102.4 Social Development 5,426 12,103 7,068 30.3 58.4 General Development 966 1,579 1,719 77.9 108.8 4 Special programs 0 Source: Ministry of Finance and Economic Development Note: 1/ Estimate of food & related aid Fig. 7.2: Trends in General Government Expenditure by Component 0 10000 20000 30000 40000 50000 60000 70000 1998/99 1999/00 2000/01 2001/02 2002/03 Fiscal Year 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 In millions of Birr Total Expenditure Current Expenditure Capital Expenditure Source: MoFED Source MoFED Fig. 7.3 Trends in General Government Expenditure and Revenue (% of GDP) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Fiscal Year In Percent of GDP Expenditure/GDP Revenue/GDP Fig. 7.2: Trends in General Government Expenditure by Component 0 10000 20000 30000 40000 50000 60000 70000 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Fiscal Year In millions of Birr Total Expenditure Current Expenditure Capital Expenditure National Bank of Ethiopia Annual Report 2008/09 84

7.4 Deficit Financing In 2008/09, over all fiscal balance (including grants) showed a deficit of 3.15 billion, 56.4 percent lower than last year or 0.9 percent of GDP. The lion’s share of the deficit was financed by net external borrowings followed by privatization receipts. Meanwhile, the government repaid Birr 856 million to the domestic banking system. Table 7.4 Summary of General Government Finance (In Million Birr) Particulars 2007/08 2008/09 Percentage Change Performance Rate [A] [B] [C] [C/A] Pre. Act Revised Budget Pre. Act [C/B] Revenue and Grants 39705.0 57258.0 54627.0 37.6 95.4 Revenue 29794.0 43821.0 40174.0 34.8 91.7 Grants 9911.0 13437.0 14454.0 45.8 107.6 Total Expenditure 46915.0 64948.0 57774.0 23.1 89.0 Current Expenditure 22794.0 29974.0 27176.0 19.2 90.7 Capital Expenditure 24121.0 34973.0 30599.0 26.9 87.5 Special Programs 0.0 Overall Surplus/ Deficit (Including Grants) -7210.0 -7690.0 -3147.0 -56.4 40.9 (Excluding Grants) -17121.0 -21127.0 -17600.0 2.8 83.3 Total Financing 7210.0 7690.0 3147.0 -56.4 40.9 Net External Borrowings 2396.0 3188.0 3176.0 32.6 99.6 Gross Borrowing 1810.0 3480.0 3368.0 86.1 96.8 o/w Special Programs 0.0 Amortization Paid 402.0 457.0 371.9 -7.5 81.4 HIPC Relief 988.0 165.0 181.0 -81.7 109.7 Net Domestic Borrowings 6400.0 4482.0 -417.0 -106.5 -9.3 Banking System 3879.0 4482.0 -856.0 -122.1 -19.1 Non-Banking Systems 2521.0 0.0 440.0 -82.5 Privatization Receipts 1008.0 20.0 472.0 -53.2 2360.0 Others and Residuals -2594.0 0.0 -84.0 -96.8 Source: Ministry of Finance and Economic Development National Bank of Ethiopia Annual Report 2008/09 85

7.4 Deficit Financing In 2008/09, over all fiscal balance (including grants) showed a deficit of 3.15 billion, 56.4 percent lower than last year or 0.9 percent of GDP. The lion’s share of the deficit was financed by net external borrowings followed by privatization receipts. Meanwhile, the government repaid Birr 856 million to the domestic banking system. Table 7.4 Summary of General Government Finance (In Million Birr) Particulars 2007/08 2008/09 Percentage Change Performance Rate [A] [B] [C] [C/A] Pre. Act Revised Budget Pre. Act [C/B] Revenue and Grants 39705.0 57258.0 54627.0 37.6 95.4 Revenue 29794.0 43821.0 40174.0 34.8 91.7 Grants 9911.0 13437.0 14454.0 45.8 107.6 Total Expenditure 46915.0 64948.0 57774.0 23.1 89.0 Current Expenditure 22794.0 29974.0 27176.0 19.2 90.7 Capital Expenditure 24121.0 34973.0 30599.0 26.9 87.5 Special Programs 0.0 Overall Surplus/ Deficit (Including Grants) -7210.0 -7690.0 -3147.0 -56.4 40.9 (Excluding Grants) -17121.0 -21127.0 -17600.0 2.8 83.3 Total Financing 7210.0 7690.0 3147.0 -56.4 40.9 Net External Borrowings 2396.0 3188.0 3176.0 32.6 99.6 Gross Borrowing 1810.0 3480.0 3368.0 86.1 96.8 o/w Special Programs 0.0 Amortization Paid 402.0 457.0 371.9 -7.5 81.4 HIPC Relief 988.0 165.0 181.0 -81.7 109.7 Net Domestic Borrowings 6400.0 4482.0 -417.0 -106.5 -9.3 Banking System 3879.0 4482.0 -856.0 -122.1 -19.1 Non-Banking Systems 2521.0 0.0 440.0 -82.5 Privatization Receipts 1008.0 20.0 472.0 -53.2 2360.0 Others and Residuals -2594.0 0.0 -84.0 -96.8 Source: Ministry of Finance and Economic Development Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09

VIII. INVESTMENT Investment in Ethiopia has been steadily increasing over the past seven years owing to favorable investment climate. There are visible trends that Ethiopia is becoming an investment hub in the Horn of Africa. Ethiopian Investment Agency and Regional Investment Offices issued licenses to 43,603 investment projects with an aggregate capital of Birr 732.7 billion during 1992/93 2008/09. Of these projects, 84.8 percent were domestic, 15 percent foreign and 0.2 percent public. In terms of investment capital, Birr 341.2 billion (or 46.5 percent) was domestic, Birr 273.6 billion (or 37 percent) foreign and Birr 117.9 billion (or 16.1 percent) public (Table 8.1). With regard to investment capital, domestic investment accounted for Birr 83.6 billion (or 34.9 percent) followed by foreign projects (Birr 73.1 billion or 30.5 percent). During the review period, 10 public projects with Birr 82.8 billion were also approved.

In 2008/09 alone, a total of 8,807 investment projects with an outlay of Birr 239.5 billion were approved. Domestic investment accounted for more than 81.6 percent of the total projects approved during the review fiscal year. The number of foreign projects was 1,613, which is 40.3 percent higher than in the same period of last year. Upon going operational, the approved investment projects are expected to create job opportunities for 614,172 permanent and 1,166,468 casual workers (Table 8.2). National Bank of Ethiopia Annual Report 2008/09 86

Table 8.1: Number and Investment Capital of Approved Projects by Ownership during 1992/93 - 2008/09 (Capital in Millions of Birr) Fiscal Year Domestic projects Foreign Projects Public Projects Total Projects No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital 1992/93 542 3,750.00 3 233.00.00 545 3,983.00 1993/94 521 2,926.00 4 438.00 1 57.00 526 3,421.00 1994/95 684 4,794.00 7 505.00 2 39.00 693 5,338.00 1995/96 897 6,050.00 10 434.00 1 6.00 908 6,490.00 1996/97 752 4,447.00 42 2,268.00 1 7.00 795 6,722.00 1997/98 816 5,819.00 81 4,106.00 1 14.00 898 9,939.00 1998/99 674 3,765.00 30 1,380.00 9 4,915.00 713 10,060.00 1999/00 561 6,740.00 54 1,627.00 9 5,760.00 624 14,127.00 2000/01 635 5,675.70 45 2,923.30 7 257.00 687 8,856.00 2001/02 756 6,117.30 35 1,474.10 10 1,598.80 801 9,190.20 2002/03 1,127 9,362.93 84 3,368.82 6 706.11 1,217 13,437.86 2003/04 1,862 12,177.74 347 7,205.22 16 1,837.04 2,225 21,220.00 2004/05 2,240 19,571.66 622 15,405.12 10 1,486.48 2,872 36,463.26 2005/06 5,100 41,841.14 753 19,980.06 6 18,215.08 5,859 80,036.28 2006/07 5,322 46,630.06 1,150 46,948.95 0 0.00 6,472 93,579.01 2007/08 7,307 77,868.16 1,651 92,248.78 3 261.56 8,961 170,378.50 2008/09 7,184 83,630.17 1,613 73,111.10 10 82,783.52 8,807 239,524.78 Average Annual 2,175 20,069 384 16,097 5 6,938 2,565 43,104 Cumulative 36,980 341,166 6,531 273,656 92 117,944 43,603 732,766 Source: Ethiopian Investment Agency National Bank of Ethiopia Annual Report 2008/09 87

Table 8.1: Number and Investment Capital of Approved Projects by Ownership during 1992/93 - 2008/09 (Capital in Millions of Birr) Fiscal Year Domestic projects Foreign Projects Public Projects Total Projects No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital 1992/93 542 3,750.00 3 233.00.00 545 3,983.00 1993/94 521 2,926.00 4 438.00 1 57.00 526 3,421.00 1994/95 684 4,794.00 7 505.00 2 39.00 693 5,338.00 1995/96 897 6,050.00 10 434.00 1 6.00 908 6,490.00 1996/97 752 4,447.00 42 2,268.00 1 7.00 795 6,722.00 1997/98 816 5,819.00 81 4,106.00 1 14.00 898 9,939.00 1998/99 674 3,765.00 30 1,380.00 9 4,915.00 713 10,060.00 1999/00 561 6,740.00 54 1,627.00 9 5,760.00 624 14,127.00 2000/01 635 5,675.70 45 2,923.30 7 257.00 687 8,856.00 2001/02 756 6,117.30 35 1,474.10 10 1,598.80 801 9,190.20 2002/03 1,127 9,362.93 84 3,368.82 6 706.11 1,217 13,437.86 2003/04 1,862 12,177.74 347 7,205.22 16 1,837.04 2,225 21,220.00 2004/05 2,240 19,571.66 622 15,405.12 10 1,486.48 2,872 36,463.26 2005/06 5,100 41,841.14 753 19,980.06 6 18,215.08 5,859 80,036.28 2006/07 5,322 46,630.06 1,150 46,948.95 0 0.00 6,472 93,579.01 2007/08 7,307 77,868.16 1,651 92,248.78 3 261.56 8,961 170,378.50 2008/09 7,184 83,630.17 1,613 73,111.10 10 82,783.52 8,807 239,524.78 Average Annual 2,175 20,069 384 16,097 5 6,938 2,565 43,104 Cumulative 36,980 341,166 6,531 273,656 92 117,944 43,603 732,766 Source: Ethiopian Investment Agency Fig 1 Approved investment projects by source 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 8000 8500 9000 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year Number of investment Projects Domestic Foreign Public Total Fig 2 Capital of Approved Investment Projects by Source 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 110000 120000 130000 140000 150000 160000 170000 180000 190000 200000 210000 220000 230000 240000 250000 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Year In Millions of Birr Domestic Foreign Public Total National Bank of Ethiopia Annual Report 2008/09 88

Table 8.2 Number, Capital and Expected Employment 2006/07 2007/08 2008/09 Percentage change A B C C/A C/B Total Investment Number 6472 8961 8807 36.08 -1.72 Capital 93579.0 170378.5 239524.8 155.96 40.58 Permanent Workers 302598 592188 614172 102.97 3.71 Casual Workers 461341 1148119 1166468 152.84 1.60 Total Private Number 6472 8958 8797 35.92 -1.80 Capital 93579.0 170116.9 156741.3 67.5 -7.86 Permanent Workers 302598 592117 405296 33.94 -31.55 Casual Workers 461341 1148084 868166 88.18 -24.38 Domestic Number 5322 7307 7184 34.99 -1.68 Capital 46630.06 77868.16 83630.17 79.35 7.40 Permanent Workers 200592 263205 196420 -2.08 -25.37 Casual Workers 330989 646209 569864 72.17 -11.81 Foreign Number 1150 1651 1613 40.26 -2.30 Capital 46948.95 92248.78 73111.10 55.72 -20.75 Permanent Workers 102006 328912 208876 104.77 -36.49 Casual Workers 130352 501875 298302 128.84 -40.56 Public Number - 3 10 - 233.33 Capital - 261.56 82783.52 - 31549.79 Permanent Workers - 71 208876 - 294091.55 Casual Workers - 35 298302 - 852191.43 Source: Ethiopian Investment Agency 8.1. Investment by Sector (capital in millions of Birr) Sector-wise, 2,455 projects (about 27.8 percent) were in agriculture, hunting and forestry followed by manufacturing (20.5 percent), real estate development, renting and business activities (17.1 percent), hotel and restaurants (12.4 percent) and construction (9.4 percent). In terms of capital, construction, manufacturing, and agriculture, hunting and forestry appeared to dominate with a respective share of 33.9 percent, 24.4 percent and 19.7 percent. National Bank of Ethiopia Annual Report 2008/09 89

Table 8.2 Number, Capital and Expected Employment 2006/07 2007/08 2008/09 Percentage change A B C C/A C/B Total Investment Number 6472 8961 8807 36.08 -1.72 Capital 93579.0 170378.5 239524.8 155.96 40.58 Permanent Workers 302598 592188 614172 102.97 3.71 Casual Workers 461341 1148119 1166468 152.84 1.60 Total Private Number 6472 8958 8797 35.92 -1.80 Capital 93579.0 170116.9 156741.3 67.5 -7.86 Permanent Workers 302598 592117 405296 33.94 -31.55 Casual Workers 461341 1148084 868166 88.18 -24.38 Domestic Number 5322 7307 7184 34.99 -1.68 Capital 46630.06 77868.16 83630.17 79.35 7.40 Permanent Workers 200592 263205 196420 -2.08 -25.37 Casual Workers 330989 646209 569864 72.17 -11.81 Foreign Number 1150 1651 1613 40.26 -2.30 Capital 46948.95 92248.78 73111.10 55.72 -20.75 Permanent Workers 102006 328912 208876 104.77 -36.49 Casual Workers 130352 501875 298302 128.84 -40.56 Public Number

3 10

• 233.33 Capital
• 261.56 82783.52
• 31549.79 Permanent Workers
• 71 208876
• 294091.55 Casual Workers
• 35 298302
• 852191.43 Source: Ethiopian Investment Agency 8.1. Investment by Sector (capital in millions of Birr) Sector-wise, 2,455 projects (about 27.8 percent) were in agriculture, hunting and forestry followed by manufacturing (20.5 percent), real estate development, renting and business activities (17.1 percent), hotel and restaurants (12.4 percent) and construction (9.4 percent). In terms of capital, construction, manufacturing, and agriculture, hunting and forestry appeared to dominate with a respective share of 33.9 percent, 24.4 percent and 19.7 percent. Table 8.3: Number and Capital of Investment Projects Approved by Sector (Capital in millions of Birr) Sectors 2006/07 2007/08 2008/09 Percentage Share No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Manufacturing 1260 37382.24 1998 64473.36 1804 58351.11 20.48 24.36 Agriculture, hunting and forestry 1103 14379.60 2133 36980.35 2455 47153.74 27.88 19.69 Real estate, renting and Business activities 2568 24523.46 1780 40428.50 1506 21489.76 17.10 8.97 Hotel and restaurants 515 9205.80 1339 17564.73 1091 10466.32 12.39 4.37 Education 327 2037.99 324 1562.96 249 5664.00 2.83 2.36 Health and social work 149 2700.50 175 1516.30 155 2255.24 1.76 0.94 Construction 283 1878.30 582 3173.49 826 81162.70 9.38 33.88 Wholesale, retail trade and repair service 115 504.96 268 797.66 242 2712.63 2.75 1.13 Transport, storage and communication 86 270.32 184 483.49 346 1510.43 3.93 0.63 Fishing 5 100.30 2 3.91 7 100.21 0.08 0.04 Mining and quarrying 13 179.11 38 516.20 25 317.84 0.28 0.13 Electricity, gas, steam and water supply 4 37.79 4 2486.70 12 7825.13 0.14 3.27 Public administration and defense; compulsory social security 1 8.25 0 0.00 Other community, social and personal service activities 44 378.55 133 382.60 89 515.68 1.01 0.22 Grand Total 6472 93579 8961 170378.5 8807 239524.78 100.0 100.0 Source: Ethiopian Investment Agency National Bank of Ethiopia Annual Report 2008/09 90

Fig. 3 Distribution of Investment by Sector in 2008/09 Manufacturing 21% Agriculture, hunting and forestry 28% Real estate, renting and Business activities 18% Transport, storage and communication 4% Wholesale, retail trade and repair service 3% Construction 10% Education 3% Hotel and restaurants 13% 8.2.Distribution of Investment by Region Regional distribution of investment projects revealed that Addis Ababa attracted 2,773 projects (about 31.5 percent) and Birr 120.5 billion investment capital (50.3 percent) during the review fiscal year. The other major investment destinations were Oromia, Amhara, Tigray and SNNP (Table 8.4). National Bank of Ethiopia Annual Report 2008/09 91

Fig. 3 Distribution of Investment by Sector in 2008/09 Manufacturing 21% Agriculture, hunting and forestry 28% Real estate, renting and Business activities 18% Transport, storage and communication 4% Wholesale, retail trade and repair service 3% Construction 10% Education 3% Hotel and restaurants 13% 8.2.Distribution of Investment by Region Regional distribution of investment projects revealed that Addis Ababa attracted 2,773 projects (about 31.5 percent) and Birr 120.5 billion investment capital (50.3 percent) during the review fiscal year. The other major investment destinations were Oromia, Amhara, Tigray and SNNP (Table 8.4). Table 8.4: Number and Capital of Approved Projects by Region (Capital in millions of Birr) Regions 2006/07 2007/08 2008/09 Percentage Share No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Tigray 375 4614.66 270 3999.07 543.00 10862.84 6.17 4.54 Afar 28 102.97 20 390.44 46.00 4879.97 0.52 2.04 Amhara 662 12643.20 1298 12267.48 1425.00 12167.21 16.18 5.08 Oromia 899 25477.20 2977 70776.35 2689.00 63572.54 30.53 26.54 Somali 9 43.40 39 188.50 11.00 55.86 0.12 0.02 Benshangul-Gumuz 97 370.97 152 677.66 182.00 643.90 2.07 0.27 SNNPR 634 5552.36 975 10228.71 543.00 4487.81 6.17 1.87 Gambella 10 9.99 34 349.18 132.00 681.04 1.50 0.28 Harari 34 97.84 22 57.44 0.00 0.00 Addis Ababa 3364 38161.60 2621 47388.62 2773.00 120471.29 31.49 50.30 Dire Dawa 121 1194.40 248 3689.49 190.00 8078.89 2.16 3.37 Multiregional Projects 239 5310.26 305 20365.55 273.00 13623.43 3.10 5.69 Grand Total 6472 93578.85 8961 170378.50 8807.00 239524.78 100.00 100.00 Source: Ethiopian Investment Agency National Bank of Ethiopia Annual Report 2008/09 92

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09

National Bank of Ethiopia Annual Report 2008/09

IX. INTERNATIONAL DEVELOPMENTS 9.1 Int’l Economic Developments 9.1.1 Overview of World Economy 3 In 2008 the financial market turbulence intensified and reached levels not seen in decades with severe consequences for the real economy in the latter part of the year. In the first half of the year, the economic weakness in the United States extended beyond the housing financial turmoil translated into a slowdown in economic growth in major developed economies. Overall, global economic activity remained relatively well supported by the resilience in the economic conditions of emerging markets. However, from mid-September, when the financial crisis resulted in the collapse of a major US investment bank and the unraveling of a number of large actors in the global financial system, the challenges facing economic activity intensified. Global economic conditions deteriorated rapidly in view of faltering consumer and business confidence, tighter credit conditions worldwide and adverse wealth effects 3 Excerpted from ECB, Annual Re￾port 2008 stemming from declining house prices and equity valuations. While important and unprecedented measures were taken by governments and central banks around the world to limit systemic risks and to restore financial stability, the financial market turmoil led to the global downturn becoming increasingly synchronized, which amplified the adverse feedback between the financial crisis and real economic activity. Towards the end of the year, most advanced economies were already in or on the brink of recession. Moreover, the economic weakness began to spread more forcefully to emerging economies. In particular, economic conditions in countries with large external and domestic imbalances deteriorated rapidly and economic growth in small open economies moderated significantly in a very short space of time. In the United States, economic activity decelerated markedly in 2008. Real GDP increased by 0.4 percent during the whole year. While there was positive growth in the first half of the year partly due to temporary fiscal stimulus measures and support from National Bank of Ethiopia Annual Report 2008/09 93

foreign trade, intensifying financial market strains, restrictive credit conditions and weaker foreign demand all contributed to an outright contraction in output throughout the second half of 2008. Private consumption was negatively affected by deteriorating consumer sentiment and labour market conditions, in addition to a decline in household wealth owing to falling house prices and equity valuations. Foreign trade was a major contributor to growth throughout most of 2008, reflecting buoyant external demand earlier in the year and the lagged effects of past US dollar depreciation. However, the positive trade effect faded towards the end of the year as a sharp economic slowdown in a number of US trading partners weighed on foreign demand and exports. Table 9.1Overview of World Economic Outlook and Projection (Annual Percentage Change) 2007 2008 Projection 2009 2010 World Output 5.2 3.0 -1.1 3.1 Advanced Economies 2.7 0.6 -3.4 1.3 United States 2.1 0.4 -2.7 1.5 Euro Area 2.7 0.7 -4.2 0.3 Japan 2.3 -0.7 -5.4 1.7 Other Emerging Markets and Developing Countries 8.3 6.0 1.7 5.1 World Trade Volume (goods and services) 7.3 3.0 -11.9 2.5 Import Advanced Economies 4.7 0.5 -13.7 1.2 Other Emerging Markets and Developing Countries 13.8 9.4 -9.5 4.6 Export Advanced Economies 6.3 1.9 -13.6 2.0 Other Emerging Markets and Developing Countries 9.8 4.6 -7.2 3.6 Commodity Prices Oil 10.7 36.4 -36.6 24.3 Non-oil 14.1 7.5 -20.3 2.4 Consumer Price Advanced Economies 2.2 3.4 0.1 1.1 Other Emerging Markets and Developing Countries 6.4 9.3 5.5 4.9 Source: IMF, World Economic Outlook, October 2009 National Bank of Ethiopia Annual Report 2008/09 94

foreign trade, intensifying financial market strains, restrictive credit conditions and weaker foreign demand all contributed to an outright contraction in output throughout the second half of 2008. Private consumption was negatively affected by deteriorating consumer sentiment and labour market conditions, in addition to a decline in household wealth owing to falling house prices and equity valuations. Foreign trade was a major contributor to growth throughout most of 2008, reflecting buoyant external demand earlier in the year and the lagged effects of past US dollar depreciation. However, the positive trade effect faded towards the end of the year as a sharp economic slowdown in a number of US trading partners weighed on foreign demand and exports. Table 9.1Overview of World Economic Outlook and Projection (Annual Percentage Change) 2007 2008 Projection 2009 2010 World Output 5.2 3.0 -1.1 3.1 Advanced Economies 2.7 0.6 -3.4 1.3 United States 2.1 0.4 -2.7 1.5 Euro Area 2.7 0.7 -4.2 0.3 Japan 2.3 -0.7 -5.4 1.7 Other Emerging Markets and Developing Countries 8.3 6.0 1.7 5.1 World Trade Volume (goods and services) 7.3 3.0 -11.9 2.5 Import Advanced Economies 4.7 0.5 -13.7 1.2 Other Emerging Markets and Developing Countries 13.8 9.4 -9.5 4.6 Export Advanced Economies 6.3 1.9 -13.6 2.0 Other Emerging Markets and Developing Countries 9.8 4.6 -7.2 3.6 Commodity Prices Oil 10.7 36.4 -36.6 24.3 Non-oil 14.1 7.5 -20.3 2.4 Consumer Price Advanced Economies 2.2 3.4 0.1 1.1 Other Emerging Markets and Developing Countries 6.4 9.3 5.5 4.9 Source: IMF, World Economic Outlook, October 2009 Real GDP growth in the euro area was sustained but somewhat below trend in the first half of the year, although the impact that unusual weather conditions had on construction activity created volatility in the quarterly growth rates. Economic conditions worsened in the second half of 2008, particularly after the intensification of the financial market tensions in mid￾September. The financial crisis spread to the real economy more broadly than had previously been expected. In the third quarter real GDP in the euro area contracted by 0.2% quarter on quarter, primarily reflecting the large negative contribution of net trade, which stemmed from weak export growth combined with a strong rebound in imports. The fourth quarter saw a broad-based economic contraction amid heightened uncertainty with real GDP contracting by a further 1.5%. Overall, euro area real GDP grew by 0.8% in 2008, significantly less than the 2.7% recorded in 2007. In Japan, economic expansion ended abruptly in 2008 with slightly positive growth in the first quarter followed by a marked decrease in overall production thereafter. Strong external demand and domestic investment supported real GDP growth in the first quarter. However, substantial declines in net exports and business investment – which had been the driving force of the Japanese recovery in previous years – along with restrained consumption owing to increasing labour market uncertainty and declining real incomes offset the positive growth of the first quarter and resulted in negative GDP growth rates for the rest of the year. In the course of 2008 economic activity slowed down gradually in emerging Asia. Amid the broadening of the economic slowdown and tight global financial conditions, export growth declined sharply in the second half of the year, especially in small open economies, such as Singapore, Taiwan P.o.C. and Hong Kong S.A.R. The overall slowdown in economic activity was also driven by a weakening of domestic demand owing to deteriorating consumer and business confidence, and the downturn in real estate investment. As regards the Chinese economy, real GDP growth declined from 13% in 2007 to 9% in 2008. The economic slowdown was driven by both external and domestic factors. Growth in Africa has slowed significantly as a result of the collapse of global trade National Bank of Ethiopia Annual Report 2008/09 95

and disruptions in global financial markets, but growth is expected to regain momentum as the global recovery gets under way. The effect of the global recession was initially felt most strongly in those economies more highly integrated into global financial markets, including South Africa. Subsequently, the impact of the fall in financial flows propagated to oil exporters (including Algeria, Angola, Libya, Nigeria), manufacturing exporters (Morocco, Tunisia), and commodity exporters (Botswana) as global trade collapsed. The recent improvement in financial conditions and commodity prices, however, will help these economies recover from the damage. 9.12 World Trade Growth in the volume of world trade in goods and services slowed down to 3 percent in 2008 from 7.3 percent in 2007. The volume of world trade in goods and services is expected to decline by 12 percent in 2009 and then rise by 2.5 percent in 2010. The growth in imports of the advanced countries, which was 4.7 percent in 2007 went down to 0.5 percent in 2008. Imports in these countries are expected to fall by 13.7 percent in 2009 and thereafter rise by 1.2 percent in 2010. Similarly, the growth in exports of these countries declined to 1.9 percent in 2008 from 6.3 percent in 2007. Other emerging markets and developing countries’ exports grew by 4.6 percent in 2008 compared to 9.8 percent in 2007 while growth in their volume of imports declined to 9.4 percent from 13.8 percent in 2007. Exports of these countries are expected to slow down by 7.2 percent while their imports are also expected to decline by 9.5 percent in 2009. The US current account deficit narrowed from 5.2 percent of GDP in 2007 to 4.9 percent 2008, although this improvement was limited somewhat by the higher price of oil and other commodities during most of that period, which pushed up the average value of imported goods relative to the previous year. In 2008, the current account of the euro area recorded a deficit of €63.2 billion (or 0.7% of euro area GDP), compared with a surplus of €36.3 billion in 2007. This resulted largely from the goods balance shifting into deficit. In 2008 the goods balance recorded a deficit of €0.6 billion compared with a surplus of €56.6 billion in 2007. The weakening of National Bank of Ethiopia Annual Report 2008/09 96

and disruptions in global financial markets, but growth is expected to regain momentum as the global recovery gets under way. The effect of the global recession was initially felt most strongly in those economies more highly integrated into global financial markets, including South Africa. Subsequently, the impact of the fall in financial flows propagated to oil exporters (including Algeria, Angola, Libya, Nigeria), manufacturing exporters (Morocco, Tunisia), and commodity exporters (Botswana) as global trade collapsed. The recent improvement in financial conditions and commodity prices, however, will help these economies recover from the damage. 9.12 World Trade Growth in the volume of world trade in goods and services slowed down to 3 percent in 2008 from 7.3 percent in 2007. The volume of world trade in goods and services is expected to decline by 12 percent in 2009 and then rise by 2.5 percent in 2010. The growth in imports of the advanced countries, which was 4.7 percent in 2007 went down to 0.5 percent in 2008. Imports in these countries are expected to fall by 13.7 percent in 2009 and thereafter rise by 1.2 percent in 2010. Similarly, the growth in exports of these countries declined to 1.9 percent in 2008 from 6.3 percent in 2007. Other emerging markets and developing countries’ exports grew by 4.6 percent in 2008 compared to 9.8 percent in 2007 while growth in their volume of imports declined to 9.4 percent from 13.8 percent in 2007. Exports of these countries are expected to slow down by 7.2 percent while their imports are also expected to decline by 9.5 percent in 2009. The US current account deficit narrowed from 5.2 percent of GDP in 2007 to 4.9 percent 2008, although this improvement was limited somewhat by the higher price of oil and other commodities during most of that period, which pushed up the average value of imported goods relative to the previous year. In 2008, the current account of the euro area recorded a deficit of €63.2 billion (or 0.7% of euro area GDP), compared with a surplus of €36.3 billion in 2007. This resulted largely from the goods balance shifting into deficit. In 2008 the goods balance recorded a deficit of €0.6 billion compared with a surplus of €56.6 billion in 2007. The weakening of exports, particularly in the second half of the year, together with a robust increase in import prices in the first eight months of the year, were the main factors behind this development. On the other hand, China’s current account surplus declined to 9.8 percent in 2008 from 11 percent of GDP in 2007. 9.13 Inflation and Commodity Prices Global inflation developments were strongly affected by the sharp movements in commodity prices and global economic conditions. In the first half of 2008, global inflationary pressures mounted. In the OECD countries, annual headline inflation peaked at 4.8% in July 2008. This was mostly due to rising food and energy prices. After passing its peak in July, annual inflation in the OECD countries slowed to 1.5% in December. Excluding food and energy, consumer prices rose by 2.0% in the year to December. Emerging economies, with a higher weight of food in the consumption basket, experienced even stronger inflationary pressures. In the second half of the year, however, a sharp reversal in commodity prices associated with the global economic slowdown significantly alleviated global inflation rates. In USA, the average annual rate of change in the CPI in 2008 was 3.8%, up from 2.9% the year before. Headline inflation oscillated in a wider than usual range, reflecting volatility in oil and other commodity prices. CPI inflation was at elevated levels during the first half of 2008 and peaked at 5.6% in July amid rapidly rising energy costs. Towards the end of the year, the annual rate of change in the CPI fell sharply to 0.1% in December owing to sharp falls in commodity prices and increasing slack in the economy as the recession deepened. Excluding food and energy, annual CPI inflation stood at 2.3% in 2008 - the same as in 2007. Inflationary pressures in the euro area increased in the first half of 2008, largely as a result of a very rapid increase in international commodity prices. Average annual HICP inflation was very high in 2008, standing at 3.3%, the highest level since the introduction of the euro, after standing at 2.1 % in previous years. Inflation increased from 3.2% in January to peak at 4.0% in June and July, before declining to reach 1.6% in December. These National Bank of Ethiopia Annual Report 2008/09 97

inflation developments were driven mainly by global developments in commodity prices, especially energy and food prices. For most of 2008 the inflation rate stood significantly above the ECB’s definition of price stability, mainly on account of those commodity price developments. In China, consumer price inflation peaked at 8.7% in February 2008 but then dropped significantly in response to the stabilization of domestic food prices. In September, when inflation had receded and the global financial crisis was intensifying, Chinese authorities shifted policies towards measures aimed at enhancing economic growth. Commodity price developments attracted a great amount of attention throughout 2008. In the first half of the year, oil prices continued to surge with increasing momentum and peaked on 11 July at USD 147.5 per barrel of Brent crude oil. Thereafter, prices started to decline and the downward trend was exacerbated by the financial market turmoil. At the end of 2008, prices stood at USD 39.5 per barrel. For the year as a whole, the average price of Brent crude oil was USD 98.3, which was 35% above the average of the previous year. The prices of non-energy commodities were also extremely volatile throughout the year. The index increased strongly in the first quarter of 2008, mainly driven by agricultural commodities and moved sideways thereafter. As energy prices started to decline, non-energy commodity prices followed, with the subsequent financial market turmoil hitting metals prices in particular. In aggregate terms, non￾energy commodity prices (denominated in US dollars) increased by an average of approximately 14% in 2008 compared with the previous year. 9.14 Exchange Rates The financial turmoil in money and credit markets which started in August 2007 and its ensuing spillovers into the real economy worldwide significantly influenced developments in foreign exchange markets in 2008. More precisely, the first four months of 2008 saw the euro continue its strengthening trend established in late 2000, supported by fairly upbeat market expectations about the relative economic prospects of the euro area. Against the US dollar, the euro underwent a strong appreciation in the first eight months of the year, peaking in mid-July at USD 1.60. This appreciation was driven largely by expectations of a widening interest rate differential in favour of euro area assets, National Bank of Ethiopia Annual Report 2008/09 98

inflation developments were driven mainly by global developments in commodity prices, especially energy and food prices. For most of 2008 the inflation rate stood significantly above the ECB’s definition of price stability, mainly on account of those commodity price developments. In China, consumer price inflation peaked at 8.7% in February 2008 but then dropped significantly in response to the stabilization of domestic food prices. In September, when inflation had receded and the global financial crisis was intensifying, Chinese authorities shifted policies towards measures aimed at enhancing economic growth. Commodity price developments attracted a great amount of attention throughout 2008. In the first half of the year, oil prices continued to surge with increasing momentum and peaked on 11 July at USD 147.5 per barrel of Brent crude oil. Thereafter, prices started to decline and the downward trend was exacerbated by the financial market turmoil. At the end of 2008, prices stood at USD 39.5 per barrel. For the year as a whole, the average price of Brent crude oil was USD 98.3, which was 35% above the average of the previous year. The prices of non-energy commodities were also extremely volatile throughout the year. The index increased strongly in the first quarter of 2008, mainly driven by agricultural commodities and moved sideways thereafter. As energy prices started to decline, non-energy commodity prices followed, with the subsequent financial market turmoil hitting metals prices in particular. In aggregate terms, non￾energy commodity prices (denominated in US dollars) increased by an average of approximately 14% in 2008 compared with the previous year. 9.14 Exchange Rates The financial turmoil in money and credit markets which started in August 2007 and its ensuing spillovers into the real economy worldwide significantly influenced developments in foreign exchange markets in 2008. More precisely, the first four months of 2008 saw the euro continue its strengthening trend established in late 2000, supported by fairly upbeat market expectations about the relative economic prospects of the euro area. Against the US dollar, the euro underwent a strong appreciation in the first eight months of the year, peaking in mid-July at USD 1.60. This appreciation was driven largely by expectations of a widening interest rate differential in favour of euro area assets, reflecting market beliefs that the euro area was going to be affected by the ongoing financial turmoil to a significantly lesser extent than the United States. In the course of the autumn, renewed strains in global money and credit markets intensified the downward pressure on the euro, with the single currency reaching USD 1.25 in October. On 31 December the euro was trading at USD 1.39, which was about 5% weaker than at the beginning of 2008 and about 6% stronger than its average in 2007. The exchange rate of the US dollar against the British Pound was fairly stable at around USD 2.0/GBP for the first seven months of 2008. However, starting from end of July, the Pound continuously fell until the end of the year. The exchange rate of the Pound against the US dollar reached USD 1.46 at the end of December, which was 26% lower than at the beginning of the year. The Japanese Yen showed an appreciating trend against the US dollar for the first three months of 2008 after which it again depreciated until the end of August when it reached its beginning of year levels. In the subsequent months, it showed continuous appreciation trends until the end of the year. At the end of December, one US dollar was worth 90.8 Japanese Yen, which was a big drop from around 110 Yen at the beginning of the year. 9.15 Capital Flows In 2008, there was a big fall in net capital inflows to emerging and developing countries to USD 23.8 billion from USD 627 billion in 2007. This was mainly due to the increase in net outflows of official capital, private portfolio and other private capital which altogether offset the increase in net inflow of private direct investment (from USD 411 billion in 2007 to USD 425 billion in 2008). Net capital outflows of USD 2.2 billion are expected in 2009 as a result of net outflows in private portfolio (USD 99.8 billion) and other private capital (USD 231.6 billion) despite USD 279 million expected net inflows of private direct investment. Net capital inflows to African countries slightly dropped to USD 34.5 billion in 2008 from USD 36.6 billion in 2007 as a result of outflows in private portfolio although private direct investment inflows rose to USD 42 billion from USD 31.5 billion. Private direct investment to Africa reached USD 42 billion in 2008 which accounted National Bank of Ethiopia Annual Report 2008/09 99

for a mere 10 percent of the total private direct investment inflows to emerging and developing countries. Net capital inflows to African countries are expected to fall to USD 36.6 billion in 2009. 9.2 Implications for Ethiopia The effect of the global economic crisis began to show negative impacts on Ethiopia’s export trade towards the end of the 2008/09 fiscal year. Export earnings which used to grow by an annual average rate of about 20 percent over the past few years declined by 1.2 percent during 2008/09. The slowdown in the international prices of major export items following the global economic crisis contributed to this effect although other domestic and external factors also had some role. Similarly, remittance transfers which were significantly growing over the past couple of years declined by 9.6 percent primarily due to the global economic recession. On the other hand, the slowdown in commodity prices had some positive contribution towards easing of the balance of payments problems by reducing the country’s foreign exchange payments particularly for petroleum imports. The tightening of global credit conditions as a result of global financial crisis had no significant impact on FDI inflow into the country as reflected by 9.7 percent growth during the year. The global financial conditions are anticipated to slowly recover and will have positive impact on the prospects for Ethiopia’s external sector development particularly with respect to export revenue, FDI inflows and private remittances. National Bank of Ethiopia Annual Report 2008/09 100

for a mere 10 percent of the total private direct investment inflows to emerging and developing countries. Net capital inflows to African countries are expected to fall to USD 36.6 billion in 2009. 9.2 Implications for Ethiopia The effect of the global economic crisis began to show negative impacts on Ethiopia’s export trade towards the end of the 2008/09 fiscal year. Export earnings which used to grow by an annual average rate of about 20 percent over the past few years declined by 1.2 percent during 2008/09. The slowdown in the international prices of major export items following the global economic crisis contributed to this effect although other domestic and external factors also had some role. Similarly, remittance transfers which were significantly growing over the past couple of years declined by 9.6 percent primarily due to the global economic recession. On the other hand, the slowdown in commodity prices had some positive contribution towards easing of the balance of payments problems by reducing the country’s foreign exchange payments particularly for petroleum imports. The tightening of global credit conditions as a result of global financial crisis had no significant impact on FDI inflow into the country as reflected by 9.7 percent growth during the year. The global financial conditions are anticipated to slowly recover and will have positive impact on the prospects for Ethiopia’s external sector development particularly with respect to export revenue, FDI inflows and private remittances. OPERATIONAL RESULT OF THE NATIONAL BANK OF ETHIOPIA National Bank of Ethiopia Annual Report 2008/09 101

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Annex 1 Estimates of Agricultural Production and Cultivated Areas of Major Crops (For Private Peasant Holdings) Cult. Total Cult. Total Cult. Total Cult. Total Cult. Total Cult. Total Cult. Total Cult. Total Cult. Total Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Area 1/ Prod. 2/ Cereals 7,636.64 92,960.34 6,370.09 87,068.28 6,323.57 63,440.23 6,993.69 90,007.28 7,633.81 100,297.71 8,081.30 116,242.71 8,462.00 128,658.00 8,706.00 136,456.00 8,770.00 144,964.00 Teff 2,182.53 17,369.24 1,818.37 16,273.16 1,931.09 14,196.10 1,989.07 16,773.48 2,135.55 20,255.21 2,246.02 21,755.97 2,405.00 24,377.00 2565.00 29929.00 2481.00 30280.00 Barley 874.01 9,454.25 771.51 9,319.06 788.69 6,899.68 920.13 10,796.86 1,095.44 13280.52 997.86 12706.79 1,019.00 13521 985.00 13548.00 978.00 15194.00 Wheat 1,139.72 15,711.69 1,005.00 14,444.34 997.72 10,721.45 1,098.91 16,144.41 1,398.22 21,766.03 1,459.54 22,190.75 1,474.00 24,630.00 1425.00 23145.00 1454.00 25376.00 Maize 1,719.73 31,384.53 1,323.04 28,002.09 1,191.43 17,880.31 1,367.12 25,429.65 1,392.92 23,941.62 1,526.12 33,367.95 1,694.00 37,764.00 1767.00 37497.00 1768.00 39325.00 Sorghum 1,332.89 15,382.81 1,132.50 15,462.08 1,071.96 10,397.99 1,283.65 17,424.53 1,253.62 17,159.54 1,468.07 21,735.98 1,464.00 23,160.00 1534.00 26591.00 1615.00 28044.00 Millet 346.78 3,161.66 281.45 3,061.84 308.09 3,092.38 304.76 3,051.01 312.93 3,328.04 333.03 3,970.02 374.00 4,844.00 399.00 5380.00 408.00 5603.00 Oats 40.98 496.16 29.86 351.59 29.86 252.32 30.05 387.34 45.13 566.75 44.40 401.63 32.00 362.00 31.00 366.00 31.00 428.00 Rice N.A. N.A. 8.36 154.12 4.73 0.00 N.A 6.24 112.44 24.00 713.00 35.00 714.00 Pulses 1,233.94 10,736.14 1,001.71 10,111.89 1,026.28 8,115.08 1,082.40 10,248.58 1332.80 13,379.98 1280.33 12,637.62 1355.00 15618.00 1479.00 17534.00 1551.00 19270.00 Horse Beans 426.24 4,528.41 369.15 4,470.63 389.99 3,616.75 381.99 4,268.91 463.17 5,519.84 456.92 5,127.97 459.00 5,761.00 521.00 6887.00 539.00 6960.00 Chick Peas 211.91 1,757.34 184.80 1,798.21 140.24 1,141.28 154.28 1,359.29 167.57 1615.95 201.01 2105.85 200.00 2538 227.00 2868.00 233.00 3121.00 Haricot Beans 186.76 1,489.64 119.88 986.74 181.58 1,117.50 183.75 1,721.53 245.60 2113.47 163.68 1384.21 223.00 2227 231.00 2414.00 267.00 3298.00 Field Peas 204.76 1,413.65 175.22 1,472.70 207.05 1,393.84 211.56 1,703.65 254.37 2283.35 233.09 1822.67 221.00 2100 212.00 2319.00 231.00 2671.00 Lentils 90.21 552.91 60.14 384.30 51.43 225.87 52.06 352.75 76.64 545.55 84.90 576.03 97.00 810 107.00 941.00 95.00 948.00 Vetch 114.06 994.19 N.A. N.A. N.A Soya beans N.A. N.A. 1.77 16.21 0.94 6.95 1.03 4.57 2.61 8.33 3.33 38.12 6.00 58 8.00 84.00 6.00 79.00 00. 1202 00. 061 00. 5581 00. 741 7381 00. 421 54. 9541 64. 321 82. 0521 34. 211 55. 987 17. 28 91. 135 89. 35 93. 329 05. 38 saepssar G 00. 271 00. 02 00. 661 00. 62 782 00. 52 23. 321 49. 31 12. 34 14. 01 33. 84 20. 51 07. 18 70. 1 17. 95 52. 7 ot bi G Others 574.89 2,463.38 441.20 2,214.21 499.77 2,082.12 587.92 3,253.15 840.80 5,379.76 796.47 4,863.53 759.00 5,128.00 745.00 6,664.00 855.00 6,557.00 Neug 335.66 1,189.88 232.20 841.90 249.68 853.40 281.72 1,189.95 358.83 1,872.14 306.87 1,471.28 274.00 1,477.00 285.00 1598.00 313.00 1908.00 Linseed/Flax 130.52 640.52 98.60 510.52 131.88 427.85 142.90 773.63 250.70 1,518.64 215.11 1,259.07 174.00 1,082.00 152.00 1899.00 181.00 1560.00 Fenug 00. 361 00. 02 08. 511 33. 61 45. 421 31. 71 46. 611 45. 52 58. 231 50. 51 80. 08 25. 31 keer 38.00 294.00 Rapeseed 24.99 147.36 15.04 169.43 17.26 198.50 26.02 292.84 41.90 358.38 25.00 243.51 30.00 292.00 35.00 477.00 33.00 387.00 Sunflower 10.63 64.66 5.50 37.66 3.60 15.82 8.40 50.42 9.72 70.39 8.87 59.57 13.00 111.00 9.00 81.00 8.00 66.00 Ground nuts 17.20 152.10 16.03 132.85 14.09 107.19 20.22 207.15 27.10 290.53 35.47 341.50 37.00 510.00 40.00 447.00 42.00 469.00 Sesame 42.37 188.78 58.78 389.00 57.72 362.72 91.53 614.62 136.22 1,153.88 205.15 1,488.60 211.00 1,493.00 186.00 1868.00 278.00 2167.00 Total 9,445.47 106,159.86 7,813.00 99,394.38 7,849.62 73,637.43 8,664.01 103,509.01 9,807.41 119,057.45 10,158.10 133,743.86 10,576.00 149,404.00 10,930.00 160,654.00 11,176.00 170,791.00 Percentage change over previous period Cereals 13.18 20.08 -16.59 -6.34 -0.73 -27.14 10.60 41.88 9.15 11.43 5.86 15.90 4.71 10.68 2.88 6.06 0.74 6.23 Pulses 18.08 11.90 -18.82 -5.81 2.45 -19.75 5.47 26.29 23.13 30.55 -3.94 -5.55 5.83 23.58 9.15 12.27 4.87 9.90 Others 35.50 29.46 -23.25 -10.11 13.28 -5.97 17.64 56.24 43.01 65.37 -5.27 -9.60 -4.70 5.44 -1.84 29.95 14.77 -1.61 Total 30.85 16.46 -30.82 -29.24 7.53 1.37 12.83 39.44 27.37 57.33 3.58 12.34 4.11 11.71 3.35 7.53 2.25 6.31 Source: Central Statistical Authority (CSA). NOTE:- 1/ In Thousands of Hectars. 2/ In Thousands of Quintals.

• Estimates are corrected and adjusted based on the previous survey of CSA and the 1993/94 MOA-CSA crop assessment result. ** Unreliable estimates but included in the total " Others ". ' Meher' Season refers to the period starting from the month of September to February. 1 002 0002 9991 8991 2008/09 7991 6991 5991 4991 3991 80/ 7002 70/ 6002 60/ 5002 50/ 4002 40/ 3002 30/ 2002 20/1 002 1 0/ 0002 National Bank of Ethiopia Annual Report 2008/09 124

Annex 2 :1 Gross Domestic Product by economic activity at constant 1999/2000 prices (In '000 of Birr) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Industry/Year 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Agriculture, Hunting and Forestry 32,250,430 29,136,904 30,128,852 31,049,126 34,040,128 33,401,356 29,901,524 34,976,172 39,713,606 44,048,683 48,210,785 51,823,351 55,115,714 306, 604, 91 por C 16,169,264 16,920,357 17,712,850 20,370,597 19,616,699 16,382,222 20,568,906 24,581,979 28,261,276 31,376,815 33,883,532 36,077,300 Animal Farming and Hunting 9,729,218 9,777,523 9,911,005 9,970,214 10,214,756 10,233,477 9,864,742 10,655,444 11,287,895 11,841,028 12,773,848 13,709,294 14,675,366 Forestry 3,114,609 3,190,118 3,297,490 3,366,061 3,454,775 3,551,180 3,654,560 3,751,823 3,843,733 3,946,378 4,060,122 4,230,525 4,363,048 Fishing 22,298 24,681 23,584 23,847 23,405 23,376 18,682 13,994 15,200 13,948 15,022 20,132 25,472 Mining and Quarying 273,376 280,776 257,125 285,741 300,614 332,323 345,875 352,900 367,478 393,819 417,483 446,075 456,160 Manufacturing 2,950,933 2,954,213 3,197,170 3,435,899 3,558,514 3,604,096 3,632,647 3,872,071 4,367,069 4,829,876 5,232,876 5,606,908 6,299,128 Large and Medium Scale Manufactu 1,849,519 1,890,102 2,089,041 2,279,338 2,326,551 2,332,198 2,365,891 2,548,494 2,844,479 3,232,754 3,539,288 3,833,049 4,396,973 Small Scale and Cottage Industries 1,101,413 1,064,111 1,108,129 1,156,561 1,231,964 1,271,897 1,266,756 1,323,577 1,522,590 1,597,123 1,693,588 1,773,859 1,902,155 Electricity and Water 1,218,575 1,262,908 1,283,715 1,334,579 1,378,954 1,512,316 1,585,463 1,689,810 1,823,070 1,984,384 2,254,501 2,613,064 2,498,624 Construction 2,141,317 2,429,103 2,568,965 2,641,472 2,853,336 3,316,296 3,768,633 4,504,640 4,844,637 5,352,933 5,936,707 6,610,089 7,381,856 Whole Sale and Retail Trade 6,763,965 6,785,880 7,036,483 7,444,192 7,825,206 8,091,685 8,343,893 8,765,700 9,910,965 11,648,980 13,670,481 15,634,849 17,655,009 Hotels and Restaurants 1,246,213 1,260,851 1,232,972 1,322,084 1,430,143 1,501,141 1,595,548 1,694,446 1,890,332 2,259,504 2,822,491 3,438,052 4,401,049 Transport and Communications 2,597,298 2,717,461 2,696,793 2,940,550 3,342,390 3,530,639 3,900,197 4,271,763 5,093,869 5,383,741 5,885,995 6,706,400 7,139,958 Financial Intermediation 885,325 852,316 973,490 1,106,507 1,236,526 927,885 1,027,889 1,230,827 1,528,562 1,967,431 2,264,388 2,828,908 3,500,511 Real Estate, Renting and Business A 3,266,756 3,586,606 3,743,891 3,923,584 4,278,979 5,271,843 5,784,827 6,044,829 6,491,633 7,433,918 8,565,094 10,048,264 11,660,100 Public Administration and Defence 2,071,994 2,126,906 3,061,440 4,096,012 3,710,285 3,130,348 3,173,700 3,180,046 3,550,491 3,776,815 3,881,563 4,842,829 5,623,770 Education 1,186,129 1,253,354 1,325,176 1,414,384 1,574,327 1,694,966 1,890,836 2,107,872 2,373,260 2,577,571 3,125,116 3,637,245 4,025,738 Health and Social Work 429,236 462,614 539,284 574,877 633,465 632,678 606,149 702,461 820,832 901,555 979,057 1,183,799 1,296,714 Other Community , Social & Personal Services 1,062,687 1,081,878 1,098,674 1,149,055 1,193,335 1,254,431 1,273,093 1,334,272 1,441,679 1,573,842 1,712,808 1,903,629 2,030,146 Private Households with Employed P 152,048 159,362 162,584 165,880 172,752 192,257 200,821 204,031 210,472 224,315 239,900 253,206 254,815 Total 58,518,580 56,375,812 59,330,199 62,907,790 67,552,360 68,417,636 67,049,778 74,945,836 84,443,154 94,371,317 105,214,267 117,596,800 129,364,763 Less : FISIM 456,349 406,287 491,849 608,408 631,615 403,460 462,890 548,739 639,132 896,834 1,018,210 1,301,365 1,627,263 Value Added at Constant Basic Prices 58,062,231 55,969,524 58,838,350 62,299,383 66,920,745 68,014,176 66,586,887 74,397,096 83,804,022 93,474,483 104,196,057 116,295,435 127,737,500 Taxes on Products 3,826,144 3,778,628 3,994,247 4,348,950 5,260,353 5,260,260 5,104,028 7,023,970 7,240,071 7,433,901 7,953,307 8,531,560 7,712,997 GDP at Constant Market Prices 61,888,375 59,748,153 62,832,597 66,648,333 72,181,097 73,274,436 71,690,915 81,421,066 91,044,094 100,908,384 112,149,363 124,826,996 135,450,497 Source: Ministry of Finance & Economic Development Annex 2:2 Growth Rate Of GDP By Economic Activity at Constant Prices (%) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 90/ 8002 80/ 7002 70/ 6002 60/ 5002 50/ 4002 40/ 3002 30/ 2002 20/ 1002 10/ 0002 00/ 9991 99/ 8991 89/ 7991 r aeY/ yrt sudnI Agriculture, Hunting and Forestry (9.7) 3.4 3.1 9.6 (1.9) (10.5) 17.0 13.5 10.9 9.4 7.5 6.4 Crop (16.7) 4.6 4.7 15.0 (3.7) (16.5) 25.6 19.5 15.0 11.0 8.0 6.5 Animal Farming and Hunting 0.5 1.4 0.6 2.5 0.2 (3.6) 8.0 5.9 4.9 7.9 7.3 7.0 Forestry 2.4 3.4 2.1 2.6 2.8 2.9 2.7 2.4 2.7 2.9 4.2 3.1 Fishing 10.7 (4.4) 1.1 (1.9) (0.1) (20.1) (25.1) 8.6 (8.2) 7.7 34.0 26.5 Mining and Quarying 2.7 (8.4) 11.1 5.2 10.5 4.1 2.0 4.1 7.2 6.0 6.8 12.8 Manufacturing 0.1 8.2 7.5 3.6 1.3 0.8 6.6 12.8 10.6 8.3 7.1 9.4 Large and Medium Scale Manufacturing 2.2 10.5 9.1 2.1 0.2 1.4 7.7 11.6 13.7 9.5 8.3 10.7 Small Scale and Cottage Industries (3.4) 4.1 4.4 6.5 3.2 (0.4) 4.5 15.0 4.9 6.0 4.7 6.4 Electricity and Water 3.6 1.6 4.0 3.3 9.7 4.8 6.6 7.9 8.8 13.6 15.9 5.7 Construction 13.4 5.8 2.8 8.0 16.2 13.6 19.5 7.5 10.5 10.9 11.3 11.7 Whole Sale and Retail Trade 0.3 3.7 5.8 5.1 3.4 3.1 5.1 13.1 17.5 17.4 14.4 12.1 Hotels and Restaurants 1.2 (2.2) 7.2 8.2 5.0 6.3 6.2 11.6 19.5 24.9 21.8 23.9 Transport and Communications 4.6 (0.8) 9.0 13.7 5.6 10.5 9.5 19.2 5.7 9.3 13.9 8.7 Financial Intermediation (3.7) 14.2 13.7 11.8 (25.0) 10.8 19.7 24.2 28.7 15.1 24.9 21.4 Real Estate, Renting and Business Activities 9.8 4.4 4.8 9.1 23.2 9.7 4.5 7.4 14.5 15.2 17.3 16.1 Public Administration and Defence 2.7 43.9 33.8 (9.4) (15.6) 1.4 0.2 11.6 6.4 2.8 24.8 18.4 Education 5.7 5.7 6.7 11.3 7.7 11.6 11.5 12.6 8.6 21.2 16.4 11.4 Health and Social Work 7.8 16.6 6.6 10.2 (0.1) (4.2) 15.9 16.9 9.8 8.6 20.9 7.5 Other Community , Social & Personal Services 1.8 1.6 4.6 3.9 5.1 1.5 4.8 8.0 9.2 8.8 11.1 6.5 Private Households with Employed Persons 4.8 2.0 2.0 4.1 11.3 4.5 1.6 3.2 6.6 6.9 5.5 3.8 Total (3.7) 5.2 6.0 7.4 1.3 (2.0) 11.8 12.7 11.8 11.5 11.8 10.1 Less : FISIM (11.0) 21.1 23.7 3.8 (36.1) 14.7 18.5 16.5 40.3 13.5 27.8 22.9 Value Added at Constant Basic Prices (3.6) 5.1 5.9 7.4 1.6 (2.1) 11.7 12.6 11.5 11.5 11.6 9.9 Taxes on Products (1.2) 5.7 8.9 21.0 (0.0) (3.0) 37.6 3.1 2.7 7.0 7.3 (8.3) GDP at Constant Market Prices (3.5) 5.2 6.1 8.3 1.5 (2.2) 13.6 11.8 10.8 11.1 11.3 8.7 Source: Ministry of Finance & Economic Development National Bank of Ethiopia Annual Report 2008/09 125

Annex 2 :1 Gross Domestic Product by economic activity at constant 1999/2000 prices (In '000 of Birr) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Industry/Year 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Agriculture, Hunting and Forestry 32,250,430 29,136,904 30,128,852 31,049,126 34,040,128 33,401,356 29,901,524 34,976,172 39,713,606 44,048,683 48,210,785 51,823,351 55,115,714 306, 604, 91 por C 16,169,264 16,920,357 17,712,850 20,370,597 19,616,699 16,382,222 20,568,906 24,581,979 28,261,276 31,376,815 33,883,532 36,077,300 Animal Farming and Hunting 9,729,218 9,777,523 9,911,005 9,970,214 10,214,756 10,233,477 9,864,742 10,655,444 11,287,895 11,841,028 12,773,848 13,709,294 14,675,366 Forestry 3,114,609 3,190,118 3,297,490 3,366,061 3,454,775 3,551,180 3,654,560 3,751,823 3,843,733 3,946,378 4,060,122 4,230,525 4,363,048 Fishing 22,298 24,681 23,584 23,847 23,405 23,376 18,682 13,994 15,200 13,948 15,022 20,132 25,472 Mining and Quarying 273,376 280,776 257,125 285,741 300,614 332,323 345,875 352,900 367,478 393,819 417,483 446,075 456,160 Manufacturing 2,950,933 2,954,213 3,197,170 3,435,899 3,558,514 3,604,096 3,632,647 3,872,071 4,367,069 4,829,876 5,232,876 5,606,908 6,299,128 Large and Medium Scale Manufactu 1,849,519 1,890,102 2,089,041 2,279,338 2,326,551 2,332,198 2,365,891 2,548,494 2,844,479 3,232,754 3,539,288 3,833,049 4,396,973 Small Scale and Cottage Industries 1,101,413 1,064,111 1,108,129 1,156,561 1,231,964 1,271,897 1,266,756 1,323,577 1,522,590 1,597,123 1,693,588 1,773,859 1,902,155 Electricity and Water 1,218,575 1,262,908 1,283,715 1,334,579 1,378,954 1,512,316 1,585,463 1,689,810 1,823,070 1,984,384 2,254,501 2,613,064 2,498,624 Construction 2,141,317 2,429,103 2,568,965 2,641,472 2,853,336 3,316,296 3,768,633 4,504,640 4,844,637 5,352,933 5,936,707 6,610,089 7,381,856 Whole Sale and Retail Trade 6,763,965 6,785,880 7,036,483 7,444,192 7,825,206 8,091,685 8,343,893 8,765,700 9,910,965 11,648,980 13,670,481 15,634,849 17,655,009 Hotels and Restaurants 1,246,213 1,260,851 1,232,972 1,322,084 1,430,143 1,501,141 1,595,548 1,694,446 1,890,332 2,259,504 2,822,491 3,438,052 4,401,049 Transport and Communications 2,597,298 2,717,461 2,696,793 2,940,550 3,342,390 3,530,639 3,900,197 4,271,763 5,093,869 5,383,741 5,885,995 6,706,400 7,139,958 Financial Intermediation 885,325 852,316 973,490 1,106,507 1,236,526 927,885 1,027,889 1,230,827 1,528,562 1,967,431 2,264,388 2,828,908 3,500,511 Real Estate, Renting and Business A 3,266,756 3,586,606 3,743,891 3,923,584 4,278,979 5,271,843 5,784,827 6,044,829 6,491,633 7,433,918 8,565,094 10,048,264 11,660,100 Public Administration and Defence 2,071,994 2,126,906 3,061,440 4,096,012 3,710,285 3,130,348 3,173,700 3,180,046 3,550,491 3,776,815 3,881,563 4,842,829 5,623,770 Education 1,186,129 1,253,354 1,325,176 1,414,384 1,574,327 1,694,966 1,890,836 2,107,872 2,373,260 2,577,571 3,125,116 3,637,245 4,025,738 Health and Social Work 429,236 462,614 539,284 574,877 633,465 632,678 606,149 702,461 820,832 901,555 979,057 1,183,799 1,296,714 Other Community , Social & Personal Services 1,062,687 1,081,878 1,098,674 1,149,055 1,193,335 1,254,431 1,273,093 1,334,272 1,441,679 1,573,842 1,712,808 1,903,629 2,030,146 Private Households with Employed P 152,048 159,362 162,584 165,880 172,752 192,257 200,821 204,031 210,472 224,315 239,900 253,206 254,815 Total 58,518,580 56,375,812 59,330,199 62,907,790 67,552,360 68,417,636 67,049,778 74,945,836 84,443,154 94,371,317 105,214,267 117,596,800 129,364,763 Less : FISIM 456,349 406,287 491,849 608,408 631,615 403,460 462,890 548,739 639,132 896,834 1,018,210 1,301,365 1,627,263 Value Added at Constant Basic Prices 58,062,231 55,969,524 58,838,350 62,299,383 66,920,745 68,014,176 66,586,887 74,397,096 83,804,022 93,474,483 104,196,057 116,295,435 127,737,500 Taxes on Products 3,826,144 3,778,628 3,994,247 4,348,950 5,260,353 5,260,260 5,104,028 7,023,970 7,240,071 7,433,901 7,953,307 8,531,560 7,712,997 GDP at Constant Market Prices 61,888,375 59,748,153 62,832,597 66,648,333 72,181,097 73,274,436 71,690,915 81,421,066 91,044,094 100,908,384 112,149,363 124,826,996 135,450,497 Source: Ministry of Finance & Economic Development Annex 2:2 Growth Rate Of GDP By Economic Activity at Constant Prices (%) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 90/ 8002 80/ 7002 70/ 6002 60/ 5002 50/ 4002 40/ 3002 30/ 2002 20/ 1002 10/ 0002 00/ 9991 99/ 8991 89/ 7991 r aeY/ yrt sudnI Agriculture, Hunting and Forestry (9.7) 3.4 3.1 9.6 (1.9) (10.5) 17.0 13.5 10.9 9.4 7.5 6.4 Crop (16.7) 4.6 4.7 15.0 (3.7) (16.5) 25.6 19.5 15.0 11.0 8.0 6.5 Animal Farming and Hunting 0.5 1.4 0.6 2.5 0.2 (3.6) 8.0 5.9 4.9 7.9 7.3 7.0 Forestry 2.4 3.4 2.1 2.6 2.8 2.9 2.7 2.4 2.7 2.9 4.2 3.1 Fishing 10.7 (4.4) 1.1 (1.9) (0.1) (20.1) (25.1) 8.6 (8.2) 7.7 34.0 26.5 Mining and Quarying 2.7 (8.4) 11.1 5.2 10.5 4.1 2.0 4.1 7.2 6.0 6.8 12.8 Manufacturing 0.1 8.2 7.5 3.6 1.3 0.8 6.6 12.8 10.6 8.3 7.1 9.4 Large and Medium Scale Manufacturing 2.2 10.5 9.1 2.1 0.2 1.4 7.7 11.6 13.7 9.5 8.3 10.7 Small Scale and Cottage Industries (3.4) 4.1 4.4 6.5 3.2 (0.4) 4.5 15.0 4.9 6.0 4.7 6.4 Electricity and Water 3.6 1.6 4.0 3.3 9.7 4.8 6.6 7.9 8.8 13.6 15.9 5.7 Construction 13.4 5.8 2.8 8.0 16.2 13.6 19.5 7.5 10.5 10.9 11.3 11.7 Whole Sale and Retail Trade 0.3 3.7 5.8 5.1 3.4 3.1 5.1 13.1 17.5 17.4 14.4 12.1 Hotels and Restaurants 1.2 (2.2) 7.2 8.2 5.0 6.3 6.2 11.6 19.5 24.9 21.8 23.9 Transport and Communications 4.6 (0.8) 9.0 13.7 5.6 10.5 9.5 19.2 5.7 9.3 13.9 8.7 Financial Intermediation (3.7) 14.2 13.7 11.8 (25.0) 10.8 19.7 24.2 28.7 15.1 24.9 21.4 Real Estate, Renting and Business Activities 9.8 4.4 4.8 9.1 23.2 9.7 4.5 7.4 14.5 15.2 17.3 16.1 Public Administration and Defence 2.7 43.9 33.8 (9.4) (15.6) 1.4 0.2 11.6 6.4 2.8 24.8 18.4 Education 5.7 5.7 6.7 11.3 7.7 11.6 11.5 12.6 8.6 21.2 16.4 11.4 Health and Social Work 7.8 16.6 6.6 10.2 (0.1) (4.2) 15.9 16.9 9.8 8.6 20.9 7.5 Other Community , Social & Personal Services 1.8 1.6 4.6 3.9 5.1 1.5 4.8 8.0 9.2 8.8 11.1 6.5 Private Households with Employed Persons 4.8 2.0 2.0 4.1 11.3 4.5 1.6 3.2 6.6 6.9 5.5 3.8 Total (3.7) 5.2 6.0 7.4 1.3 (2.0) 11.8 12.7 11.8 11.5 11.8 10.1 Less : FISIM (11.0) 21.1 23.7 3.8 (36.1) 14.7 18.5 16.5 40.3 13.5 27.8 22.9 Value Added at Constant Basic Prices (3.6) 5.1 5.9 7.4 1.6 (2.1) 11.7 12.6 11.5 11.5 11.6 9.9 Taxes on Products (1.2) 5.7 8.9 21.0 (0.0) (3.0) 37.6 3.1 2.7 7.0 7.3 (8.3) GDP at Constant Market Prices (3.5) 5.2 6.1 8.3 1.5 (2.2) 13.6 11.8 10.8 11.1 11.3 8.7 Source: Ministry of Finance & Economic Development Annex 3:1 Expenditure on Gross Domestic Product at Current Market Prices (In millions of Birr) Expenditure Components E.F.Y 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 G.Y 1996/97 1997/98 1998/99 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/05 2005/06 2006/07 2007/08 2008/09 Gross National Disposable Income 63,409 59,124 62,413 72,097 74,180 72,983 82,589 95,762 121,915 150,042 197,694 280,278 380,263 899, 15 er uti dnepxE noit p musnoC 48,870 54,086 60,650 61,224 62,563 70,495 82,328 103,317 126,846 160,998 237,702 313,812 Government 4,598 5,432 9,161 11,922 9,964 9,873 9,850 11,315 13,066 15,910 17,850 24,043 27,492 Private 47,400 43,437 44,925 48,728 51,260 52,690 60,645 71,013 90,251 110,936 143,148 213,659 286,320 114, 11 noit a mr oFl ati pa Cssor G 11,747 12,883 13,516 14,594 15,925 16,040 22,070 24,483 31,894 42,650 52080.61022 75377 Resource Balance (3,882) (4,239) (7,291) (7,943) (7,962) (9,318) (10,352) (14,453) (21,699) (29,887) (33,224) (48,248) (61,052) Exports of goods and services 6,568 7,135 6,830 8,010 8,146 8,389 9,779 12,914 16,077 18,205 21,857 28,317 35,233 Impotrs of goods and services 10,450 11,374 14,120 15,953 16,108 17,707 20,131 27,367 37,776 48,092 55,082 76,564 96,285 GDP at Current Market Prices 57,776 55,534 58,789 66,648 68,027 66,557 73,432 86,661 106,473 131,641 171,834 245584.7539 336106 877, 5 sgni vaS cit se moDssor G 6,664 4,703 5,998 6,803 3,993 2,937 4,333 3,156 4,795 10,836 7882.565772 Income from RoW (Net) (126) (67) (70) (204) (281) (209) (231) (335) 107 238 415 440 (-34) Current Transfers from RoW (Net) 2,918 3,658 3,695 5,652 6,434 6,636 9,388 9,436 15,335 18,163 25,444 34,253 44,191 965, 8 sgni vaSl anoit a Nssor G 10,254 8,328 11,447 12,956 10,420 12,094 13,434 18,598 23,196 36,696 42,576 66,351 870, 45 e mocnI l anoit a Nssor G 51,954 54,981 62,095 62,789 61,569 67,973 78,850 98,113 122,181 160,063 229,240 316,933 Gross National Disposable Income 60,567 59,124 62,413 72,097 74,180 72,983 82,589 95,762 121,915 150,042 197,694 280,278 380,263 Source: Ministry of Finance and Economic Development (MoFED) Expenditure Components E.F.Y 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 / 4002 4002/ 3002 3002/ 2002 2002/ 1002 1002/ 0002 0002/ 9991 99/ 8991 89/ 7991 Y. G 05 2005/06 2006/07 2007/08 2008/09 ) 7( e mocnI el basopsi Dl an iot a Nssor G 6 16 3 (2) 13 16 27 23 32 42 34 ) 0. 6( er uti dnepxE noit p musnoC 10.7 12.1 0.9 2.2 12.7 16.8 25.5 22.8 26.9 47.6 48.9 81 t ne mnr evo G 69 30 (16) (1) (0) 15 15 22 12 35 13 ) 8( et avir P 3 8 5 3 15 17 27 23 29 49 36 3 noit a mr oFl ati pa Cssor G 10 5 8 9 1 38 11 30 34 22 35 9 ecnal a Becr uose R 72 9 0 17 11 40 50 38 11 45 27 9 seci vr es dna sdoogf o str opxE (4) 17 2 3 17 32 24 13 20 30 24 9 seci vr es dna sdoogf o srt op mI 24 13 1 10 14 36 38 27 15 39 26 ) 4( secir Pt ekr a Mt nerr uCt a PDG 6 13 2 (2) 10 18 23 24 31 43 37 Source: Ministry of Finance and Economic Development (MoFED) ) %( t ne mt sevnI dna noit p musnoC,t upt u Oet ager ggAf o set a R ht wor G 2: 3 xennA National Bank of Ethiopia Annual Report 2008/09 126

Annex 4: Balance of Payment (In Millions of Birr) Sorce: NBE Staff Compilation G.C. 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 ,2007/08 ,2008/09 EFY (1993) (1994) (1995) (1996) (1997) (1998) (2000) (2001) (2002) TRADE BALANCE -8447.3 -10621.0 -11787.3 -17121.4 -24358.3 -31186.2 -34658.8 -49409.9 -65426.2 Export(f.o.b) 3,866.6 3,864.3 4,142.4 5,176.6 7,076.3 8,683.5 10,422.3 13,549.7 15,088.9 Coffee 1520.1 1393.8 1418.3 1940.8 2900.1 3075.2 3730.5 4848.5 3917.1 Other Exports 2346.5 2470.5 2724.0 3270.5 4429.7 5608.3 6691.8 8701.2 11171.8 Imports (c.i.f.) -12,314 -14,485 -15,930 -22,298 -31,435 -39,870 -45,081 -62,960 -80,515 Fuel -2,181 -2,287 -2,468 -2,677 -5,786 -7,469 -7,696 -14,988 -13,095 Other Imports -10133.2 -12198.6 -13461.4 -19621.5 -25648.9 -32400.4 -37385.3 -47971.4 -67419.6 Net Services 724.9 893.1 309.8 2124.8 2095.0 1282.2 2024.4 1477.2 4021.3 Travel -159.1 170.5 335.5 868.2 986.6 524.3 612.1 1383.9 2166.4 Other Transportation 461.7 658.5 358.7 493.7 611.5 375.0 708.8 1195.3 2324.8 Government(n.i.e.) 951.9 962.4 450.8 1495.5 1530.1 2417.7 2276.0 1243.3 1671.4 Investment Income -428.2 -429.7 -225.7 -548.0 -309.5 -14.8 268.2 316.2 -348.0 Other Services -101.4 -468.7 -609.5 -184.6 -723.6 -2020.1 -1840.6 -2661.4 -1793.4 Net Goods & Services -7722.4 -9727.9 -11477.5 -14996.6 -22263.3 -29904.0 -32634.3 -47932.7 -61404.9 Private Transfers (net) 3158.1 2977.8 4247.0 6694.7 8848.9 10645.9 15201.6 22077.9 28204.1 C t A t B l 4564 3 6750 1 7230 6 8301 9 13414 3 19258 1 17432 8 25854 7 33200 8 Current Account Balance -4564.3 -6750.1 -7230.6 -8301.9 -13414.3 -19258.1 -17432.8 -25854.7 -33200.8 Public Transfers (net) 3289.6 3712.6 5147.4 4917.9 6488.2 6562.1 10545.6 12132.7 16171.6 Non Monetary Capital (net) 2117.4 4325.8 2471.4 3033.6 5056.3 2324.6 7022.5 9532.6 17348.8 Public long-term 1501.2 4285.4 2997.7 3347.3 3806.2 2543.5 2707.8 2832.3 7703.1 Short-term 184.0 40.4 -526.3 -313.8 -47.8 -218.9 -268.9 -829.9 333.9 2. 234 I DF 0.0 122.3 10.3 1297.8 3169.4 4583.6 7530.2 9311.8 Net errors and Omissions -564.7 1094.7 2213.8 1551.5 992.5 8888.4 893.2 1929.7 4132.1 7. 1544 6. 9522- 5. 8201 0. 3841- 4. 778- 0. 1021 0. 2062 1. 3832 0. 872 ecnal a Bll ar ev O Financing : -278.0 -2383.1 -2602.0 -1201.0 877.4 1483.0 -1028.5 2259.6 -4451.7 Monetary Authorities, net -346.1 -2964.8 -3195.8 -1903.6 152.5 1804.2 -764.8 2532.2 -4257.0 Arrears Change 9.8 83.72 0.00 Debt Relief 58.3 498.03 593.80 702.51 724.85 -321.20 -263.65 -272.61 -194.66 Cancellation 0.0 326.32 0.00 81.89 552.35 321.20 263.65 272.61 194.66 Rescheduling 477.3 171.70 593.80 620.62 172.50 0.00 (In Millions of Birr) National Bank of Ethiopia Annual Report 2008/09 127

Annex 4: Balance of Payment (In Millions of Birr) Sorce: NBE Staff Compilation G.C. 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 ,2007/08 ,2008/09 EFY (1993) (1994) (1995) (1996) (1997) (1998) (2000) (2001) (2002) TRADE BALANCE -8447.3 -10621.0 -11787.3 -17121.4 -24358.3 -31186.2 -34658.8 -49409.9 -65426.2 Export(f.o.b) 3,866.6 3,864.3 4,142.4 5,176.6 7,076.3 8,683.5 10,422.3 13,549.7 15,088.9 Coffee 1520.1 1393.8 1418.3 1940.8 2900.1 3075.2 3730.5 4848.5 3917.1 Other Exports 2346.5 2470.5 2724.0 3270.5 4429.7 5608.3 6691.8 8701.2 11171.8 Imports (c.i.f.) -12,314 -14,485 -15,930 -22,298 -31,435 -39,870 -45,081 -62,960 -80,515 Fuel -2,181 -2,287 -2,468 -2,677 -5,786 -7,469 -7,696 -14,988 -13,095 Other Imports -10133.2 -12198.6 -13461.4 -19621.5 -25648.9 -32400.4 -37385.3 -47971.4 -67419.6 Net Services 724.9 893.1 309.8 2124.8 2095.0 1282.2 2024.4 1477.2 4021.3 Travel -159.1 170.5 335.5 868.2 986.6 524.3 612.1 1383.9 2166.4 Other Transportation 461.7 658.5 358.7 493.7 611.5 375.0 708.8 1195.3 2324.8 Government(n.i.e.) 951.9 962.4 450.8 1495.5 1530.1 2417.7 2276.0 1243.3 1671.4 Investment Income -428.2 -429.7 -225.7 -548.0 -309.5 -14.8 268.2 316.2 -348.0 Other Services -101.4 -468.7 -609.5 -184.6 -723.6 -2020.1 -1840.6 -2661.4 -1793.4 Net Goods & Services -7722.4 -9727.9 -11477.5 -14996.6 -22263.3 -29904.0 -32634.3 -47932.7 -61404.9 Private Transfers (net) 3158.1 2977.8 4247.0 6694.7 8848.9 10645.9 15201.6 22077.9 28204.1 C t A t B l 4564 3 6750 1 7230 6 8301 9 13414 3 19258 1 17432 8 25854 7 33200 8 Current Account Balance -4564.3 -6750.1 -7230.6 -8301.9 -13414.3 -19258.1 -17432.8 -25854.7 -33200.8 Public Transfers (net) 3289.6 3712.6 5147.4 4917.9 6488.2 6562.1 10545.6 12132.7 16171.6 Non Monetary Capital (net) 2117.4 4325.8 2471.4 3033.6 5056.3 2324.6 7022.5 9532.6 17348.8 Public long-term 1501.2 4285.4 2997.7 3347.3 3806.2 2543.5 2707.8 2832.3 7703.1 Short-term 184.0 40.4 -526.3 -313.8 -47.8 -218.9 -268.9 -829.9 333.9 2. 234 I DF 0.0 122.3 10.3 1297.8 3169.4 4583.6 7530.2 9311.8 Net errors and Omissions -564.7 1094.7 2213.8 1551.5 992.5 8888.4 893.2 1929.7 4132.1 7. 1544 6. 9522- 5. 8201 0. 3841- 4. 778- 0. 1021 0. 2062 1. 3832 0. 872 ecnal a Bll ar ev O Financing : -278.0 -2383.1 -2602.0 -1201.0 877.4 1483.0 -1028.5 2259.6 -4451.7 Monetary Authorities, net -346.1 -2964.8 -3195.8 -1903.6 152.5 1804.2 -764.8 2532.2 -4257.0 Arrears Change 9.8 83.72 0.00 Debt Relief 58.3 498.03 593.80 702.51 724.85 -321.20 -263.65 -272.61 -194.66 Cancellation 0.0 326.32 0.00 81.89 552.35 321.20 263.65 272.61 194.66 Rescheduling 477.3 171.70 593.80 620.62 172.50 0.00 (In Millions of Birr) ANNEX 5: Summary of External Public Debt 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1986) (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) EXTERNAL DEBT Disbursed * 25722 27731.50 27088.00 26509.61 27916.88 31566.00 44647.50 46268.80 52994.25 58281.46 62187.89 52094.22 52338.62 20214.70 25455.01 34451.45 Undisbursed n.a n/a DRAWINGS ( ) 2379 1568 31 1611 32 1205 54 993 94 1730 92 1432 41 2664 84 5036 17 3922 20 4401 32 4932 18 2828 12 2528 90 3487 37 8141 85 (In Millions of Birr) DRAWINGS (gross) 2379 1568.31 1611 3. 2 1205.54 993.94 1730.92 1432.41 2664.84 5036 1. 7 3922.20 4401 3. 2 4932.18 2828.12 2528.90 3487 3. 7 8141.85 REPAYMENTS (1) -400 -856.32 -912.34 -1943.89 -623.09 -661.05 -998.91 -857.75 -595.58 -772.87 -882.22 -845.19 -660.49 -260.75 -709.12 -497.18 DEBT SERVICING (2) 1833 1759.99 1714.01 2719.35 623.09 1267.70 2227.75 1680.61 1176.96 1373.59 1584.38 1570.04 981.42 523.78 747.30 510.19 Principal 1418 1259.39 1189.27 2319.11 354.35 912.25 1748.22 1163.60 750.81 924.48 1053.97 1125.94 446.19 155.38 432.17 231.44 Interest (3) 414.7 500.60 524.74 400.24 268.74 355.46 479.53 517.00 426.15 449.11 530.41 444.10 535.23 368.40 315.13 278.75 DEBT SERVICE RATIO 56.9 30.20 34.99 49.82 15.04 18.17 25.24 22.18 15.41 22.32 17.04 11.94 7.60 2.50 5.23 3.30 RATIO OF EXTERNAL DEBT 90.8 58.31 50.73 47.87 52.52 55.13 69.84 70.44 84.57 85.53 74.13 48.93 39.76 11.75 10.24 10.25 TO GDP (%) 601633 506842 989171 146131 374601 00. 29838 00. 44186 00. 56626 00. 98656 00. 42936 00. 65275 00. 75135 00. 37355 00. 00435 00. 95574 PDG Source: Ministry of Finance and Economic Development National Bank of Ethiopia Annual Report 2008/09 128

ANNEX 5: Summary of External Public Debt 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1986) (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) EXTERNAL DEBT Disbursed * 25722 27731.50 27088.00 26509.61 27916.88 31566.00 44647.50 46268.80 52994.25 58281.46 62187.89 52094.22 52338.62 20214.70 25455.01 34451.45 Undisbursed n.a n/a DRAWINGS ( ) 2379 1568 31 1611 32 1205 54 993 94 1730 92 1432 41 2664 84 5036 17 3922 20 4401 32 4932 18 2828 12 2528 90 3487 37 8141 85 (In Millions of Birr) DRAWINGS (gross) 2379 1568.31 1611 3. 2 1205.54 993.94 1730.92 1432.41 2664.84 5036 1. 7 3922.20 4401 3. 2 4932.18 2828.12 2528.90 3487 3. 7 8141.85 REPAYMENTS (1) -400 -856.32 -912.34 -1943.89 -623.09 -661.05 -998.91 -857.75 -595.58 -772.87 -882.22 -845.19 -660.49 -260.75 -709.12 -497.18 DEBT SERVICING (2) 1833 1759.99 1714.01 2719.35 623.09 1267.70 2227.75 1680.61 1176.96 1373.59 1584.38 1570.04 981.42 523.78 747.30 510.19 Principal 1418 1259.39 1189.27 2319.11 354.35 912.25 1748.22 1163.60 750.81 924.48 1053.97 1125.94 446.19 155.38 432.17 231.44 Interest (3) 414.7 500.60 524.74 400.24 268.74 355.46 479.53 517.00 426.15 449.11 530.41 444.10 535.23 368.40 315.13 278.75 DEBT SERVICE RATIO 56.9 30.20 34.99 49.82 15.04 18.17 25.24 22.18 15.41 22.32 17.04 11.94 7.60 2.50 5.23 3.30 RATIO OF EXTERNAL DEBT 90.8 58.31 50.73 47.87 52.52 55.13 69.84 70.44 84.57 85.53 74.13 48.93 39.76 11.75 10.24 10.25 TO GDP (%) 601633 506842 989171 146131 374601 00. 29838 00. 44186 00. 56626 00. 98656 00. 42936 00. 65275 00. 75135 00. 37355 00. 00435 00. 95574 PDG Source: Ministry of Finance and Economic Development Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 1,799,034 1,724,008 2,307,394 2,889,531 2,112,713 2,133,646 1,520,101 1,393,809 1,418,324 1,926,679 2,901,327 3,076,494 3,741,745 4,897,344 3,932,045 Oilseeds 50,130 41,938 74,239 314,660 271,462 255,329 269,598 278,738 395,565 712,738 1,082,215 1,835,270 1,654,707 2,037,090 3,819,332 Hides & Skins 373,549 309,701 372,253 347,699 243,052 286,459 633,752 474,426 448,003 375,844 585,185 651,333 789,162 917,534 763,681 Pulses 103,287 77,224 87,854 102,953 101,658 80,021 72,800 281,409 171,244 194,679 306,609 320,969 619,560 1,333,631 946,804 Meat Products 6,073 12,169 24,175 29,340 31,644 32,708 14,366 9,423 20,781 66,676 126,152 160,842 135,518 193,944 273,511 Fruits & Vegetables 18,192 21,029 45,793 31,479 40,564 44,250 45,689 80,114 82,118 109,663 139,053 114,541 142,208 118,398 124,026 Sugar 2,227 #REF! 4,735 0 1,241 23,958 68,472 85,106 153,712 88,632 5,277 0 0 17,879 178,587 Flower 0 69 19,821 67,808 189,006 561,307 1,037,924 1,374,315 Live Animals 7,655 770 11,201 10,562 5,724 14,137 1,506 7,132 4,129 16,454 110,875 239,240 323,066 376,474 539,974 Chat 172,339 174,444 199,533 272,355 444,988 618,772 510,506 418,674 497,866 758,878 866,803 773,235 816,802 1,000,785 1,448,036 Petroleum Products 95,092 62,011 83,001 10,193 0 Bee's Wax 6,521 7,987 9,176 10,514 9,914 5,549 7,247 6,006 4,032 8,280 9,588 12,551 16,090 17,091 16,436 Gold 103,133 68,232 416,045 0 174,300 260,044 234,890 300,715 361,026 419,858 513,364 562,141 863,856 735,122 1,034,464 Others 97,946 107,773 266,272 122,295 200,000 202,930 487,680 528,768 585,486 478,442 617,002 749,752 793,595 960,115 766,069 RE-exports 0 Total 2,835,179 #REF! 3,901,671 4,141,582 3,637,260 3,957,802 3,866,606 3,864,320 4,142,356 5,176,644 7,331,258 8,685,376 10,457,615 13,643,332 15,217,279 Sources: Ethiopian Revenues and Customs Authority Annex 7: Quantity of Major Exports Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Annex 6: Value of Major Exports (In Thousands of Birr) (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 82,199 97,579 123,166 120,050 101,232 116,558 99,134 110,347 126,128 156,409 161,061 147,725 176,438 170,741 133,998 Oilseeds 12,132 7,832 14,069 66,554 51,366 43,131 55,051 76,604 82,801 105,945 170,798 265,649 234,976 152,091 286,987 Hides & Skins 8,387 7,547 8,648 7,852 5,824 8,604 12,409 10,334 10,545 9,401 15,644 15,396 15,774 12,299 7,293 Pulses 25,783 28,969 30,468 30,909 29,833 23,527 26,861 109,227 66,154 73,280 121,653 110,438 158,752 233,021 137,969 Meat Products 440 950 1,716 1,529 2,078 1,977 870 662 1,722 4,007 7,274 7,955 5,850 6,484 7,477 Fruits & Vegetables 19,485 19,003 21,834 17,010 19,394 20,734 17,030 29,696 25,304 36,844 37,906 34,797 40,921 39,918 38,478 Sugar 10 0 13,150 0 6,643 17,209 57,005 58,041 77,000 16,016 15,001 0 0 63,392 47,646 Gold 2 1 5 #REF! #REF! 3 5 4 6 5 6 4 5 Flower 0 6,258 13,601 22,403 29,166 Live Animals 771 183 1,305 1,324 919 1,766 214 166 607 3,141 21,226 33,294 43,665 39,969 36,729 Chat 4,073 3,698 5,031 5,981 9,702 15,684 11,928 9,377 6,106 18,515 19,390 22,259 22,667 22,406 25,400 Petroleum Products 159,745 114,514 118,090 20,976 0 Bee's Wax 301 330 314 995 350 217 311 285 184 433 383 335 415 239 213 Sources: Ethiopian Customs Authority Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 21.89 17.67 18.73 24.07 20.87 18.31 15.33 12.63 11.25 12.32 18.01 20.83 21.21 28.68 29.34 OIlseeds 4.13 5.35 5.28 4.73 5.28 5.92 4.90 3.64 4.78 6.73 6.34 6.91 7.04 13.39 13.31 Hides & Skins 44.54 41.04 43.04 44.28 41.73 33.29 51.07 45.91 42.49 39.98 37.41 42.30 50.03 74.60 104.71 Pulses 4.01 2.67 2.88 3.33 3.41 3.40 2.71 2.58 2.59 2.66 2.52 2.91 3.90 5.72 6.86 Meat Products 13.79 12.80 14.08 19.18 15.23 16.55 16.52 14.22 12.07 16.64 17.34 20.22 23.17 29.91 36.58 Fruits & Vegetables 0.93 1.11 2.10 1.85 2.09 2.13 2.68 2.70 3.25 2.98 3.67 3.29 3.48 2.97 3.22 Sugar 57. 3 53. 0 35. 5 00. 2 74. 1 02. 1 93. 1 91. 0 63. 0 07. 222 Flower 30.20 41.27 46.33 47.12 Live Animals 9.93 4.22 8.58 7.98 6.23 8.00 7.03 43.05 6.80 5.24 5.22 7.19 7.40 9.42 14.70 Chat 42.31 47.17 39.66 45.54 45.87 39.45 42.80 44.65 81.54 40.99 44.70 34.74 36.04 44.67 57.01 Gold (Birr/gr) 103,315.06 49,287.07 63,099.01 72,228.69 93,670.66 85,698.86 112,997.71 154,842.87 195,766.75 212,346.80 Petroleum Products 0.60 0.54 0.70 0.49 Bee's Wax 21.69 24.22 29.25 10.57 28.35 25.58 23.31 21.07 21.91 19.12 25.06 37.48 38.79 71.40 77.17 Annex 8: Unit Value of Export Items (Birr/Kg) Sources: Ethiopian Customs Authority National Bank of Ethiopia Annual Report 2008/09 129

ANNEX 5: Summary of External Public Debt 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1986) (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) EXTERNAL DEBT Disbursed * 25722 27731.50 27088.00 26509.61 27916.88 31566.00 44647.50 46268.80 52994.25 58281.46 62187.89 52094.22 52338.62 20214.70 25455.01 34451.45 Undisbursed n.a n/a DRAWINGS ( ) 2379 1568 31 1611 32 1205 54 993 94 1730 92 1432 41 2664 84 5036 17 3922 20 4401 32 4932 18 2828 12 2528 90 3487 37 8141 85 (In Millions of Birr) DRAWINGS (gross) 2379 1568.31 1611 3. 2 1205.54 993.94 1730.92 1432.41 2664.84 5036 1. 7 3922.20 4401 3. 2 4932.18 2828.12 2528.90 3487 3. 7 8141.85 REPAYMENTS (1) -400 -856.32 -912.34 -1943.89 -623.09 -661.05 -998.91 -857.75 -595.58 -772.87 -882.22 -845.19 -660.49 -260.75 -709.12 -497.18 DEBT SERVICING (2) 1833 1759.99 1714.01 2719.35 623.09 1267.70 2227.75 1680.61 1176.96 1373.59 1584.38 1570.04 981.42 523.78 747.30 510.19 Principal 1418 1259.39 1189.27 2319.11 354.35 912.25 1748.22 1163.60 750.81 924.48 1053.97 1125.94 446.19 155.38 432.17 231.44 Interest (3) 414.7 500.60 524.74 400.24 268.74 355.46 479.53 517.00 426.15 449.11 530.41 444.10 535.23 368.40 315.13 278.75 DEBT SERVICE RATIO 56.9 30.20 34.99 49.82 15.04 18.17 25.24 22.18 15.41 22.32 17.04 11.94 7.60 2.50 5.23 3.30 RATIO OF EXTERNAL DEBT 90.8 58.31 50.73 47.87 52.52 55.13 69.84 70.44 84.57 85.53 74.13 48.93 39.76 11.75 10.24 10.25 TO GDP (%) 601633 506842 989171 146131 374601 00. 29838 00. 44186 00. 56626 00. 98656 00. 42936 00. 65275 00. 75135 00. 37355 00. 00435 00. 95574 PDG Source: Ministry of Finance and Economic Develop ment Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 1,799,034 1,724,008 2,307,394 2,889,531 2,112,713 2,133,646 1,520,101 1,393,809 1,418,324 1,926,679 2,901,327 3,076,494 3,741,745 4,897,344 3,932,045 Oilseeds 50,130 41,938 74,239 314,660 271,462 255,329 269,598 278,738 395,565 712,738 1,082,215 1,835,270 1,654,707 2,037,090 3,819,332 Hides & Skins 373,549 309,701 372,253 347,699 243,052 286,459 633,752 474,426 448,003 375,844 585,185 651,333 789,162 917,534 763,681 Pulses 103,287 77,224 87,854 102,953 101,658 80,021 72,800 281,409 171,244 194,679 306,609 320,969 619,560 1,333,631 946,804 Meat Products 6,073 12,169 24,175 29,340 31,644 32,708 14,366 9,423 20,781 66,676 126,152 160,842 135,518 193,944 273,511 Fruits & Vegetables 18,192 21,029 45,793 31,479 40,564 44,250 45,689 80,114 82,118 109,663 139,053 114,541 142,208 118,398 124,026 Sugar 2,227 #REF! 4,735 0 1,241 23,958 68,472 85,106 153,712 88,632 5,277 0 0 17,879 178,587 Flower 0 69 19,821 67,808 189,006 561,307 1,037,924 1,374,315 Live Animals 7,655 770 11,201 10,562 5,724 14,137 1,506 7,132 4,129 16,454 110,875 239,240 323,066 376,474 539,974 Chat 172,339 174,444 199,533 272,355 444,988 618,772 510,506 418,674 497,866 758,878 866,803 773,235 816,802 1,000,785 1,448,036 Petroleum Products 95,092 62,011 83,001 10,193 0 Bee's Wax 6,521 7,987 9,176 10,514 9,914 5,549 7,247 6,006 4,032 8,280 9,588 12,551 16,090 17,091 16,436 Gold 103,133 68,232 416,045 0 174,300 260,044 234,890 300,715 361,026 419,858 513,364 562,141 863,856 735,122 1,034,464 Others 97,946 107,773 266,272 122,295 200,000 202,930 487,680 528,768 585,486 478,442 617,002 749,752 793,595 960,115 766,069 RE-exports 0 Total 2,835,179 #REF! 3,901,671 4,141,582 3,637,260 3,957,802 3,866,606 3,864,320 4,142,356 5,176,644 7,331,258 8,685,376 10,457,615 13,643,332 15,217,279 Sources: Ethiopian Revenues and Customs Authority Annex 7: Quantity of Major Exports Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Annex 6: Value of Major Exports (In Thousands of Birr) (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 82,199 97,579 123,166 120,050 101,232 116,558 99,134 110,347 126,128 156,409 161,061 147,725 176,438 170,741 133,998 Oilseeds 12,132 7,832 14,069 66,554 51,366 43,131 55,051 76,604 82,801 105,945 170,798 265,649 234,976 152,091 286,987 Hides & Skins 8,387 7,547 8,648 7,852 5,824 8,604 12,409 10,334 10,545 9,401 15,644 15,396 15,774 12,299 7,293 Pulses 25,783 28,969 30,468 30,909 29,833 23,527 26,861 109,227 66,154 73,280 121,653 110,438 158,752 233,021 137,969 Meat Products 440 950 1,716 1,529 2,078 1,977 870 662 1,722 4,007 7,274 7,955 5,850 6,484 7,477 Fruits & Vegetables 19,485 19,003 21,834 17,010 19,394 20,734 17,030 29,696 25,304 36,844 37,906 34,797 40,921 39,918 38,478 Sugar 10 0 13,150 0 6,643 17,209 57,005 58,041 77,000 16,016 15,001 0 0 63,392 47,646 Gold 2 1 5 #REF! #REF! 3 5 4 6 5 6 4 5 Flower 0 6,258 13,601 22,403 29,166 Live Animals 771 183 1,305 1,324 919 1,766 214 166 607 3,141 21,226 33,294 43,665 39,969 36,729 Chat 4,073 3,698 5,031 5,981 9,702 15,684 11,928 9,377 6,106 18,515 19,390 22,259 22,667 22,406 25,400 Petroleum Products 159,745 114,514 118,090 20,976 0 Bee's Wax 301 330 314 995 350 217 311 285 184 433 383 335 415 239 213 Sources: Ethiopian Customs Authority Commodity 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Coffee 21.89 17.67 18.73 24.07 20.87 18.31 15.33 12.63 11.25 12.32 18.01 20.83 21.21 28.68 29.34 OIlseeds 4.13 5.35 5.28 4.73 5.28 5.92 4.90 3.64 4.78 6.73 6.34 6.91 7.04 13.39 13.31 Hides & Skins 44.54 41.04 43.04 44.28 41.73 33.29 51.07 45.91 42.49 39.98 37.41 42.30 50.03 74.60 104.71 Pulses 4.01 2.67 2.88 3.33 3.41 3.40 2.71 2.58 2.59 2.66 2.52 2.91 3.90 5.72 6.86 Meat Products 13.79 12.80 14.08 19.18 15.23 16.55 16.52 14.22 12.07 16.64 17.34 20.22 23.17 29.91 36.58 Fruits & Vegetables 0.93 1.11 2.10 1.85 2.09 2.13 2.68 2.70 3.25 2.98 3.67 3.29 3.48 2.97 3.22 Sugar 57. 3 53. 0 35. 5 00. 2 74. 1 02. 1 93. 1 91. 0 63. 0 07. 222 Flower 30.20 41.27 46.33 47.12 Live Animals 9.93 4.22 8.58 7.98 6.23 8.00 7.03 43.05 6.80 5.24 5.22 7.19 7.40 9.42 14.70 Chat 42.31 47.17 39.66 45.54 45.87 39.45 42.80 44.65 81.54 40.99 44.70 34.74 36.04 44.67 57.01 Gold (Birr/gr) 103,315.06 49,287.07 63,099.01 72,228.69 93,670.66 85,698.86 112,997.71 154,842.87 195,766.75 212,346.80 Petroleum Products 0.60 0.54 0.70 0.49 Bee's Wax 21.69 24.22 29.25 10.57 28.35 25.58 23.31 21.07 21.91 19.12 25.06 37.48 38.79 71.40 77.17 Annex 8: Unit Value of Export Items (Birr/Kg) Sources: Ethiopian Customs Authority Annex 9 Value of Major Imports (in Thousands of Birr) Perio d Food & Liv e A nim als B e verage s Tobacc o Petroleum Crud e Petroleum Prod. C hemicals Fertilizer s M e dical & Pharm. Pro d Soap & Polis h Rubber Prod. Paper & Paper M a nfc. 1979/80 72,251 1,161 10,745 244,973 94,411 113,242 81,458 68,816 14,318 35,221 22,762 1980/81 88,901 2,470 15,860 287,469 57,853 85,478 3,963 40,901 18,941 38,531 33,352 1981/82 135,53 4 1,446 21,853 329,322 32,131 89,453 16,211 48,163 26,521 44,430 24,946 1982/83 174,476 1,663 17,017 360,41 4 36,578 136,636 28,969 38,918 24,246 35,719 16,886 1983/8 4 168,465 6,449 13,382 325,649 52,739 107,212 26,272 51,615 15,666 38,976 26,071 1984/85 345,020 1,805 12,827 281,751 36,17 4 76,716 36,103 41,980 6,17 4 41,477 11,762 1985/86 530,599 4,962 2,835 220,261 32,273 87,935 44,685 58,513 6,683 45,569 34,94 4 1986/87 320,380 6,157 6,261 163,341 62,483 115,166 29,929 68,638 10,572 60,018 23,909 1987/88 246,45 4 7,858 11,788 181,842 34,728 110,729 72,521 50,280 10,80 4 51,106 29,796 1988/89 29 4 652 21 877 560 175 339 37 512 142 131 69 846 58 440 9 079 46 798 28 09 4 1988/89 29 4,652 21,877 560 175,339 37,512 142,131 69 84 , 6 58,440 9,079 46 79 , 8 28,09 4 1989/90 106,320 25,972 6,432 188,581 36,500 124,181 71,893 64,550 19,37 4 33,342 39,840 1990/91 263,350 16,163 3,56 4 185,376 25,050 85,072 79,548 36,305 26,013 41,867 27,775 1991/92 14,402 6,291 1,105 92,246 100,907 42,580 150 48,29 4 14,433 35,740 11,760 1992/93 497,536 20,867 4,845 444,282 376,808 135,269 13,106 131,578 37,490 73,278 30,565 1993/9 4 574,09 4 8,581 20,271 406,531 331,036 228,155 89,678 187,200 58,522 156,585 61,251 1994/95 906,743 13,305 10,580 522,56 4 471,350 179,61 4 343,947 193,305 30,818 184,843 53,780 1995/96 575,263 21,210 7,241 445,953 485,912 161,265 330,578 165,785 64,023 279,453 81,700 1996/97 37,222 8,590 93 76,900 1,427,200 47,021 173,813 77,317 55,593 188,170 78,351 1997/98 72,853 35,583 18,402 166,469 2,099,046 99,001 51,22 4 142,163 81,408 274,938 169,841 1998/99 558,422 37,405 26,393 2,281 1,306,707 142,008 377,582 315,940 100,718 345,27 4 199,440 1999/00 766,560 34,647 27,129 31 2,012,189 140,912 336,379 246,179 92,105 273,429 163,92 4 2000/01 641,597 34,628 28,561 0 2,151,326 153,782 126,860 293,78 4 140,236 408,838 217,050 2001/02 1,365,581 35,886 48,550 0 2,202,55 4 145,066 560,257 358,99 4 128,513 340,956 269,68 4 2002/03 1,697,566 33,509 35,61 4 0 2,463,917 165,902 462,662 352,193 145,207 376,787 218,152 2003/0 4 1,981,297 36,937 37,348 0 2,608,285 201,668 923,523 636,32 4 173,378 417,410 329,915 2004/05 1,566,093 52,090 52,03 4 0 5,736,666 250,951 1,055,29 4 671,52 4 240,863 536,827 434,417 2005/06 2,139,779 45,715 77,860 0 7,422,807 348,26 4 1,180,768 1,212,655 337,445 730,113 517,37 4 2006/07 1,799,700 68,20 4 74,841 0 7,524,66 4 399,852 933,867 1,410,84 4 328,116 838,145 565,483 2007/08 2,499,13 4 97,080 115,642 0 15,076,123 488,539 2,828,101 1,848,363 377,282 1,030,557 770,591 2008/09 7,251,053 89,171 104,398 0 17,219,182 677,521 3,008,355 2,771,689 552,503 1,422,155 819,639 National Bank of Ethiopia Annual Report 2008/09 130

... Annex 9 continued Period Textiles Clothings Glass & Glass Ware Metal & Metal Manfc. Machinery & Aircraft Road Motor Vehicles Electrical Materials Grain* Telecomm . Appara. Others GRAND TOTAL 1979/80 57,367 6,832 5,559 104,162 202,231 135,789 44,976 40,179 13,346 103,238 1,432,858 1980/81 59,820 4,315 7,480 100,111 213,390 165,328 35,137 44,374 20,114 104,820 1,384,234 1981/82 71,538 6,077 3,464 76,848 227,599 259,372 43,613 76,919 29,186 153,954 1,641,661 1982/83 55,213 5,557 4,986 145,946 234,440 164,765 81,786 118,846 19,765 168,965 1,752,945 1983/84 58,643 3,810 6,563 162,901 519,770 210,621 97,873 114,595 23,204 149,124 2,065,005 1984/85 69,041 7,709 4,195 143,378 225,132 179,589 56,143 257,865 30,419 163,038 1,770,433 1985/86 79,186 3,476 3,690 166,878 274,699 287,134 76,691 382,447 45,754 194,498 2,201,265 1986/87 58,479 4,558 5,742 156,406 327,659 339,324 102,472 280,296 74,507 301,145 2,237,146 1987/88 69,510 2,673 4,563 174,624 465,211 369,944 81,220 177,566 88,323 210,677 2,274,651 1988/89 62,156 8,319 2,761 172,831 335,284 279,220 83,705 228,633 59,141 222,608 2,110,353 1989/90 55,404 2,742 6,937 212,696 304,650 189,288 101,802 72,882 49,759 183,856 1,824,119 1990/91 44,920 14,488 5,180 153,769 562,457 249,844 58,889 202,106 48,189 202,486 2,130,305 1991/92 73 571 14 705 3 517 49 487 189 544 177 203 42 756 1 019 32 882 859 324 1 810 897 1991/92 73 57 , 1 14,705 3 51 , 7 49,487 189,544 177,203 42 75 , 6 1,019 32,882 859,324 1,810,897 1992/93 130,409 15,514 9,035 172,058 699,420 402,403 97,670 418,157 47,669 278,915 3,618,718 1993/94 186,946 34,117 14,809 496,052 367,949 825,890 192,150 483,624 25,562 474,589 4,739,967 1994/95 229,950 54,033 24,368 563,219 710,882 1,015,951 286,193 586,760 20,677 730,150 6,546,272 1995/96 308,065 76,391 32,944 709,985 854,155 1,393,422 328,577 506,124 51,400 1,334,922 7,708,246 1996/97 414,162 69,542 40,789 973,897 1,414,978 1,117,480 636,728 8,328 17,108 1,837,538 8,692,494 1997/98 396,757 114,866 41,452 969,100 1,099,417 795,978 776,492 18,160 14,950 1,918,519 9,338,459 1998/99 473,804 230,897 69,704 1,416,817 1,375,843 1,390,946 1,032,004 340,647 42,305 2,257,512 11,702,002 1999/00 433,134 279,885 58,403 919,528 1,351,512 1,548,459 938,299 646,316 32,656 1,783,302 11,438,661 2000/01 461,188 345,433 88,056 1,188,971 1,480,393 1,456,285 782,018 461,335 66,419 2,248,531 12,313,956 2001/02 471,499 467,110 72,787 1,359,231 1,667,774 1,435,245 893,039 1,246,119 101,456 3,364,964 15,289,146 2002/03 599,604 478,039 78,075 1,311,504 1,963,002 1,817,630 1,059,754 1,580,973 111,634 2,696,596 16,067,348 2003/04 606,295 601,949 104,362 2,012,945 2,397,183 2,124,501 2,447,540 1,573,618 502,494 4,152,333 22,295,690 2004/05 774,285 836,015 125,294 3,476,768 4,553,244 2,811,972 3,062,726 1,334,778 344,108 4,853,003 31,434,174 2005/06 1,065,381 1,291,287 145,048 4,157,675 5,305,516 4,183,804 2,978,793 1,621,232 365,874 6,366,919 39,873,075 2006/07 808,907 1,523,051 163,834 4,460,322 7,036,854 6,062,546 2,968,701 1,323,878 329,270 7,829,238 45,126,438 2007/08 986,145 1,198,037 243,667 7,051,109 7,118,469 4,279,547 4,404,967 1,902,765 243,818 12,489,774 63,146,946 2008/09 1,023,983 1,124,962 235,344 7,990,303 8,713,241 4,859,888 5,866,530 6,285,857 51,369 20,895,905 84,677,193

• Included in "Food & Live Animals". Source:Ethiopian Customs Authority. National Bank of Ethiopia Annual Report 2008/09 131

... Anne x 9 continued P eri o d Textil e s Clothing s Glass & Glass Ware M etal & M etal M a nfc. Mac hinery & Aircraft R o a d M otor Vehicle s Electrical Material s Grain* T elecom m . Appara. Ot her s G RAND T O T A L 1979/80 57,367 6,832 5,559 104,162 202,231 135,789 44,976 40,179 13,346 103,238 1,432,858 1980/81 59,820 4,315 7,480 100,111 213,390 165,328 35,137 44,37 4 20,11 4 104,820 1,384,23 4 1981/82 71,538 6,077 3,46 4 76,848 227,599 259,372 43,613 76,919 29,186 153,95 4 1,641,661 1982/83 55,213 5,557 4,986 145,946 234,440 164,765 81,786 118,846 19,765 168,965 1,752,945 1983/8 4 58,643 3,810 6,563 162,901 519,770 210,621 97,873 114,595 23,20 4 149,12 4 2,065,005 1984/85 69,041 7,709 4,195 143,378 225,132 179,589 56,143 257,865 30,419 163,038 1,770,433 1985/86 79,186 3,476 3,690 166,878 274,699 287,13 4 76,691 382,447 45,75 4 194,498 2,201,265 1986/87 58,479 4,558 5,742 156,406 327,659 339,32 4 102,472 280,296 74,507 301,145 2,237,146 1987/88 69,510 2,673 4,563 174,62 4 465,211 369,94 4 81,220 177,566 88,323 210,677 2,274,651 1988/89 62,156 8,319 2,761 172,831 335,28 4 279,220 83,705 228,633 59,141 222,608 2,110,353 1989/90 55,40 4 2,742 6,937 212,696 304,650 189,288 101,802 72,882 49,759 183,856 1,824,119 1990/91 44,920 14,488 5,180 153,769 562,457 249,84 4 58,889 202,106 48,189 202,486 2,130,305 1991/92 73 571 14 705 3 517 49 487 189 54 4 177 203 42 756 1 019 32 882 859 32 4 1 810 897 1991/92 73 57 , 1 14,705 3 51 , 7 49,487 189,54 4 177,203 42 75 , 6 1,019 32,882 859,32 4 1,810,897 1992/93 130,409 15,51 4 9,035 172,058 699,420 402,403 97,670 418,157 47,669 278,915 3,618,718 1993/9 4 186,946 34,117 14,809 496,052 367,949 825,890 192,150 483,62 4 25,562 474,589 4,739,967 1994/95 229,950 54,033 24,368 563,219 710,882 1,015,951 286,193 586,760 20,677 730,150 6,546,272 1995/96 308,065 76,391 32,94 4 709,985 854,155 1,393,422 328,577 506,12 4 51,400 1,334,922 7,708,246 1996/97 414,162 69,542 40,789 973,897 1,414,978 1,117,480 636,728 8,328 17,108 1,837,538 8,692,49 4 1997/98 396,757 114,866 41,452 969,100 1,099,417 795,978 776,492 18,160 14,950 1,918,519 9,338,459 1998/99 473,80 4 230,897 69,70 4 1,416,817 1,375,843 1,390,946 1,032,00 4 340,647 42,305 2,257,512 11,702,002 1999/00 433,13 4 279,885 58,403 919,528 1,351,512 1,548,459 938,299 646,316 32,656 1,783,302 11,438,661 2000/01 461,188 345,433 88,056 1,188,971 1,480,393 1,456,285 782,018 461,335 66,419 2,248,531 12,313,956 2001/02 471,499 467,110 72,787 1,359,231 1,667,77 4 1,435,245 893,039 1,246,119 101,456 3,364,96 4 15,289,146 2002/03 599,60 4 478,039 78,075 1,311,50 4 1,963,002 1,817,630 1,059,75 4 1,580,973 111,63 4 2,696,596 16,067,348 2003/0 4 606,295 601,949 104,362 2,012,945 2,397,183 2,124,501 2,447,540 1,573,618 502,49 4 4,152,333 22,295,690 2004/05 774,285 836,015 125,29 4 3,476,768 4,553,24 4 2,811,972 3,062,726 1,334,778 344,108 4,853,003 31,434,17 4 2005/06 1,065,381 1,291,287 145,048 4,157,675 5,305,516 4,183,80 4 2,978,793 1,621,232 365,87 4 6,366,919 39,873,075 2006/07 808,907 1,523,051 163,83 4 4,460,322 7,036,85 4 6,062,546 2,968,701 1,323,878 329,270 7,829,238 45,126,438 2007/08 986,145 1,198,037 243,667 7,051,109 7,118,469 4,279,547 4,404,967 1,902,765 243,818 12,489,77 4 63,146,946 2008/09 1,023,983 1,124,962 235,34 4 7,990,303 8,713,241 4,859,888 5,866,530 6,285,857 51,369 20,895,905 84,677,193

• Included in "Food & Live Ani mals". Source:Ethiopian Custo ms Authority. Annex 10 Volume of Major Imports (In Metric Tons) Perio d Food & Liv e Anim als Be v erage s Tobacc o Petroleum Crud e Petroleum Prod. Che micals F ertilizers M e dical & Ph arm. Pro d So a p & P olish Rubber Prod. 1979/80 128,453 389 896 671,245 94,652 33,264 125,845 1,580 9,753 6,871 1980/81 124,219 478 1,443 690,482 56,602 34,286 6,845 2,849 11,764 6,724 1981/82 178,264 661 1,033 713,236 18,409 3,572 29,393 2,887 17,283 8,567 1982/83 259,465 393 1,032 778,898 20,796 40,440 41,651 1,796 15,253 7,712 1983/84 289,533 1,035 1,104 785,158 55,168 47,274 36,078 2,829 8,378 9,170 1984/85 601,897 429 886 718,827 19,615 38,060 72,828 2,736 4,240 8,899 1985/86 846,775 1,077 117 727,531 16,176 43,618 108,079 3,925 5,314 15,244 1986/87 599,912 1,074 604 813,554 20,463 45,782 39,217 4,326 17,705 11,330 1987/88 565,624 920 2,389 73,226 19,007 41,520 152,777 3,784 13,093 10,325 1988/89 551,147 507 19 769,438 20,510 39,050 112,897 5,888 5,438 9,157 , , , , , , , , 1989/90 128,060 2,058 1,167 776,307 34,604 46,591 131,988 5,352 16,685 5,725 1990/91 401,515 1,720 780 494,081 12,724 27,984 91,966 11,647 19,185 6,484 1991/92 12,828 388 76 302,583 146,439 8,782 125 1,946 14,713 4,367 1992/93 440,582 611 256 740,043 332,905 22,857 10,308 2,587 20,774 6,889 1993/94 411,188 312 1,146 688,344 276,576 34,666 100,566 2,760 18,366 8,047 1994/95 622,469 479 696 674,313 471,184 22,459 218,133 4,038 9,498 10,009 1995/96 322,279 1,590 490 417,100 333,632 33,877 115,377 2,110 17,645 14,375 1996/97 13,069 1,176 233 34,924 914,285 15,796 101,305 3,663 30,290 23,098 1997/98 30,835 1,667 351 159,816 1,857,647 16,770 36,226 2,168 18,149 14,799 1998/99 225,026 3,170 693 3,007 1,064,451 121,440 175,442 6,260 23,958 15,148 1999/00 391,279 2,618 933 0 1,094,883 34,237 233,848 3,126 18,317 53,467 2000/01 420,439 1,747 1,006 0 950,044 30,294 79,525 2,820 28,860 22,399 2001/02 738,092 1,079 1,784 0 944,922 18,908 302,409 4,137 25,649 17,583 2002/03 645,142 1,253 724 0 1,460,960 19,578 252,259 3,503 27,847 18,396 2003/04 691,589 1,433 738 0 1,033,738 23,115 382,673 8,119 33,670 21,254 2004/05 576,638 1,806 920 0 1,823,336 29,232 352,065 4,581 42,353 26,637 2005/06 819,012 1,307 2,045 0 1,229,078 46,715 396,795 6,994 59,404 72,212 2006/07 597,408 2,223 1,566 0 1,454,122 42,223 272,803 7,011 49,042 31,256 2007/08 506,953 2,609 2,749 0 1,619,430 47,666 479,486 7,960 43,335 32,450 2008/09 1,834,399 2,024 1,768 0 1,404,122 53,303 528,635 11,797 51,938 37,306 National Bank of Ethiopia Annual Report 2008/09 132

... Annex 10, Continued Period Paper & Paper Manfc. Textiles Clothings Glass & Glass Ware Metal & Metal Manfc. Machinery & Aircraft R oad M otor Vehicles Electrical Materials Grain* Telecomm. Appara. 1979/80 12,246 18,044 366 3,500 57,045 21,934 14,287 5,391 106,331 372 1980/81 13,719 14,799 135 4,250 55,122 16,115 14,667 4,514 64,044 666 1981/82 12,935 22,466 270 1,191 38,674 19,094 19,497 4,625 154,477 541 1982/83 7,262 19,467 111 3,589 84,345 10,851 24,867 7,961 241,059 321 1983/84 13,761 25,754 126 6,979 81,360 22,894 23,201 13,146 264,712 741 1984/85 21,815 313,855 257 2,630 84,583 21,164 18,115 6,771 537,737 531 1985/86 19,406 20,797 143 2,428 72,348 33,926 31,983 9,367 704,059 466 1986/87 11,517 14,672 66 2,302 81,054 25,108 29,853 20,273 551,880 2,724 1987/88 13,186 20,299 145 1,876 77,731 24,219 48,171 10,759 448,158 1,128 1988/89 11,359 36,867 299 970 77,324 13,937 16,867 8,136 423,204 2,191 1989/90 13,865 10,332 90 2,822 82,229 15,469 11,490 12,983 118,560 1,547 1990/91 9,906 6,126 299 2,475 45,954 11,887 21,224 6,017 374,114 1,399 1991/92 3 924 7 854 424 472 17 175 2 951 15 188 3 685 1 948 449 1991/92 3,924 7,854 424 472 17,175 2,951 15,188 3,685 1,948 449 1992/93 7,781 17,578 318 2,447 43,721 7,249 32,394 6,632 421,497 7,225 1993/94 10,062 12,710 1,073 2,111 113,446 8,543 32,362 9,449 382,633 310 1994/95 6,265 17,505 1,582 2,040 116,919 28,712 32,498 83,302 590,328 82 1995/96 7,835 16,501 4,808 5,879 119,762 42,305 41,188 12,488 313,282 96 1996/97 22,807 42,305 7,501 6,328 194,750 24,358 38,937 46,951 4,019 131 1997/98 20,313 26,681 4,685 6,171 163,617 24,115 20,482 20,525 22,928 105 1998/99 160,612 39,073 6,887 10,194 217,971 28,591 73,864 36,831 219,044 470 1999/00 413,422 71,002 10,178 10,486 198,762 28,818 80,219 21,370 360,118 1,232 2000/01 100,302 20,680 20,562 15,254 261,843 26,964 91,784 24,421 360,318 20,588 2001/02 32,216 26,630 19,361 11,900 273,465 23,962 47,917 25,206 693,515 330 2002/03 35,926 33,900 18,225 13,799 256,990 29,572 34,348 29,329 621,000 716 2003/04 46,048 40,619 30,837 20,093 293,701 38,653 41,689 54,920 628,812 3,327 2004/05 53,791 90,527 27,150 22,346 539,108 53,642 47,555 58,571 535,237 89,893 2005/06 66,236 53,927 36,104 27,558 578,957 77,916 1,130,445 83,658 715,902 6,065 2006/07 67,729 38,935 33,618 29,547 795,736 101,881 114,151 64,490 507,199 6,162 2007/08 78,420 41,135 30,474 38,345 732,819 103,880 73,546 64,581 433,009 4,251 2008/09 90,504 36,349 24,278 33,469 641,508 108,047 84,280 87,896 1,731,465 1,795

• Included in "Food & Live Animals". Source: Ethiopian Customs Authority. National Bank of Ethiopia Annual Report 2008/09 133

... Annex 10, Continued Period Paper & Paper Manfc. Textiles Clothings Glass & Glass Ware Metal & Metal Manfc. Machinery & Aircraft R oad M otor Vehicles Electrical Materials Grain* Telecomm. Appara. 1979/80 12,246 18,044 366 3,500 57,045 21,934 14,287 5,391 106,331 372 1980/81 13,719 14,799 135 4,250 55,122 16,115 14,667 4,514 64,044 666 1981/82 12,935 22,466 270 1,191 38,674 19,094 19,497 4,625 154,477 541 1982/83 7,262 19,467 111 3,589 84,345 10,851 24,867 7,961 241,059 321 1983/84 13,761 25,754 126 6,979 81,360 22,894 23,201 13,146 264,712 741 1984/85 21,815 313,855 257 2,630 84,583 21,164 18,115 6,771 537,737 531 1985/86 19,406 20,797 143 2,428 72,348 33,926 31,983 9,367 704,059 466 1986/87 11,517 14,672 66 2,302 81,054 25,108 29,853 20,273 551,880 2,724 1987/88 13,186 20,299 145 1,876 77,731 24,219 48,171 10,759 448,158 1,128 1988/89 11,359 36,867 299 970 77,324 13,937 16,867 8,136 423,204 2,191 1989/90 13,865 10,332 90 2,822 82,229 15,469 11,490 12,983 118,560 1,547 1990/91 9,906 6,126 299 2,475 45,954 11,887 21,224 6,017 374,114 1,399 1991/92 3 924 7 854 424 472 17 175 2 951 15 188 3 685 1 948 449 1991/92 3,924 7,854 424 472 17,175 2,951 15,188 3,685 1,948 449 1992/93 7,781 17,578 318 2,447 43,721 7,249 32,394 6,632 421,497 7,225 1993/94 10,062 12,710 1,073 2,111 113,446 8,543 32,362 9,449 382,633 310 1994/95 6,265 17,505 1,582 2,040 116,919 28,712 32,498 83,302 590,328 82 1995/96 7,835 16,501 4,808 5,879 119,762 42,305 41,188 12,488 313,282 96 1996/97 22,807 42,305 7,501 6,328 194,750 24,358 38,937 46,951 4,019 131 1997/98 20,313 26,681 4,685 6,171 163,617 24,115 20,482 20,525 22,928 105 1998/99 160,612 39,073 6,887 10,194 217,971 28,591 73,864 36,831 219,044 470 1999/00 413,422 71,002 10,178 10,486 198,762 28,818 80,219 21,370 360,118 1,232 2000/01 100,302 20,680 20,562 15,254 261,843 26,964 91,784 24,421 360,318 20,588 2001/02 32,216 26,630 19,361 11,900 273,465 23,962 47,917 25,206 693,515 330 2002/03 35,926 33,900 18,225 13,799 256,990 29,572 34,348 29,329 621,000 716 2003/04 46,048 40,619 30,837 20,093 293,701 38,653 41,689 54,920 628,812 3,327 2004/05 53,791 90,527 27,150 22,346 539,108 53,642 47,555 58,571 535,237 89,893 2005/06 66,236 53,927 36,104 27,558 578,957 77,916 1,130,445 83,658 715,902 6,065 2006/07 67,729 38,935 33,618 29,547 795,736 101,881 114,151 64,490 507,199 6,162 2007/08 78,420 41,135 30,474 38,345 732,819 103,880 73,546 64,581 433,009 4,251 2008/09 90,504 36,349 24,278 33,469 641,508 108,047 84,280 87,896 1,731,465 1,795

• Included in "Food & Live Animals". Source: Ethiopian Customs Authority. ANNEX 11: Value of Imports by End Use 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 (1975) (1976) (1977) (1978) (1979) (1980) (1981) (1982) (1983) (1984) (1985) (1986) RAW MATERIALS 60 73 50 83 49 54 55 59 57 28 71 86 SEMI-FINISHED GOODS 252 242 241 258 268 328 357 322 237 159 327 772 Chemicals 84 84 57 80 101 93 125 105 64 26 122 192 Fertilizers 29 20 36 44 30 72 77 72 29 89 13 90 Textile Materials 16 20 15 10 12 17 13 16 13 18 38 68 Others 124 119 134 124 126 146 142 129 130 26 154 422 FUEL 397 379 318 253 226 217 213 225 210 249 821 726 Crude Petroleum 360 326 282 224 163 182 169 189 185 106 485 407 Petroleum Products 37 53 36 28 58 35 38 36 25 143 330 319 Others 0 4 0 6 0 0 1 5 0 CAPITAL GOODS 577 930 515 742 958 1,072 823 707 964 468 1,266 1,386 Transport 168 424 188 300 371 474 355 149 453 337 842 637 Tyres for Heavy Vehicle 16 16 23 61 37 48 22 13 24 17 23 113 Heavy Road Motor Vehicle 139 169 135 197 285 271 214 125 141 86 299 511 Aircraft 9 232 26 33 44 149 111 4 283 233 515 7 Others 4 9 4 9 5 7 8 7 5 0 5 5 Agricultural 36 17 43 75 37 57 14 18 15 2 9 34 Industrial 373 489 285 367 549 540 454 541 496 129 414 715 CONSUMER GOODS 463 434 645 870 730 599 649 515 643 539 1,133 1,665 Consumer Durables 136 112 134 138 172 195 200 220 212 137 262 463 Radio & Television 20 12 17 13 28 19 17 22 14 9 21 35 Tyres, Cars & Other Veh. 8 9 8 4 8 9 8 11 6 6 40 50 Cars & Other Vehicles 53 39 5 61 53 79 79 65 107 91 100 193 Others 56 52 104 60 84 89 97 122 85 32 101 184 Consumer Non- Durables 327 322 512 732 557 404 449 295 430 401 871 1,202 Cereals 124 117 266 403 290 182 210 76 209 193 427 519 Other Food 76 76 136 205 111 102 118 75 104 78 148 215 Medical & Pharmaceutical 39 52 42 59 69 50 60 64 36 34 132 190 Textile Fabrics 31 19 25 26 33 23 25 16 27 71 73 116 Others 58 59 42 40 55 48 36 64 53 25 90 162 MISCELLANEOUS 3 9 2 5 7 6 15 4 19 367 2 106 TOTAL IMPORT S 1,753 2,066 1,770 2,211 2,237 2,275 2,110 1,832 2,130 1,811 3,619 4,740 (In Millions of Birr) 94/95 95/96 96/97 97/98 98/99 99/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) RAW MATERIALS 131 180 174 191 204 161 199 254 187 224 425 671 1,311 2,385 3,645 SEMI-FINISHED GOODS 1,113 1,262 1,630 1,527 1,966 1,669 1,970 2,462 2,357 3,751 5,751 7,133 7,059 11,682 11,994 Chemicals 216 285 268 248 349 351 419 358 351 412 572 998 871 1,063 1,218 Fertilizers 260 164 179 51 377 336 127 560 462 919 1,055 1,180 1,246 2,828 3,008 Textile Materials 109 119 157 135 121 94 110 67 100 118 204 332 117 253 198 Others 528 695 1,026 1,092 1,119 888 1,313 1,477 1,443 2,302 3,920 4,622 4,825 7,539 7,569 FUEL 993 935 1,569 2,283 1,330 2,037 2,181 2,287 2,468 2,677 5,786 7,473 7,688 15,076 17,563 Crude Petroleum 523 177 77 166 2 1 0 0 #REF! #REF! 0 Petroleum Products 471 487 1,427 2,114 1,290 2,028 2,174 2,281 2,464 2,674 5,774 7,438 7,664 12,457 17,464 Others 0 271 64 2 38 8 7 5 4 3 12 34 24 54 99 CAPITAL GOODS 2,086 2,595 3,303 2,781 3,945 3,831 3,705 4,102 4,715 7,556 10,376 12,614 16,453 16,416 24,595 Transport 877 1,243 1,380 670 1,160 1,141 1,278 1,195 1,493 2,571 3,215 3,733 5,574 3,519 4,000 Tyres for Heavy Vehicle 123 160 233 187 222 189 233 207 246 304 473 424 479 576 849 Heavy Road Motor Vehicle 742 1,065 789 479 886 940 936 885 1,092 1,167 1,509 2,712 4,291 2,744 3,010 Aircraft 9 11 354 2 17 4 105 97 148 1,087 1,207 586 333 113 32 Others 2 7 4 3 35 9 5 6 7 13 25 10 471 86 109 Agricultural 127 77 85 67 112 85 67 59 51 93 211 336 290 379 331 Industrial 1,082 1,275 1,838 2,043 2,674 2,605 2,359 2,847 3,171 4,891 6,951 8,545 10,589 12,518 20,264 CONSUMER GOODS 2,125 2,300 1,754 1,839 3,288 3,469 3,898 5,015 5,615 7,720 8,532 11,128 11,590 14,037 23,533 Consumer Durables 568 720 828 785 1,151 1,101 1,269 1,308 1,575 2,539 2,918 3,609 4,578 4,244 5,885 Radio & Television 61 76 34 0 74 126 176 198 220 636 509 491 494 322 134 Tyres, Cars & Other Veh. 26 47 56 34 39 25 49 39 57 64 110 131 169 210 284 Cars & Other Vehicles 239 305 292 293 403 522 480 509 572 841 1,024 1,232 1,531 1,284 1,644 Others 243 292 446 458 635 428 564 562 727 998 1,275 1,755 2,383 2,428 3,823 Consumer Non- Durables 1,557 1,719 926 1,055 2,138 2,368 2,629 3,707 4,040 5,180 5,613 7,519 7,012 9,793 17,648 Cereals 854 554 15 54 493 698 648 1,325 1,624 1,777 1,383 1,693 1,414 1,937 6,474 Other Food 222 96 93 137 261 250 267 455 365 542 755 1,194 862 1,436 2,014 Medical & Pharmaceutical 207 166 157 157 361 278 369 421 419 788 739 1,286 1,510 1,959 2,949 Textile Fabrics 126 698 305 360 573 590 674 817 961 1,198 1,415 1,776 1,680 1,920 2,010 Others 149 216 357 347 450 552 671 688 672 875 1,321 1,570 1,545 2,540 4,201 MISCELLANEOUS 98 144 82 717 969 272 362 365 587 369 565 855 1,025 3,551 3,348 TOTAL IMPORTS 6,546 7,417 8,511 9,338 11,702 11,438 12,314 14,485 15,930 22,296 31,434 39,873 45,126 63,147 84,677 ...Annex 11. continued Source: Ethiopian Customs Authority. National Bank of Ethiopia Annual Report 2008/09 134

94/95 95/96 96/97 97/98 98/99 99/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) RAW MATERIALS 131 180 174 191 204 161 199 254 187 224 425 671 1,311 2,385 3,645 SEMI-FINISHED GOODS 1,113 1,262 1,630 1,527 1,966 1,669 1,970 2,462 2,357 3,751 5,751 7,133 7,059 11,682 11,994 Chemicals 216 285 268 248 349 351 419 358 351 412 572 998 871 1,063 1,218 Fertilizers 260 164 179 51 377 336 127 560 462 919 1,055 1,180 1,246 2,828 3,008 Textile Materials 109 119 157 135 121 94 110 67 100 118 204 332 117 253 198 Others 528 695 1,026 1,092 1,119 888 1,313 1,477 1,443 2,302 3,920 4,622 4,825 7,539 7,569 FUEL 993 935 1,569 2,283 1,330 2,037 2,181 2,287 2,468 2,677 5,786 7,473 7,688 15,076 17,563 Crude Petroleum 523 177 77 166 2 1 0 0 #REF! #REF! 0 Petroleum Products 471 487 1,427 2,114 1,290 2,028 2,174 2,281 2,464 2,674 5,774 7,438 7,664 12,457 17,464 Others 0 271 64 2 38 8 7 5 4 3 12 34 24 54 99 CAPITAL GOODS 2,086 2,595 3,303 2,781 3,945 3,831 3,705 4,102 4,715 7,556 10,376 12,614 16,453 16,416 24,595 Transport 877 1,243 1,380 670 1,160 1,141 1,278 1,195 1,493 2,571 3,215 3,733 5,574 3,519 4,000 Tyres for Heavy Vehicle 123 160 233 187 222 189 233 207 246 304 473 424 479 576 849 Heavy Road Motor Vehicle 742 1,065 789 479 886 940 936 885 1,092 1,167 1,509 2,712 4,291 2,744 3,010 Aircraft 9 11 354 2 17 4 105 97 148 1,087 1,207 586 333 113 32 Others 2 7 4 3 35 9 5 6 7 13 25 10 471 86 109 Agricultural 127 77 85 67 112 85 67 59 51 93 211 336 290 379 331 Industrial 1,082 1,275 1,838 2,043 2,674 2,605 2,359 2,847 3,171 4,891 6,951 8,545 10,589 12,518 20,264 CONSUMER GOODS 2,125 2,300 1,754 1,839 3,288 3,469 3,898 5,015 5,615 7,720 8,532 11,128 11,590 14,037 23,533 Consumer Durables 568 720 828 785 1,151 1,101 1,269 1,308 1,575 2,539 2,918 3,609 4,578 4,244 5,885 Radio & Television 61 76 34 0 74 126 176 198 220 636 509 491 494 322 134 Tyres, Cars & Other Veh. 26 47 56 34 39 25 49 39 57 64 110 131 169 210 284 Cars & Other Vehicles 239 305 292 293 403 522 480 509 572 841 1,024 1,232 1,531 1,284 1,644 Others 243 292 446 458 635 428 564 562 727 998 1,275 1,755 2,383 2,428 3,823 Consumer Non- Durables 1,557 1,719 926 1,055 2,138 2,368 2,629 3,707 4,040 5,180 5,613 7,519 7,012 9,793 17,648 Cereals 854 554 15 54 493 698 648 1,325 1,624 1,777 1,383 1,693 1,414 1,937 6,474 Other Food 222 96 93 137 261 250 267 455 365 542 755 1,194 862 1,436 2,014 Medical & Pharmaceutical 207 166 157 157 361 278 369 421 419 788 739 1,286 1,510 1,959 2,949 Textile Fabrics 126 698 305 360 573 590 674 817 961 1,198 1,415 1,776 1,680 1,920 2,010 Others 149 216 357 347 450 552 671 688 672 875 1,321 1,570 1,545 2,540 4,201 MISCELLANEOUS 98 144 82 717 969 272 362 365 587 369 565 855 1,025 3,551 3,348 TOTAL IMPORTS 6,546 7,417 8,511 9,338 11,702 11,438 12,314 14,485 15,930 22,296 31,434 39,873 45,126 63,147 84,677 ...Annex 11. continued Source: Ethiopian Customs Authority. National Bank of Ethiopia Annual Report 2008/09 135

94/95 95/96 96/97 97/98 98/99 99/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1987) (1988) (1989) (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) RAW MATERIALS 131 180 174 191 204 161 199 254 187 224 425 671 1,311 2,385 3,645 SEMI-FINISHED GOODS 1,113 1,262 1,630 1,527 1,966 1,669 1,970 2,462 2,357 3,751 5,751 7,133 7,059 11,682 11,994 Chemicals 216 285 268 248 349 351 419 358 351 412 572 998 871 1,063 1,218 Fertilizers 260 164 179 51 377 336 127 560 462 919 1,055 1,180 1,246 2,828 3,008 Textile Materials 109 119 157 135 121 94 110 67 100 118 204 332 117 253 198 Others 528 695 1,026 1,092 1,119 888 1,313 1,477 1,443 2,302 3,920 4,622 4,825 7,539 7,569 FUEL 993 935 1,569 2,283 1,330 2,037 2,181 2,287 2,468 2,677 5,786 7,473 7,688 15,076 17,563 Crude Petroleum 523 177 77 166 2 1 0 0 #REF! #REF! 0 Petroleum Products 471 487 1,427 2,114 1,290 2,028 2,174 2,281 2,464 2,674 5,774 7,438 7,664 12,457 17,464 Others 0 271 64 2 38 8 7 5 4 3 12 34 24 54 99 CAPITAL GOODS 2,086 2,595 3,303 2,781 3,945 3,831 3,705 4,102 4,715 7,556 10,376 12,614 16,453 16,416 24,595 Transport 877 1,243 1,380 670 1,160 1,141 1,278 1,195 1,493 2,571 3,215 3,733 5,574 3,519 4,000 Tyres for Heavy Vehicle 123 160 233 187 222 189 233 207 246 304 473 424 479 576 849 Heavy Road Motor Vehicle 742 1,065 789 479 886 940 936 885 1,092 1,167 1,509 2,712 4,291 2,744 3,010 Aircraft 9 11 354 2 17 4 105 97 148 1,087 1,207 586 333 113 32 Others 2 7 4 3 35 9 5 6 7 13 25 10 471 86 109 Agricultural 127 77 85 67 112 85 67 59 51 93 211 336 290 379 331 Industrial 1,082 1,275 1,838 2,043 2,674 2,605 2,359 2,847 3,171 4,891 6,951 8,545 10,589 12,518 20,264 CONSUMER GOODS 2,125 2,300 1,754 1,839 3,288 3,469 3,898 5,015 5,615 7,720 8,532 11,128 11,590 14,037 23,533 Consumer Durables 568 720 828 785 1,151 1,101 1,269 1,308 1,575 2,539 2,918 3,609 4,578 4,244 5,885 Radio & Television 61 76 34 0 74 126 176 198 220 636 509 491 494 322 134 Tyres, Cars & Other Veh. 26 47 56 34 39 25 49 39 57 64 110 131 169 210 284 Cars & Other Vehicles 239 305 292 293 403 522 480 509 572 841 1,024 1,232 1,531 1,284 1,644 Others 243 292 446 458 635 428 564 562 727 998 1,275 1,755 2,383 2,428 3,823 Consumer Non- Durables 1,557 1,719 926 1,055 2,138 2,368 2,629 3,707 4,040 5,180 5,613 7,519 7,012 9,793 17,648 Cereals 854 554 15 54 493 698 648 1,325 1,624 1,777 1,383 1,693 1,414 1,937 6,474 Other Food 222 96 93 137 261 250 267 455 365 542 755 1,194 862 1,436 2,014 Medical & Pharmaceutical 207 166 157 157 361 278 369 421 419 788 739 1,286 1,510 1,959 2,949 Textile Fabrics 126 698 305 360 573 590 674 817 961 1,198 1,415 1,776 1,680 1,920 2,010 Others 149 216 357 347 450 552 671 688 672 875 1,321 1,570 1,545 2,540 4,201 MISCELLANEOUS 98 144 82 717 969 272 362 365 587 369 565 855 1,025 3,551 3,348 TOTAL IMPORTS 6,546 7,417 8,511 9,338 11,702 11,438 12,314 14,485 15,930 22,296 31,434 39,873 45,126 63,147 84,677 ...Annex 11. continued Source: Ethiopian Customs Authority. Annex 12: Value of Imports by Country of Origin 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 013, 851 597, 222 735, 042 176, 441 127, 67 640, 63 599, 12 921, 51 137, 12 001, 12 915, 4 188, 4 it uobij D 884, 902 251, 951 167, 141 323, 201 159, 13 765, 34 841, 34 976, 82 916, 42 561, 61 691, 21 860, 6 ayneK 338, 3 126, 2 917, 11 297, 2 271 92 17 04 132 371 137 78 naduS 341, 482 095, 23 825, 92 491, 6 648, 2 305, 3 458, 5 368, 1 76 535, 4 818, 4 066, 1 R. A. U France 56,459 51,837 35,477 41,509 36,165 51,622 61,940 21,700 44,512 119,804 168,244 119,261 Germany 221,689 269,872 284,104 263,634 234,841 203,936 223,560 84,502 345,521 435,591 625,859 559,801 Italy 168,792 213,338 432,079 382,297 331,183 300,044 265,407 82,842 233,323 547,800 729,889 932,775 Netherlands 49,921 53,263 47,651 83,644 112,122 51,298 62,566 29,495 144,401 221,583 221,084 175,400 432, 863 053, 913 509, 722 094, 661 409, 67 553, 331 150, 431 257, 891 769, 851 482, 471 855, 151 033, 161 . K. U Russia 324,862 354,097 290,466 236,384 274,235 247,541 179,307 1,163 6,600 2,673 14,298 16,630 Yugoslavia 24,889 41,470 25,200 16,580 12,182 17,970 17,365 446 2,023 353 362 603 U.S.A. 167,732 374,047 221,315 266,501 216,804 93,413 316,538 124,270 228,106 484,225 850,332 685,754 China, P. Rep. 6,762 7,179 11,353 20,059 6,360 15,901 10,894 6,099 26,387 82,561 127,145 186,506 Japan 149,172 151,964 173,699 196,678 144,087 109,659 152,326 92,995 103,540 269,265 397,320 597,860 Saudi Arabia 14,884 23,221 34,080 30,299 15,072 34,778 74,841 107,357 749,060 631,784 987,535 886,554 Rest of the World 411,245 496,847 465,265 531,463 482,866 492,878 549,091 1,071,437 820,711 1,293,222 1,687,699 2,523,095 Total Import 1 770 , ,433 2,210 957 , 2 236 , ,946 2,274,663 2 110 , ,380 1,824,159 2,130,335 1,810,900 3,126 654 , 4 740 , 310 , 6 546 , ,275 7,708,247 … Annex 12: Continued 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Djibouti 171,752 227,739 288,720 167,656 360,275 386,640 570,584 490,147 468,910 726,236 489,067 248 745 Kenya 195,746 127,630 133,442 170,174 120,659 137,755 161,019 187,260 220,729 323,436 433,896 310,421 271,334 904, 568 987, 613, 1 244, 044 892, 522 026, 334 760, 18 911, 3 898, 21 853 755 073, 11 984, 5 214, 4 naduS 612, 095, 4 880, 581, 6 851, 663, 2 587, 155, 2 637, 209, 1 100, 694, 1 663, 490, 1 048, 821 309, 741 962, 545 191, 425 448, 413 705, 18 R. A. U France 137,171 147,520 292,663 439,170 385,892 367,581 224,132 527,871 654,753 776,264 805,939 830,261 1,274,036 Germany 720,448 696,447 678,863 636,077 632,430 765,598 690,602 836,194 1,043,711 1,497,594 1,656,840 2,074,085 1,769,858 Italy 734,334 703,306 905,526 897,030 999,897 1,286,927 1,091,273 1,132,998 1,334,427 2,198,689 3,474,463 3,255,577 4,828,243 Netherlands 516,921 144,345 203,782 273,116 264,212 326,961 423,628 533,744 461,105 620,995 619,844 400,232 696,441 908, 927 730, 798 647, 677 791, 378 201, 568 289, 667 024, 717 886, 385 222, 784 848, 615 047, 145 135, 834 991, 824 . K. U 690, 189, 1 163, 569 961, 434 500, 682 842, 373 554, 812 139, 512 257, 05 226, 921 026, 16 249, 92 707, 84 180, 7 ai ssu R Yugoslavia 3,677 657 1,191 2,949 30,470 3,604 1,305 7 5,427 1,154 8,468 256 0 U.S.A. 440,370 177,516 547,567 742,838 657,940 1,391,542 959,433 2,619,019 3,317,965 3,181,562 1,698,913 2,756,286 3,510,082 China, P. Rep. 288,875 304,410 454,881 615,028 917,790 1,215,721 1,480,535 2,302,695 3,622,994 5,007,634 7,494,616 9,861,833 12,929,079 Japan 703,881 589,382 590,828 788,235 651,134 512,631 1,043,226 1,013,957 1,052,279 1,281,164 2,788,275 3,067,246 3,217,408 Saudi Arabia 513,727 2,138,690 1,160,455 226,078 518,779 1,970,021 1,307,811 1,876,410 5,348,311 7,335,352 6,829,549 8,320,018 12,778,050 Rest of the World 3,557,099 3,273,247 5,336,841 7,033,238 6,663,118 5,344,129 5,945,091 8,214,884 10,329,057 12,983,984 14,809,054 22,906,209 35,235,387 Total Import 8,505,200 9,338,459 11,702,004 13,115,882 12,967,700 14,485,289 15,929,478 22,297,690 31,434,374 39,870,350 45,126,438 63,146,946 84,677,193 Source: Ethiopian Customs Authority National Bank of Ethiopia Annual Report 2008/09 136

ANNEX 13: Value of Exports by Country of Destination* 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 (1978) (1979) (1980) (1981) (1982) (1983) (1984) (1985) (1986) (1987) (1988) (1989) Djibouti 34,894 61,188 52,013 30,803 65,185 53,400 8,241 71,949 149,110 192,764 254,387 263,627 835, 87 504 755 2 86 867 908, 1 182, 3 846, 1 832, 1 203, 1 395 ayneK 0 0 522, 7 639, 92 234, 1 2 5 656 160, 3 178 721 766, 5 naduS 228, 11 376, 91 785, 92 1 2 3 488, 1 R. A. U France 33,150 32,175 24,886 43,894 18,547 25,726 20,542 33,709 36,098 165,043 90,681 127,131 Germany 284,044 209,307 185,811 209,395 138,487 114,830 49,886 141,225 258,479 873,905 854,536 927,494 065, 742 179, 612 890, 512 290, 011 355, 36 701, 32 407, 03 024, 46 842, 85 191, 55 869, 06 919, 17 yl atI Netherlands 80,261 27,119 21,353 79,792 10,178 17,629 5,271 19,763 20,416 56,118 38,725 40,153 018, 201 055, 18 230, 001 446, 64 914, 34 428, 81 306, 85 658, 02 493, 31 200, 51 128, 42 488, 61 . K. U Russia 39,916 72,983 48,167 57,789 77,718 2,164 189 96 208 129 17 47 711 914, 1 756, 6 56 438 515, 1 76 665, 2 565 ai val soguY U.S.A. 118,622 142,708 107,506 111,972 89,624 27,995 13,519 86,937 97,802 171,372 142,759 390,281 565 079 052, 3 682 38 001 760, 1 371, 2 812, 1 551, 2 . pe R. P, ani h C 236, 863 630, 923 144, 763 348, 091 100, 951 962, 87 937, 79 658, 69 812, 98 320, 201 772, 66 796, 97 napaJ Saudi Arabia 46,543 27,961 57,265 52,848 75,517 38,815 39,954 115,977 110,605 16,758 237,815 270,136 Rest of the World 107,054 64,132 100,108 151,170 73,969 26,962 20,289 91,320 388,797 525,818 269,808 909,917 Total Export 923,848 794,852 773,674 903,235 736,809 498,282 279,026 828,534 1,439,319 2,731,754 2,538,752 3,738,829 ...Annex 13. continued 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Djibouti 551,639 394,046 405,400 620,078 272,132 289,825 533,834 359,202 498,349 434,264 485,403 463,894 813, 431 451 047, 51 073, 8 252 101, 3 ayneK 2,360 17,923 21,123 32,806 28,805 31,735 206, 817 868, 805 160, 754 422, 912 185, 641 014, 97 831, 77 219 939, 5 063, 3 003 530, 1 naduS 655, 106 238, 515 038, 372 161, 152 243, 032 995, 67 285, 46 725, 02 018, 91 313, 14 117, 03 966, 83 R. A. U France 147,791 150,623 138,268 95,135 111,290 273,552 97,961 127,221 177,958 212,074 231,308 171,181 Germany 910,880 647,721 711,612 396,380 437,938 352,919 560,332 1,068,688 875,993 1,230,053 1,403,462 1,389,204 561, 816 942, 866 079, 266 698, 374 297, 483 310, 703 661, 381 058, 193 076, 223 227, 042 731, 642 144, 743 yl atI Netherlands 79,722 50,810 76,020 48,216 55,202 141,980 79,413 259,359 334,933 497,756 849,033 1,279,583 098, 326 355, 413 382, 592 460, 832 376, 912 969, 281 237, 67 418, 931 158, 411 437, 68 554, 09 879, 701 . K. U 872, 14 043, 64 138, 03 693, 41 319, 71 015, 9 134 364 048, 1 398 0 825 ai ssu R Yugoslavia 0 281 0 287 874 U.S.A. 317,127 145,122 176,132 124,552 165,892 340,060 254,650 389,938 418,041 522,777 915,718 626,461 China, P.Rep. 18,202 8,074 6,852 14,700 90,968 22,525 109,600 363,121 1,166,677 526,539 583,046 1,966,171 Japan 350,432 563,695 428,979 380,859 294,612 188,440 554,408 554,687 676,177 640,340 861,305 67,358 Saudi Arabia 275,150 418,329 353,376 295,068 229,476 182,350 293,609 438,190 531,000 645,957 1,000,488 1,167,946 Rest of the World 991,887 891,071 1,279,769 1,410,768 1,652,809 1,814,340 2,034,976 2,753,627 2,788,385 3,995,074 5,218,877 5,450,022 Total Export 4,141,582 3,637,346 3,957,802 3,866,606 3,864,320 4,142,357 5,176,644 7,331,258 8,685,376 10,457,615 13,631,575 15,217,920

• Export value of Gold is not included in this table for the years before 2003/04 Sources: Ethiopian Customs Authority ( In Thousand of Birr) National Bank of Ethiopia Annual Report 2008/09 137

ANNEX 13: Value of Exports by Country of Destination* 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 (1978) (1979) (1980) (1981) (1982) (1983) (1984) (1985) (1986) (1987) (1988) (1989) Djibouti 34,894 61,188 52,013 30,803 65,185 53,400 8,241 71,949 149,110 192,764 254,387 263,627 835, 87 504 755 2 86 867 908, 1 182, 3 846, 1 832, 1 203, 1 395 ayneK 0 0 522, 7 639, 92 234, 1 2 5 656 160, 3 178 721 766, 5 naduS 228, 11 376, 91 785, 92 1 2 3 488, 1 R. A. U France 33,150 32,175 24,886 43,894 18,547 25,726 20,542 33,709 36,098 165,043 90,681 127,131 Germany 284,044 209,307 185,811 209,395 138,487 114,830 49,886 141,225 258,479 873,905 854,536 927,494 065, 742 179, 612 890, 512 290, 011 355, 36 701, 32 407, 03 024, 46 842, 85 191, 55 869, 06 919, 17 yl atI Netherlands 80,261 27,119 21,353 79,792 10,178 17,629 5,271 19,763 20,416 56,118 38,725 40,153 018, 201 055, 18 230, 001 446, 64 914, 34 428, 81 306, 85 658, 02 493, 31 200, 51 128, 42 488, 61 . K. U Russia 39,916 72,983 48,167 57,789 77,718 2,164 189 96 208 129 17 47 711 914, 1 756, 6 56 438 515, 1 76 665, 2 565 ai val soguY U.S.A. 118,622 142,708 107,506 111,972 89,624 27,995 13,519 86,937 97,802 171,372 142,759 390,281 565 079 052, 3 682 38 001 760, 1 371, 2 812, 1 551, 2 . pe R. P, ani h C 236, 863 630, 923 144, 763 348, 091 100, 951 962, 87 937, 79 658, 69 812, 98 320, 201 772, 66 796, 97 napaJ Saudi Arabia 46,543 27,961 57,265 52,848 75,517 38,815 39,954 115,977 110,605 16,758 237,815 270,136 Rest of the World 107,054 64,132 100,108 151,170 73,969 26,962 20,289 91,320 388,797 525,818 269,808 909,917 Total Export 923,848 794,852 773,674 903,235 736,809 498,282 279,026 828,534 1,439,319 2,731,754 2,538,752 3,738,829 ...Annex 13. continued 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 (1990) (1991) (1992) (1993) (1994) (1995) (1996) (1997) (1998) (1999) (2000) (2001) Djibouti 551,639 394,046 405,400 620,078 272,132 289,825 533,834 359,202 498,349 434,264 485,403 463,894 813, 431 451 047, 51 073, 8 252 101, 3 ayneK 2,360 17,923 21,123 32,806 28,805 31,735 206, 817 868, 805 160, 754 422, 912 185, 641 014, 97 831, 77 219 939, 5 063, 3 003 530, 1 naduS 655, 106 238, 515 038, 372 161, 152 243, 032 995, 67 285, 46 725, 02 018, 91 313, 14 117, 03 966, 83 R. A. U France 147,791 150,623 138,268 95,135 111,290 273,552 97,961 127,221 177,958 212,074 231,308 171,181 Germany 910,880 647,721 711,612 396,380 437,938 352,919 560,332 1,068,688 875,993 1,230,053 1,403,462 1,389,204 561, 816 942, 866 079, 266 698, 374 297, 483 310, 703 661, 381 058, 193 076, 223 227, 042 731, 642 144, 743 yl atI Netherlands 79,722 50,810 76,020 48,216 55,202 141,980 79,413 259,359 334,933 497,756 849,033 1,279,583 098, 326 355, 413 382, 592 460, 832 376, 912 969, 281 237, 67 418, 931 158, 411 437, 68 554, 09 879, 701 . K. U 872, 14 043, 64 138, 03 693, 41 319, 71 015, 9 134 364 048, 1 398 0 825 ai ssu R Yugoslavia 0 281 0 287 874 U.S.A. 317,127 145,122 176,132 124,552 165,892 340,060 254,650 389,938 418,041 522,777 915,718 626,461 China, P.Rep. 18,202 8,074 6,852 14,700 90,968 22,525 109,600 363,121 1,166,677 526,539 583,046 1,966,171 Japan 350,432 563,695 428,979 380,859 294,612 188,440 554,408 554,687 676,177 640,340 861,305 67,358 Saudi Arabia 275,150 418,329 353,376 295,068 229,476 182,350 293,609 438,190 531,000 645,957 1,000,488 1,167,946 Rest of the World 991,887 891,071 1,279,769 1,410,768 1,652,809 1,814,340 2,034,976 2,753,627 2,788,385 3,995,074 5,218,877 5,450,022 Total Export 4,141,582 3,637,346 3,957,802 3,866,606 3,864,320 4,142,357 5,176,644 7,331,258 8,685,376 10,457,615 13,631,575 15,217,920

• Export value of Gold is not included in this table for the years before 2003/04 Sources: Ethiopian Customs Authority ( In Thousand of Birr) ANNEX 14 Trade Balance with Major Trading Partners ( In Thousands of Birr) 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 Trading Country (1977) (1978) (1979) (1980) (1981) (1982) (1983) (1984) (1985) (1986) (1987) (1988) (1989) Djibouti 34,894 30,375 40,088 30,282 15,674 43,190 17,354 -68,480 -72,722 -91,427 -30,031 96,077 91,875 Kenya -4,567 -11,603 -14,863 -23,381 -27,031 -39,867 -41,758 -31,183 -102,255 -141,759 -158,595 -209,083 -117,208 Sudan 17,493 4,936 -46 640 3,021 585 -24 -170 -1,360 18,217 4,604 -3,833 -4,412 U.A.R -633 -2,934 #REF! #REF! -1,860 #REF! #REF! #REF! -6,192 -29,527 -3,003 -264,470 -69,685 France -41,040 -18,687 -3,302 -16,623 7,729 -33,075 -36,214 -1,158 -10,803 -83,706 -3,201 -28,580 -10,040 Germany -56,511 14,172 -74,797 -77,823 -25,446 -65,449 -108,730 -34,616 -204,296 -177,112 248,046 294,735 207,046 Italy -111,335 -141,419 -371,111 -327,106 -272,935 -235,624 -234,703 -59,735 -169,770 -437,708 -514,791 -715,804 -486,774 Netherlands 389 26,998 -20,532 -62,291 -32,330 -41,120 -44,937 -24,224 -124,638 -201,167 -164,966 -136,675 -476,768 U.K. -143,827 -134,674 -149,463 -143,965 -185,358 -113,195 -74,752 -58,080 -123,071 -181,261 -219,318 -286,684 -325,389 Russia -319,062 -314,181 -217,483 -188,217 -216,446 -169,823 -177,143 -974 -6,504 -2,465 -14,169 -16,613 -7,034 Yugoslavia -22,578 -40,905 -22,634 -16,513 #REF! -16,455 -16,531 -381 #REF! #REF! 6,295 816 -3,560 U.S.A. -48,004 -255,425 -78,607 -158,995 -104,832 -3,789 -288,543 -110,751 -141,169 -386,423 -678,960 -542,995 -50,090 China, P.Rep. -3,726 -5,024 -10,135 -17,886 #REF! #REF! -9,827 -5,999 -26,304 -82,275 -123,895 -185,536 -288,310 Japan -76,410 -72,267 -107,422 -94,655 -54,869 -12,803 -54,587 -14,726 55,461 -78,422 -29,879 -268,824 -335,249 Saudi Arabia 24,861 23,322 -6,119 26,966 37,776 40,739 -36,026 -67,403 -633,083 -521,179 -970,777 -648,739 -243,591 Rest of the World -275,805 -389,793 -401,133 -431,355 -331,696 -418,909 -522,129 -1,051,148 -729,391 -904,425 -1,161,881 -2,253,287 -2,647,182 OverallTrade Balance -1,025,861 -1,287,109 #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! -3,814,521 -5,169,495 -4,766,371 ….Annex 14 continued 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Trading Country (1990) (1991) (1992) (1993) (1994) (1995) '(1996) '(1997) '(1998) '(1999) '(2000) '(2001) Djibouti 323,900 105,326 237,744 259,803 -114,509 -280,759 43,687 -109,708 -227,887 -54,803 485,156 463,149 Kenya -124,529 -133,190 -161,804 -104,920 -137,601 -26,701 -184,900 -202,806 -302,313 -401,090 -281,616 -239,599 Sudan -4,454 -11,070 2,803 5,581 -11,986 74,019 -1,657 -287,040 -6,074 16,618 -807,921 -146,807 U.A.R -276,175 -493,480 -503,955 -128,093 -108,313 -1,029,785 -1,419,403 -1,672,394 -2,300,625 -2,092,328 -5,669,255 -3,988,660 France 271 -142,041 -300,902 -290,757 -256,291 49,420 -429,910 -527,531 -598,306 -593,865 -598,953 -1,102,855 Germany 214,433 -31,142 75,535 -236,050 -327,660 -337,684 -275,862 24,977 -621,601 -426,787 -670,623 -380,654 Italy -355,865 -659,389 -656,308 -677,227 -895,077 -908,107 -825,985 -949,635 -1,724,793 -2,811,493 -2,587,327 -4,210,077 Netherlands -64,623 -152,973 -197,096 -215,996 -271,760 -281,649 -454,331 -201,746 -286,062 -122,087 448,800 583,142 U.K. -330,553 -451,284 -430,113 -372,371 -443,875 -640,688 -584,013 -645,430 -635,133 -481,463 -582,485 -105,919 Russia -48,179 -29,942 -60,726 -127,781 -50,289 -215,500 -208,945 -355,335 -271,609 -403,338 -919,020 -1,939,817 Yugoslavia -657 -1,191 -2,949 -30,470 -3,322 -1,305 -7 -5,427 -1,154 -8,468 31 874 U.S.A. 139,611 -402,446 -566,705 -533,387 -1,225,650 -619,373 -2,364,369 -2,928,027 -2,763,521 -1,176,136 -1,840,567 -2,883,621 China, P.Rep. -286,208 -446,807 -608,176 -903,090 -1,124,753 -1,458,010 -2,193,095 -3,259,872 -3,840,957 -6,968,077 -9,278,787 -10,962,908 Japan -238,950 -27,133 -359,256 -270,275 -218,018 -854,787 -459,549 -497,592 -604,987 -2,147,934 -2,205,940 -3,150,049 Saudi Arabia -1,863,540 -742,126 127,298 -223,711 -1,740,545 -1,125,461 -1,582,801 -4,910,121 -6,804,352 -6,183,591 -7,319,529 -11,610,105 Rest of the World -2,281,360 -4,445,770 -5,753,468 -5,252,350 -3,691,320 -4,130,751 -6,179,908 -7,575,429 -10,195,599 -10,813,980 -17,687,333 -29,785,365 OverallTrade Balance -5,196,877 -8,064,658 -9,158,080 -9,101,094 -10,620,969 -11,787,121 -17,121,046 -24,103,117 -31,184,974 -34,668,823 -49,515,371 -69,459,273 Sources: Ethiopian Customs Authority National Bank of Ethiopia Annual Report 2008/09 138

Annex 15 (In Millions of Birr) End of Currency Net Money Quasi- Broad period outside Demand Supply Money Money Banks Deposit 1 2 3=1+2 4 5=3+4 1979/80 1,062.8 435.8 1,498.6 610.2 2,108.8 1980/81 1,027.1 688.2 1,715.3 662.3 2,377.6 1981/82 1,129.8 762.4 1,892.2 751.5 2,643.7 1982/83 1,258.2 922.2 2,180.4 860.1 3,040.5 1983/84 1,282.9 1,096.4 2,379.3 1,004.4 3,383.7 1984/85 1,358.5 1,333.6 2,692.1 1,156.9 3,849.0 1985/86 1,591.9 1,587.7 3,179.6 1,268.6 4,448.2 1986/87 1,743.5 1,820.0 3,563.5 1,245.2 4,808.7 1987/88 1,908.3 2,002.5 3,910.8 1,327.9 5,238.7 1988/89 2,181.8 1,992.0 4,173.8 1,530.6 5,704.4 1989/90 2,736.3 2,253.7 4,990.0 1,718.2 6,708.2 1990/91 3,820.8 2,314.0 6,134.8 1,827.4 7,962.2 1991/92 4,315.8 2,529.5 6,845.3 2,165.6 9,010.9 1992/93 4,883.2 2,697.5 7,580.7 2,556.0 10,136.7 1993/94 5,158.9 3,214.3 8,373.2 3,225.5 11,598.7 1994/95 5,833.8 4,088.6 9,922.4 4,486.0 14,408.4 1995/96 5,656.9 4,260.5 9,917.4 5,737.5 15,654.9 1996/97 5,176.3 4,847.7 10,024.0 6,524.8 16,548.8 1997/98 4,716.8 6,377.2 11,094.0 7,549.3 18,643.3 1998/99 5,196.4 6,182.5 11,378.9 8,020.5 19,399.4 1999/00 5,914.3 7,136.0 13,050.3 9,127.5 22,177.8 2000/01 5,911.8 7,834.0 13,745.8 10,770.4 24,516.2 2001/02 5,461.9 8,690.6 14,152.5 12,139.5 26,292.1 2002/03 6,582.0 8,834.8 15,416.8 13,643.4 29,060.2 2003/04 7,843.9 10,192.1 18,036.0 15,590.0 33,626.0 2004/05 10,026.0 11,265.1 21,291.1 18,920.7 40,211.7 2005/06 11,422.9 12,389.0 23,811.9 22,565.5 46,377.4 2006/07 13,708.4 15,909.3 29,617.7 27,034.2 56,651.9 2007/08 17,654.1 17,696.3 35,350.4 32,831.8 68,182.1 2008/09 19,715.0 22,397.6 42,112.7 40,397.1 82,509.8 Source: National Bank of Ethiopia COMPONENTS OF BROAD MONEY National Bank of Ethiopia Annual Report 2008/09 139

Annex 15 (In Millions of Birr) End of Currency Net Money Quasi- Broad period outside Demand Supply Money Money Banks Deposit 1 2 3=1+2 4 5=3+4 1979/80 1,062.8 435.8 1,498.6 610.2 2,108.8 1980/81 1,027.1 688.2 1,715.3 662.3 2,377.6 1981/82 1,129.8 762.4 1,892.2 751.5 2,643.7 1982/83 1,258.2 922.2 2,180.4 860.1 3,040.5 1983/84 1,282.9 1,096.4 2,379.3 1,004.4 3,383.7 1984/85 1,358.5 1,333.6 2,692.1 1,156.9 3,849.0 1985/86 1,591.9 1,587.7 3,179.6 1,268.6 4,448.2 1986/87 1,743.5 1,820.0 3,563.5 1,245.2 4,808.7 1987/88 1,908.3 2,002.5 3,910.8 1,327.9 5,238.7 1988/89 2,181.8 1,992.0 4,173.8 1,530.6 5,704.4 1989/90 2,736.3 2,253.7 4,990.0 1,718.2 6,708.2 1990/91 3,820.8 2,314.0 6,134.8 1,827.4 7,962.2 1991/92 4,315.8 2,529.5 6,845.3 2,165.6 9,010.9 1992/93 4,883.2 2,697.5 7,580.7 2,556.0 10,136.7 1993/94 5,158.9 3,214.3 8,373.2 3,225.5 11,598.7 1994/95 5,833.8 4,088.6 9,922.4 4,486.0 14,408.4 1995/96 5,656.9 4,260.5 9,917.4 5,737.5 15,654.9 1996/97 5,176.3 4,847.7 10,024.0 6,524.8 16,548.8 1997/98 4,716.8 6,377.2 11,094.0 7,549.3 18,643.3 1998/99 5,196.4 6,182.5 11,378.9 8,020.5 19,399.4 1999/00 5,914.3 7,136.0 13,050.3 9,127.5 22,177.8 2000/01 5,911.8 7,834.0 13,745.8 10,770.4 24,516.2 2001/02 5,461.9 8,690.6 14,152.5 12,139.5 26,292.1 2002/03 6,582.0 8,834.8 15,416.8 13,643.4 29,060.2 2003/04 7,843.9 10,192.1 18,036.0 15,590.0 33,626.0 2004/05 10,026.0 11,265.1 21,291.1 18,920.7 40,211.7 2005/06 11,422.9 12,389.0 23,811.9 22,565.5 46,377.4 2006/07 13,708.4 15,909.3 29,617.7 27,034.2 56,651.9 2007/08 17,654.1 17,696.3 35,350.4 32,831.8 68,182.1 2008/09 19,715.0 22,397.6 42,112.7 40,397.1 82,509.8 Source: National Bank of Ethiopia COMPONENTS OF BROAD MONEY ANNEX 16 DOMESTIC CREDIT BY SECTOR (In Millions of Birr) Claims on Central Gov't Claims on Non-Central Gov't Gross End of Grand National Comm. Loans & Bills Invest￾Period Total Total Bank Banks Total Advances Disc. ments 1=2+5 2=3+4 3 4 5=6to8 6* 7 8 1979/80 2,638.3 1,176.6 915.0 261.6 1,461.7 1,444.1 0.4 17.2 1980/81 2,908.7 1,388.1 1,125.8 262.3 1,520.6 1,519.5 0.1 1.0 1981/82 3,125.2 1,394.6 1,066.0 328.6 1,730.6 1,729.4 - 1.2 1982/83 3,891.7 2,322.2 1,408.1 914.1 1,569.5 1,568.3 - 1.2 1983/84 4,356.7 2,558.3 1,642.1 916.2 1,798.4 1,797.2 - 1.2 1984/85 4,816.9 2,961.2 1,501.0 1,460.2 1,855.7 1,854.5 - 1.2 1985/86 5,375.6 3,314.1 1,862.9 1,451.2 2,061.5 2,060.3 - 1.2 1986/87 6,063.1 3,716.7 2,265.1 1,451.6 2,346.4 2,345.2 - 1.2 1987/88 6,798.1 4,007.8 2,510.1 1,497.7 2,790.3 2,789.1 - 1.2 1988/89 7,354.8 4,452.7 2,584.1 1,868.6 2,902.1 2,900.9 - 1.2 1989/90 8,598.4 5,670.9 3,431.6 2,239.3 2,927.5 2,926.3 - 1.2 1990/91 10,149.5 6,917.8 4,288.1 2,629.7 3,231.7 3,230.5 - 1.2 1991/92 11,479.5 8,062.8 5,433.1 2,629.7 3,416.7 3,415.5 - 1.2 1992/93 12,907.1 10,401.5 7,784.1 2,617.4 2,505.6 2,504.5 - 1.1 1993/94 14,573.3 11,400.2 8,783.1 2,617.1 3,173.1 3,168.0 - 5.1 1994/95 16,840.8 11,324.0 8,703.1 2,620.9 5,516.8 5,512.7 - 4.1 1995/96 19,384.0 11,575.7 8,725.4 2,850.3 7,808.3 7,802.9 - 5.4 1996/97 19,803.4 10,975.8 8,838.9 2,136.9 8,827.6 8,822.5 - 5.1 1997/98 22,050.8 12,032.4 9,819.3 2,213.1 10,018.4 10,015.4 - 3.0 1998/99 23,942.7 13,053.8 10,562.2 2,491.6 10,888.9 10,883.2 - 5.7 1999/00 31,283.7 19,423.4 16,533.1 2,890.3 11,860.3 11,854.6 - 5.7 2000/01 34,035.1 21,357.4 14,342.5 7,014.9 12,677.7 12,670.0 - 7.7 2001/02 28,099.0 15,985.1 8,986.7 6,998.4 12,113.9 12,084.8 - 29.0 2002/03 28,689.4 17,229.8 9,387.6 7,842.2 11,459.7 11,419.5 - 40.2 2003/04 31,653.0 19,199.2 9,389.2 9,809.9 12,453.8 12,247.8 - 206.0 2004/05 40,873.5 21,673.8 19,540.0 2,133.9 19,199.7 15,929.6 - 3,270.1 2005/06 49,295.9 25,266.4 19,095.7 6,170.6 24,029.6 19,431.1 - 4,598.4 2006/07 61,844.2 30,337.6 24,855.6 5,482.1 31,506.6 23,493.8 - 8,012.8 2007/08 79,969.2 33,075.7 35,405.8 (2,330.1) 46,893.5 33,600.6 - 13,292.9 2008/09 89,203.0 32,786.5 37,827.2 (5,040.7) 56,416.5 38,802.0 - 17,614.5

• Includes Claims on Other Financial Institutions Source: National Bank of Ethiopia National Bank of Ethiopia Annual Report 2008/09 140

ANNEX 17 Gross Gold and Foreign Exchange Holdings National Bank of Ethiopia Net Gold & International Reserves Foreign Liabilities Foreign Exchange CBs' End of Gross NBE Foreign Reserve Foreign Total Comm. Comm. Fiscal Year Total Total Gold Exchange Tranche Exchange Liab. Banks NBE Total NBE Banks 1=2+6 2=3to5 3 4 5 6 7=8+9 8 9 10=11+12 11=2-9 12=6-8 1979/80 525.6 323.0 50.5 272.5 - 202.6 159.3 49.1 110.2 366.3 212.8 153.5 1980/81 476.7 284.8 48.2 236.6 - 191.9 246.6 57.1 189.5 230.1 95.3 134.8 1981/82 754.6 541.7 44.0 497.7 - 212.9 424.1 106.7 317.4 330.5 224.3 106.2 1982/83 615.7 439.0 44.0 395.0 - 176.7 391.6 137.7 253.9 224.1 185.1 39.0 1983/84 446.4 224.1 44.0 180.1 - 222.3 310.1 107.1 203.0 136.3 21.1 115.2 1984/85 479.9 310.7 44.0 266.7 - 169.2 247.8 97.2 150.6 232.1 160.1 72.0 1985/86 838.5 620.9 44.0 576.9 - 217.6 259.3 83.5 175.8 579.2 445.1 134.1 1986/87 752.5 556.0 42.0 514.0 - 196.5 216.1 69.7 146.4 536.4 409.6 126.8 1987/88 594.2 388.8 194.8 194.0 - 205.4 291.9 107.1 184.8 302.3 204.0 98.3 1988/89 421.4 169.0 44.0 125.0 - 252.4 218.4 102.9 115.5 203.0 53.5 149.5 1989/90 190.2 41.8 23.1 18.7 - 148.4 143.7 71.5 72.2 46.5 -30.4 76.9 1990/91 446.9 177.7 31.3 146.4 - 269.2 158.6 118.4 40.2 288.3 137.5 150.8 1991/92 729.9 346.7 44.0 302.7 - 383.2 326.8 88.6 238.2 403.1 108.5 294.6 1992/93 2,316.3 1,342.9 57.0 1,236.6 49.3 973.4 1,449.1 266.9 1,182.2 867.2 160.7 706.5 1993/94 5,286.9 3,193.4 64.5 3,071.7 57.2 2,093.5 1,519.5 469.2 1,050.3 3,767.4 2,143.1 1,624.3 1994/95 7,399.6 3,895.6 71.1 3,755.9 68.6 3,504.0 1,690.3 799.6 890.7 5,709.3 3,004.9 2,704.4 1995/96 8,107.6 5,718.2 23.1 5,630.7 64.4 2,389.4 1,871.8 1,055.0 816.8 6,235.8 4,901.4 1,334.4 1996/97 8,237.9 3,968.7 2.5 3,899.2 67.0 4,269.2 2,612.3 1,514.1 1,098.2 5,625.6 2,870.5 2,755.1 1997/98 8,843.6 3,105.7 2.5 3,036.8 66.4 5,737.9 3,012.6 2,072.5 940.1 5,831.0 2,165.6 3,665.4 1998/99 8,839.9 3,588.8 2.8 3,508.9 77.1 5,251.1 2,752.1 1,685.1 1,067.0 6,087.8 2,521.8 3,566.0 1999/00 7,814.5 2,921.7 2.8 2,840.5 78.4 4,892.8 3,043.9 2,089.5 954.4 4,770.6 1,967.3 2,803.3 2000/01 7,829.5 2,907.8 2.9 2,829.6 75.3 4,921.7 3,029.5 1,815.4 1,214.1 4,800.0 1,693.7 3,106.3 2001/02 11,470.7 5,743.6 2.9 5,660.0 80.7 5,727.1 3,648.3 1,703.3 1,945.0 7,822.4 3,798.6 4,023.8 2002/03 14,427.2 7,988.2 2.9 7,899.3 86.0 6,439.0 3,378.1 1,674.7 1,703.4 11,049.1 6,284.8 4,764.3 2003/04 17,449.8 11,307.3 2.5 11,213.3 91.6 6,142.5 4,452.0 1,889.5 2,562.4 12,997.8 8,744.9 4,253.0 2004/05 19,963.5 13,704.9 57.0 13,556.5 91.3 6,258.6 6,095.5 1,979.8 4,115.7 13,868.0 9,589.2 4,278.8 2005/06 16,759.0 10,071.7 89.2 9,889.6 92.8 6,687.3 4,649.5 1,735.8 2,913.6 12,109.6 7,158.0 4,951.5 2006/07 19,514.9 11,977.3 429.3 11,448.5 99.5 7,537.7 6,174.6 1,986.3 4,188.3 13,340.4 7,789.0 5,551.4 2007/08 16,735.5 8,708.7 5.5 8,589.2 114.0 8,026.8 5,069.9 2,301.9 2,768.0 11,665.6 5,940.7 5,725.0 2008/09 26,434.3 17,214.6 18.2 17,069.0 127.5 9,219.7 8,457.5 5,380.9 3,076.5 17,976.8 11,833.7 6,143.1 Source: National Bank of Ethiopia (NBE) CB :Commercial Bank GOLD & FOREIGN EXCHANGE HOLDINGS OF THE NATIONAL BANK OF ETHIOPIA AND COMMERCIAL BANKS National Bank of Ethiopia Annual Report 2008/09 141

ANNEX 17 Gross Gold and Foreign Exchange Holdings National Bank of Ethiopia Net Gold & International Reserves Foreign Liabilities Foreign Exchange CBs' End of Gross NBE Foreign Reserve Foreign Total Comm. Comm. Fiscal Year Total Total Gold Exchange Tranche Exchange Liab. Banks NBE Total NBE Banks 1=2+6 2=3to5 3 4 5 6 7=8+9 8 9 10=11+12 11=2-9 12=6-8 1979/80 525.6 323.0 50.5 272.5 - 202.6 159.3 49.1 110.2 366.3 212.8 153.5 1980/81 476.7 284.8 48.2 236.6 - 191.9 246.6 57.1 189.5 230.1 95.3 134.8 1981/82 754.6 541.7 44.0 497.7 - 212.9 424.1 106.7 317.4 330.5 224.3 106.2 1982/83 615.7 439.0 44.0 395.0 - 176.7 391.6 137.7 253.9 224.1 185.1 39.0 1983/84 446.4 224.1 44.0 180.1 - 222.3 310.1 107.1 203.0 136.3 21.1 115.2 1984/85 479.9 310.7 44.0 266.7 - 169.2 247.8 97.2 150.6 232.1 160.1 72.0 1985/86 838.5 620.9 44.0 576.9 - 217.6 259.3 83.5 175.8 579.2 445.1 134.1 1986/87 752.5 556.0 42.0 514.0 - 196.5 216.1 69.7 146.4 536.4 409.6 126.8 1987/88 594.2 388.8 194.8 194.0 - 205.4 291.9 107.1 184.8 302.3 204.0 98.3 1988/89 421.4 169.0 44.0 125.0 - 252.4 218.4 102.9 115.5 203.0 53.5 149.5 1989/90 190.2 41.8 23.1 18.7 - 148.4 143.7 71.5 72.2 46.5 -30.4 76.9 1990/91 446.9 177.7 31.3 146.4 - 269.2 158.6 118.4 40.2 288.3 137.5 150.8 1991/92 729.9 346.7 44.0 302.7 - 383.2 326.8 88.6 238.2 403.1 108.5 294.6 1992/93 2,316.3 1,342.9 57.0 1,236.6 49.3 973.4 1,449.1 266.9 1,182.2 867.2 160.7 706.5 1993/94 5,286.9 3,193.4 64.5 3,071.7 57.2 2,093.5 1,519.5 469.2 1,050.3 3,767.4 2,143.1 1,624.3 1994/95 7,399.6 3,895.6 71.1 3,755.9 68.6 3,504.0 1,690.3 799.6 890.7 5,709.3 3,004.9 2,704.4 1995/96 8,107.6 5,718.2 23.1 5,630.7 64.4 2,389.4 1,871.8 1,055.0 816.8 6,235.8 4,901.4 1,334.4 1996/97 8,237.9 3,968.7 2.5 3,899.2 67.0 4,269.2 2,612.3 1,514.1 1,098.2 5,625.6 2,870.5 2,755.1 1997/98 8,843.6 3,105.7 2.5 3,036.8 66.4 5,737.9 3,012.6 2,072.5 940.1 5,831.0 2,165.6 3,665.4 1998/99 8,839.9 3,588.8 2.8 3,508.9 77.1 5,251.1 2,752.1 1,685.1 1,067.0 6,087.8 2,521.8 3,566.0 1999/00 7,814.5 2,921.7 2.8 2,840.5 78.4 4,892.8 3,043.9 2,089.5 954.4 4,770.6 1,967.3 2,803.3 2000/01 7,829.5 2,907.8 2.9 2,829.6 75.3 4,921.7 3,029.5 1,815.4 1,214.1 4,800.0 1,693.7 3,106.3 2001/02 11,470.7 5,743.6 2.9 5,660.0 80.7 5,727.1 3,648.3 1,703.3 1,945.0 7,822.4 3,798.6 4,023.8 2002/03 14,427.2 7,988.2 2.9 7,899.3 86.0 6,439.0 3,378.1 1,674.7 1,703.4 11,049.1 6,284.8 4,764.3 2003/04 17,449.8 11,307.3 2.5 11,213.3 91.6 6,142.5 4,452.0 1,889.5 2,562.4 12,997.8 8,744.9 4,253.0 2004/05 19,963.5 13,704.9 57.0 13,556.5 91.3 6,258.6 6,095.5 1,979.8 4,115.7 13,868.0 9,589.2 4,278.8 2005/06 16,759.0 10,071.7 89.2 9,889.6 92.8 6,687.3 4,649.5 1,735.8 2,913.6 12,109.6 7,158.0 4,951.5 2006/07 19,514.9 11,977.3 429.3 11,448.5 99.5 7,537.7 6,174.6 1,986.3 4,188.3 13,340.4 7,789.0 5,551.4 2007/08 16,735.5 8,708.7 5.5 8,589.2 114.0 8,026.8 5,069.9 2,301.9 2,768.0 11,665.6 5,940.7 5,725.0 2008/09 26,434.3 17,214.6 18.2 17,069.0 127.5 9,219.7 8,457.5 5,380.9 3,076.5 17,976.8 11,833.7 6,143.1 Source: National Bank of Ethiopia (NBE) CB :Commercial Bank GOLD & FOREIGN EXCHANGE HOLDINGS OF THE NATIONAL BANK OF ETHIOPIA AND COMMERCIAL BANKS ANNEX 18: TREASURY BILLS AUCTION RESULT S Annual Amount Bank Non-bank Total Bank Non-bank Total Bank Non-bank Total Weighted Offered Yield 1994/9 5 1580. 0 14. 0 24. 0 38. 0 1636. 0 648. 5 2284. 5 797. 4 598. 1 1395. 5 4.248 1995/9 6 4526. 0 22. 0 60. 0 82. 0 4552. 5 2117. 4 6669. 9 2623. 4 1902. 6 4526. 0 4.834 1996/9 7 8519. 0 38. 0 96. 0 134. 0 2460. 7 4278. 9 6739. 6 1456. 3 3233. 9 4690. 2 3.889 1997/9 8 5086. 0 98. 0 116. 0 214. 0 2386. 7 3705. 3 6092. 0 1521. 6 3033. 9 4555. 5 3.714 1998/9 9 13435. 5 88. 0 193. 0 282. 0 6231. 3 6986. 2 13217. 5 5261. 2 6333. 0 11594. 2 3.650 1999/0 0 16147. 0 110. 0 162. 0 272. 0 10772. 3 7550. 5 18322. 8 7954. 4 5356. 8 13311. 2 3.262 July 1600. 0 12. 0 15. 0 27. 0 1424. 8 821. 0 2245. 8 1247. 0 353. 0 1600. 0 3.22 5 August 1352. 0 5. 0 28. 0 33. 0 443. 0 1373. 8 1816. 8 420. 0 1070. 5 1490. 5 3.55 0 September 1000. 0 15. 0 14. 0 29. 0 540. 0 783. 7 1323. 7 295. 4 534. 0 829. 4 3.37 0 October 1795. 0 13. 0 13. 0 26. 0 1881. 5 440. 4 2321. 9 1477. 3 317. 7 1795. 0 3.28 7 November 1500. 0 12. 0 20. 0 32. 0 1563. 0 524. 7 2087. 7 1072. 3 427. 7 1500. 0 3.201 December 2200. 0 14. 0 16. 0 30. 0 1983. 0 1318.1 3301.1 1532. 9 667.1 2200. 0 3.19 5 January 1800. 0 6. 0 7. 0 13. 0 76. 0 203. 0 279. 0 76. 0 203. 0 279. 0 3.19 4 February 1300. 0 5. 0 12. 0 17. 0 86. 0 582. 7 668. 7 86. 0 582. 7 668. 7 3.28 3 March 1100. 0 6. 0 9. 0 15. 0 489. 0 447. 5 936. 5 224. 5 412. 5 637. 0 3.571 April 1000. 0 10. 0 9. 0 19. 0 1003. 0 249. 3 1252. 3 833. 3 166. 8 1000. 0 3.52 7 May 500. 0 6. 0 3. 0 9. 0 618. 0 124. 5 742. 5 380. 0 120. 0 500. 0 2.48 0 June 1000. 0 6. 0 16. 0 22. 0 665. 0 681. 8 1346. 8 309. 7 501. 8 811. 5 3.25 7 2000/0 1 12100. 0 133. 0 208. 0 346. 0 10361. 0 7844. 0 18205. 0 5087. 7 4235. 3 9322. 9 2.829 July 750. 0 11. 0 13. 0 24. 0 720. 0 330. 0 1050. 0 172. 0 277. 0 449. 0 3.251 August 500. 0 19. 0 28. 0 47. 0 1260. 0 890. 7 2150. 7 265. 7 34. 3 300. 0 2.56 4 September 450. 0 16. 0 29. 0 50. 0 837. 0 1143. 9 1980. 9 100. 0 300. 0 400. 0 1.90 8 October 350. 0 17. 0 22. 0 39. 0 870. 0 699. 5 1569. 5 147. 0 203. 0 350. 0 1.51 0 November 1000. 0 16. 0 23. 0 39. 0 1263. 0 828. 0 2091. 0 428. 0 572. 0 1000. 0 1.001 December 1100. 0 5. 0 11. 0 16. 0 237. 0 218. 0 455. 0 237. 0 218. 0 455. 0 2.02 6 January 1000. 0 6. 0 6. 0 12. 0 636. 0 74. 5 710. 5 530. 0 72. 5 602. 5 3.99 3 February 1200. 0 5. 0 12. 0 17. 0 412. 0 139. 2 551. 2 409. 0 114. 2 523. 2 4.03 8 March 1350. 0 8. 0 17. 0 25. 0 887. 0 962. 0 1849. 0 570. 0 780. 0 1350. 0 3.70 8 April 700. 0 8. 0 14. 0 22. 0 369. 0 599. 3 968. 3 176. 0 469. 3 645. 3 3.32 5 May 1900. 0 12. 0 18. 0 30. 0 1410. 0 1116. 0 2526. 0 948. 0 500. 0 1448. 0 3.44 6 June 1800. 0 10. 0 15. 0 25. 0 1460. 0 843. 0 2303. 0 1105. 0 695. 0 1800. 0 3.17 5 Number of Bidders Amount Demanded in millions of Birr Amount Sold in millions of Birr National Bank of Ethiopia Annual Report 2008/09 142

2001/0 2 16625. 0 152. 0 166. 0 326. 0 18632.6 6216. 0 26089.1 12176. 4 3996.8 16453. 2 1.982 July 1325.0 14.0 17.0 31.0 1540.0 290.2 1830.2 1209.8 115.2 1325.0 3.112 August 1000.0 15.0 20.0 35.0 1325.0 612.5 1937.5 437.5 562.5 1000.0 2.924 September 1200.0 10.0 15.0 25.0 1107.6 495.4 1603.0 813.6 414.4 1200.0 2.527 October 1900.0 16.0 16.0 32.0 2181.0 741.5 2922.5 1541.0 359.0 1900.0 2.538 November 1150.0 8.0 7.0 23.0 813.0 162.5 2216.0 840.0 2.0 1150.0 2.072 December 1100.0 8.0 25.0 33.0 1147.0 1311.0 2458.0 451.0 649.0 1100.0 1.711 January 1400.0 8.0 14.0 22.0 1348.0 533.2 1881.2 695.0 533.2 1228.2 1.538 February 1150.0 10.0 6.0 16.0 1276.0 67.5 1343.5 1092.5 57.5 1150.0 1.672 March 1400.0 12.0 8.0 20.0 1614.0 253.5 1867.5 1151.5 248.5 1400.0 1.614 April 1400.0 13.0 11.0 24.0 1798.0 654.0 2452.0 900.0 500.0 1400.0 1.496 May 2200.0 22.0 14.0 36.0 2759.0 344.5 3103.5 2007.5 192.5 2200.0 1.435 June 1400.0 16.0 13.0 29.0 1724.0 750.2 2474.2 1037.0 363.0 1400.0 1.146 2002/0 3 29818. 0 174. 0 122. 0 296. 0 33488. 0 5341.8 38829.8 26987.6 2830. 4 29818. 0 1.311 July 1350.0 19.0 9.0 28.0 1791.0 486.1 2277.1 1083.9 266.1 1350.0 1.243 August 1450.0 19.0 15.0 34.0 1970.0 399.7 2369.7 1334.3 115.7 1450.0 1.153 September 1700.0 20.0 7.0 27.0 2390.0 421.0 2811.0 1650.0 50.0 1700.0 1.073 October 2200.0 28.0 12.0 40.0 2829.0 645.7 3474.7 1905.0 295.0 2200.0 0.998 November 4518.0 14.0 14.0 28.0 4737.0 686.2 5423.2 4018.0 500.0 4518.0 1.225 December 1550.0 13.0 10.0 23.0 1711.0 757.5 2468.5 1300.0 250.0 1550.0 1.054 January 1550.0 9.0 7.0 16.0 1688.0 287.0 1975.0 1375.0 175.0 1550.0 0.885 February 4300.0 7.0 10.0 17.0 4321.0 422.7 4743.7 3924.3 375.7 4300.0 1.462 March 1750.0 12.0 14.0 26.0 2006.0 199.0 2205.0 1596.0 154.0 1750.0 1.752 April 2500.0 14.0 7.0 21.0 2691.0 371.0 3062.0 2169.0 331.0 2500.0 1.588 May 4750.0 10.0 8.0 18.0 4916.0 333.0 5249.0 4462.0 288.0 4750.0 1.824 June 2200.0 9.0 9.0 18.0 2438.0 333.0 2771.0 2170.0 30.0 2200.0 1.480 2003/0 4 51645. 0 152. 0 120. 0 272. 0 56481. 0 4960. 0 61441. 0 47921.8 3710. 2 51632. 0 1.023 July 2000.0 11.0 8.0 19.0 6882.0 6882.0 1780.0 220.0 2000.0 1.324 August 4900.0 14.0 9.0 23.0 4527.0 250.5 4777.5 4742.0 158.0 4900.0 1.765 September 3150.0 14.0 11.0 25.0 3029.0 466.0 3495.0 2859.3 290.7 3150.0 1.371 October 6000.0 15.0 18.0 33.0 2977.0 790.0 3767.0 5452.0 535.0 5987.0 1.484 November 2550.0 9.0 10.0 19.0 2831.0 446.0 3277.0 2365.0 185.0 2550.0 1.063 December 2600.0 10.0 10.0 20.0 4098.0 320.5 4418.5 2369.0 231.0 2600.0 0.862 January 5237.0 9.0 13.0 22.0 5497.0 305.0 5802.0 4931.5 305.5 5237.0 1.209 February 3400.0 11.0 9.0 20.0 3512.0 456.0 3968.0 2940.0 460.0 3400.0 0.747 March 6207.0 23.0 9.0 32.0 6351.0 636.0 6987.0 5577.0 630.0 6207.0 0.675 April 6478.0 12.0 3.0 15.0 6902.0 454.0 7356.0 6254.0 224.0 6478.0 0.647 May 4541.0 12.0 9.0 21.0 4920.0 462.0 5382.0 4240.0 301.0 4541.0 0.598 June 4582.0 12.0 11.0 23.0 4955.0 374.0 5329.0 4412.0 170.0 4582.0 0.534 2004/0 5 41262. 5 175. 0 94. 0 269. 0 49658. 5 7237.7 56896. 2 37783.9 3281.1 41065. 0 0.243 July 7219.0 40.0 8.0 48.0 8438.0 548.0 8986.0 7094.0 125.0 7219.0 0.818 August 4282.0 16.0 14.0 30.0 5656.0 551.0 6207.0 4027.0 255.0 4282.0 0.258 September 7939.0 20.0 7.0 27.0 9600.0 714.0 10314.0 7670.0 269.0 7939.0 0.228 October 4082.0 11.0 5.0 16.0 4798.0 567.0 5365.0 3875.0 207.0 4082.0 0.198 November 1000.0 12.0 7.0 19.0 1751.0 335.0 2086.0 900.0 100.0 1000.0 0.137 December 1000.0 7.0 8.0 15.0 789.0 621.5 1410.5 296.0 506.5 802.5 0.118 January 1000.0 11.0 10.0 21.0 1396.0 729.0 2125.0 829.5 170.5 1000.0 0.099 February 1000.0 9.0 5.0 14.0 1363.0 520.0 1883.0 800.0 200.0 1000.0 0.079 March 5808.5 20.0 11.0 31.0 6780.5 1302.0 8082.5 5010.4 798.1 5808.5 0.068 April 2812.5 12.0 6.0 18.0 3302.5 525.0 3827.5 2737.5 75.0 2812.5 0.050 May 3371.5 8.0 5.0 13.0 3651.5 425.0 4076.5 3146.5 225.0 3371.5 0.049 June 1748.0 9.0 8.0 17.0 2133.0 400.2 2533.2 1398.0 350.0 1748.0 0.048 … Annex 18 continued National Bank of Ethiopia Annual Report 2008/09 143

2001/0 2 16625. 0 152. 0 166. 0 326. 0 18632.6 6216. 0 26089.1 12176. 4 3996.8 16453. 2 1.982 July 1325.0 14.0 17.0 31.0 1540.0 290.2 1830.2 1209.8 115.2 1325.0 3.112 August 1000.0 15.0 20.0 35.0 1325.0 612.5 1937.5 437.5 562.5 1000.0 2.924 September 1200.0 10.0 15.0 25.0 1107.6 495.4 1603.0 813.6 414.4 1200.0 2.527 October 1900.0 16.0 16.0 32.0 2181.0 741.5 2922.5 1541.0 359.0 1900.0 2.538 November 1150.0 8.0 7.0 23.0 813.0 162.5 2216.0 840.0 2.0 1150.0 2.072 December 1100.0 8.0 25.0 33.0 1147.0 1311.0 2458.0 451.0 649.0 1100.0 1.711 January 1400.0 8.0 14.0 22.0 1348.0 533.2 1881.2 695.0 533.2 1228.2 1.538 February 1150.0 10.0 6.0 16.0 1276.0 67.5 1343.5 1092.5 57.5 1150.0 1.672 March 1400.0 12.0 8.0 20.0 1614.0 253.5 1867.5 1151.5 248.5 1400.0 1.614 April 1400.0 13.0 11.0 24.0 1798.0 654.0 2452.0 900.0 500.0 1400.0 1.496 May 2200.0 22.0 14.0 36.0 2759.0 344.5 3103.5 2007.5 192.5 2200.0 1.435 June 1400.0 16.0 13.0 29.0 1724.0 750.2 2474.2 1037.0 363.0 1400.0 1.146 2002/0 3 29818. 0 174. 0 122. 0 296. 0 33488. 0 5341.8 38829.8 26987.6 2830. 4 29818. 0 1.311 July 1350.0 19.0 9.0 28.0 1791.0 486.1 2277.1 1083.9 266.1 1350.0 1.243 August 1450.0 19.0 15.0 34.0 1970.0 399.7 2369.7 1334.3 115.7 1450.0 1.153 September 1700.0 20.0 7.0 27.0 2390.0 421.0 2811.0 1650.0 50.0 1700.0 1.073 October 2200.0 28.0 12.0 40.0 2829.0 645.7 3474.7 1905.0 295.0 2200.0 0.998 November 4518.0 14.0 14.0 28.0 4737.0 686.2 5423.2 4018.0 500.0 4518.0 1.225 December 1550.0 13.0 10.0 23.0 1711.0 757.5 2468.5 1300.0 250.0 1550.0 1.054 January 1550.0 9.0 7.0 16.0 1688.0 287.0 1975.0 1375.0 175.0 1550.0 0.885 February 4300.0 7.0 10.0 17.0 4321.0 422.7 4743.7 3924.3 375.7 4300.0 1.462 March 1750.0 12.0 14.0 26.0 2006.0 199.0 2205.0 1596.0 154.0 1750.0 1.752 April 2500.0 14.0 7.0 21.0 2691.0 371.0 3062.0 2169.0 331.0 2500.0 1.588 May 4750.0 10.0 8.0 18.0 4916.0 333.0 5249.0 4462.0 288.0 4750.0 1.824 June 2200.0 9.0 9.0 18.0 2438.0 333.0 2771.0 2170.0 30.0 2200.0 1.480 2003/0 4 51645. 0 152. 0 120. 0 272. 0 56481. 0 4960. 0 61441. 0 47921.8 3710. 2 51632. 0 1.023 July 2000.0 11.0 8.0 19.0 6882.0 6882.0 1780.0 220.0 2000.0 1.324 August 4900.0 14.0 9.0 23.0 4527.0 250.5 4777.5 4742.0 158.0 4900.0 1.765 September 3150.0 14.0 11.0 25.0 3029.0 466.0 3495.0 2859.3 290.7 3150.0 1.371 October 6000.0 15.0 18.0 33.0 2977.0 790.0 3767.0 5452.0 535.0 5987.0 1.484 November 2550.0 9.0 10.0 19.0 2831.0 446.0 3277.0 2365.0 185.0 2550.0 1.063 December 2600.0 10.0 10.0 20.0 4098.0 320.5 4418.5 2369.0 231.0 2600.0 0.862 January 5237.0 9.0 13.0 22.0 5497.0 305.0 5802.0 4931.5 305.5 5237.0 1.209 February 3400.0 11.0 9.0 20.0 3512.0 456.0 3968.0 2940.0 460.0 3400.0 0.747 March 6207.0 23.0 9.0 32.0 6351.0 636.0 6987.0 5577.0 630.0 6207.0 0.675 April 6478.0 12.0 3.0 15.0 6902.0 454.0 7356.0 6254.0 224.0 6478.0 0.647 May 4541.0 12.0 9.0 21.0 4920.0 462.0 5382.0 4240.0 301.0 4541.0 0.598 June 4582.0 12.0 11.0 23.0 4955.0 374.0 5329.0 4412.0 170.0 4582.0 0.534 2004/0 5 41262. 5 175. 0 94. 0 269. 0 49658. 5 7237.7 56896. 2 37783.9 3281.1 41065. 0 0.243 July 7219.0 40.0 8.0 48.0 8438.0 548.0 8986.0 7094.0 125.0 7219.0 0.818 August 4282.0 16.0 14.0 30.0 5656.0 551.0 6207.0 4027.0 255.0 4282.0 0.258 September 7939.0 20.0 7.0 27.0 9600.0 714.0 10314.0 7670.0 269.0 7939.0 0.228 October 4082.0 11.0 5.0 16.0 4798.0 567.0 5365.0 3875.0 207.0 4082.0 0.198 November 1000.0 12.0 7.0 19.0 1751.0 335.0 2086.0 900.0 100.0 1000.0 0.137 December 1000.0 7.0 8.0 15.0 789.0 621.5 1410.5 296.0 506.5 802.5 0.118 January 1000.0 11.0 10.0 21.0 1396.0 729.0 2125.0 829.5 170.5 1000.0 0.099 February 1000.0 9.0 5.0 14.0 1363.0 520.0 1883.0 800.0 200.0 1000.0 0.079 March 5808.5 20.0 11.0 31.0 6780.5 1302.0 8082.5 5010.4 798.1 5808.5 0.068 April 2812.5 12.0 6.0 18.0 3302.5 525.0 3827.5 2737.5 75.0 2812.5 0.050 May 3371.5 8.0 5.0 13.0 3651.5 425.0 4076.5 3146.5 225.0 3371.5 0.049 June 1748.0 9.0 8.0 17.0 2133.0 400.2 2533.2 1398.0 350.0 1748.0 0.048 … Annex 18 continued … Annex 18 continued 2008/0 9 28471. 9 83. 0 178. 0 261. 0 21974. 5 24792. 7 46767. 2 2672. 0 25167. 8 27839. 8 0.520 July 2594.0 6.0 18.0 24.0 1052.0 2332.0 3384.0 0.0 2216.0 2216.0 0.430 August 2098.0 13.0 14.0 27.0 2075.0 1958.0 4033.0 0.0 1958.0 1958.0 0.530 September 3270.0 7.0 16.0 23.0 1350.0 3084.0 4434.0 0.0 3084.0 3084.0 0.500 October 2634.0 8.0 14.0 22.0 2116.0 1405.9 3521.9 672.0 1374.0 2046.0 0.462 November 1035.0 5.0 11.0 16.0 1615.0 963.0 2578.0 0.0 963.0 963.0 0.386 December 3988.0 9.0 21.0 30.0 4062.0 3427.4 7489.4 1328.0 3427.4 4755.4 0.595 January 1052.2 2.0 8.0 10.0 350.0 1092.0 1442.0 0.0 1615.0 1615.0 0.290 February 1788.0 3.0 14.0 17.0 940.0 1842.3 2782.3 0.0 1842.3 1842.3 0.563 March 3219.4 5.0 19.0 24.0 2160.0 3336.4 5496.4 0.0 3336.4 3336.4 0.541 April 2136.0 8.0 14.0 22.0 2622.0 1494.0 4116.0 672.0 1494.0 2166.0 0.695 May 1007.3 6.0 11.0 17.0 1779.3 1067.7 2847.0 0.0 1067.7 1067.7 0.524 June 3650.0 11.0 18.0 29.0 1853.2 2790.0 4643.2 0.0 2790.0 2790.0 0.721 National Bank of Ethiopia Annual Report 2008/09 144

Annex 19. Number and Investment Capital of Domestic & Foreign Projects Approved by Sectors [capital in millions of birr] No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Agriculture, hunting and forestry 73 677 101 1,148 287 4,156 573 8,055 742 16,009 1,102 34,334 2,208 39,555 2,455 47,154 Construction 109 1,650 121 1,000 140 1,371 134 1,923 322 4,090 277 1,783 595 3,249 826 81,163 Education 73 1,186 111 1,427 173 861 206 853 260 1,421 326 2,039 333 1,577 249 5,664 Electricity, gas, steam and water supply 5 1,551 7 822 7 698 11 5,537 8 18,268 3 38 4 2,487 12 7,825 Fishing 1 2 3 5 8 105 2 4 7 100 Health and social work 23 158 28 1,053 52 264 46 1,513 90 626 145 2,684 178 1,538 155 2,255 Hotels and restaurants 11 68 19 92 90 664 248 1,417 521 2,334 539 9,466 1,385 17,912 1,091 10,466 Manufacturing 181 1,315 315 3,243 718 7,955 859 9,053 1,291 22,866 1,258 45,512 2,023 65,194 1,804 58,351 Mining and quarrying 8 53 9 40 11 86 8 123 15 1,003 18 221 37 512 25 318 Other community, social and personal service activities 5 37 12 35 26 175 10 75 25 754 21 124 141 416 89 516 Public administration and defense; compulsory social sec. 1 8 Real estate, renting and business activities 252 1,726 367 2,803 476 3,196 730 6,600 2,261 10,416 2,431 24,011 1,775 40,483 1,506 21,490 Transport, Storage and Communication 2 1 4 579 49 137 64 142 100 1,345 84 258 188 495 346 1,510 Wholesale, retail trade & repair service 8 160 8 50 38 348 54 701 93 175 180 621 332 996 242 2,713 Grand Total 750 8,582 1,102 12,291 2,067 19,911 2,944 35,992 5,731 79,312 6,392 121,196 9,202 174,426 8,807 239,525 Source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) [Capital in millions of Birr] National Bank of Ethiopia Annual Report 2008/09 145

Annex 19. Number and Investment Capital of Domestic & Foreign Projects Approved by Sectors [capital in millions of birr] No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Agriculture, hunting and forestry 73 677 101 1,148 287 4,156 573 8,055 742 16,009 1,102 34,334 2,208 39,555 2,455 47,154 Construction 109 1,650 121 1,000 140 1,371 134 1,923 322 4,090 277 1,783 595 3,249 826 81,163 Education 73 1,186 111 1,427 173 861 206 853 260 1,421 326 2,039 333 1,577 249 5,664 Electricity, gas, steam and water supply 5 1,551 7 822 7 698 11 5,537 8 18,268 3 38 4 2,487 12 7,825 Fishing 1 2 3 5 8 105 2 4 7 100 Health and social work 23 158 28 1,053 52 264 46 1,513 90 626 145 2,684 178 1,538 155 2,255 Hotels and restaurants 11 68 19 92 90 664 248 1,417 521 2,334 539 9,466 1,385 17,912 1,091 10,466 Manufacturing 181 1,315 315 3,243 718 7,955 859 9,053 1,291 22,866 1,258 45,512 2,023 65,194 1,804 58,351 Mining and quarrying 8 53 9 40 11 86 8 123 15 1,003 18 221 37 512 25 318 Other community, social and personal service activities 5 37 12 35 26 175 10 75 25 754 21 124 141 416 89 516 Public administration and defense; compulsory social sec. 1 8 Real estate, renting and business activities 252 1,726 367 2,803 476 3,196 730 6,600 2,261 10,416 2,431 24,011 1,775 40,483 1,506 21,490 Transport, Storage and Communication 2 1 4 579 49 137 64 142 100 1,345 84 258 188 495 346 1,510 Wholesale, retail trade & repair service 8 160 8 50 38 348 54 701 93 175 180 621 332 996 242 2,713 Grand Total 750 8,582 1,102 12,291 2,067 19,911 2,944 35,992 5,731 79,312 6,392 121,196 9,202 174,426 8,807 239,525 Source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) [Capital in millions of Birr] Annex 20 Expected Employment Creation of Approved Domestic & Foreign Investment Projects by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 8,727 1,641 7,825 7,393 51,924 74,466 50,212 401,403 51,438 124,189 61,843 254,486 251,878 763730 191,298 565,762 Construction 12,656 1,776 5,895 4,513 8,489 12,222 10,155 118,666 10,862 45,131 8,439 46,698 15,677 77179 39,868 151,959 Education 4,723 24 5,253 11 8,935 2,791 8,064 4,073 15,227 6,020 15,714 7,850 12,431 8529 7,912 7,372 Electricity, gas, steam and water supply 615 400 125 58 169 244 124 624 51 5,284 127 424 168 558 61 675 Fishing 24 50 146 286 60 55 155 1,370 Health and social work 1,191 0 2,613 10 2,482 565 3,877 1,311 3,308 2,074 7,857 5,584 6,916 4185 6,737 3,463 Hotels and restaurants 386 0 884 55 6,018 1,806 7,963 4,491 12,124 8,830 23,101 19,066 41,063 50193 29,080 28,023 Manufacturing 11,716 1,780 17,550 2,262 56,597 24,878 50,762 27,474 83,796 105,542 93,925 84,967 188,339 150181 106,494 95,295 Mining and quarrying 110 0 189 0 759 368 74 37 365 1,374 603 694 968 1520 690 1,257 Other community, social and personal service activities 7,381 21 9,831 677 2,207 2,455 1,138 700 1,795 1,828 1,438 1,283 2,760 4880 2,206 4,341 Public administration and defense; compulsory social sec. 25 10 Real estate, renting and business activities 429 20 885 3,919 4,913 4,647 5,448 15,658 29,491 37,066 85,846 38,166 77,997 79593 22,322 44,699 Transport, Storage and Communication 19 0 141 10 67 20 298 355 1,348 920 1,474 1,606 2,398 2207 4,478 7,459 Wholesale, retail trade & repair service 445 80 343 15 3,662 6,315 1,713 2,989 1,283 1,424 1,734 1,516 5,023 5299 4,031 7,106 187, 819 233, 514 911, 841, 1 307, 506 626, 264 742, 203 237, 933 211, 112 187, 775 828, 931 777, 031 222, 641 329, 81 435, 15 247, 5 893, 84 l at oT dnar G source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) National Bank of Ethiopia Annual Report 2008/09 146

Annex 20 Expected Employment Creation of Approved Domestic & Foreign Investment Projects by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 8,727 1,641 7,825 7,393 51,924 74,466 50,212 401,403 51,438 124,189 61,843 254,486 251,878 763730 191,298 565,762 Construction 12,656 1,776 5,895 4,513 8,489 12,222 10,155 118,666 10,862 45,131 8,439 46,698 15,677 77179 39,868 151,959 Education 4,723 24 5,253 11 8,935 2,791 8,064 4,073 15,227 6,020 15,714 7,850 12,431 8529 7,912 7,372 Electricity, gas, steam and water supply 615 400 125 58 169 244 124 624 51 5,284 127 424 168 558 61 675 Fishing 24 50 146 286 60 55 155 1,370 Health and social work 1,191 0 2,613 10 2,482 565 3,877 1,311 3,308 2,074 7,857 5,584 6,916 4185 6,737 3,463 Hotels and restaurants 386 0 884 55 6,018 1,806 7,963 4,491 12,124 8,830 23,101 19,066 41,063 50193 29,080 28,023 Manufacturing 11,716 1,780 17,550 2,262 56,597 24,878 50,762 27,474 83,796 105,542 93,925 84,967 188,339 150181 106,494 95,295 Mining and quarrying 110 0 189 0 759 368 74 37 365 1,374 603 694 968 1520 690 1,257 Other community, social and personal service activities 7,381 21 9,831 677 2,207 2,455 1,138 700 1,795 1,828 1,438 1,283 2,760 4880 2,206 4,341 Public administration and defense; compulsory social sec. 25 10 Real estate, renting and business activities 429 20 885 3,919 4,913 4,647 5,448 15,658 29,491 37,066 85,846 38,166 77,997 79593 22,322 44,699 Transport, Storage and Communication 19 0 141 10 67 20 298 355 1,348 920 1,474 1,606 2,398 2207 4,478 7,459 Wholesale, retail trade & repair service 445 80 343 15 3,662 6,315 1,713 2,989 1,283 1,424 1,734 1,516 5,023 5299 4,031 7,106 187, 819 233, 514 911, 841, 1 307, 506 626, 264 742, 203 237, 933 211, 112 187, 775 828, 931 777, 031 222, 641 329, 81 435, 15 247, 5 893, 84 l at oT dnar G source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) Annex 21 Employment Created by Domestic & Foreign Investment Projects Which Have Commenced Operation by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 376 587 1,418 0 5,957 12,050 3,302 7,822 269 1,708 628 1,523 686 3623 3,232 12093 Construction 0 825 3,146 374 1,488 70 260 1,039 1840 3,539 6590 Education 842 30 466 0 1,215 289 1,020 492 460 377 306 267 342 129 259 140 Electricity, gas, steam and water supply 0 Fishing 10 37 0 0 Health and social work 306 486 66 0 10 7 21 10 8 6 122 27 47 30 245 36 Hotels and restaurants 276 49 0 0 486 131 105 25 77 63 93 39 398 261 182 71 Manufacturing 2,939 3,097 596 148 8,244 2,193 4,310 2,828 1,727 557 801 149 3,441 1998 5,235 2094 Mining and quarrying 0 10 23 0 25 0 Other community, social and personal service activities 21 0 114 77 47 37 0 44 2 Real estate, renting and business activities 48 0 20 25 1,189 2,169 583 384 763 3337 369 461 Transport, Storage and Communication 27 0 70 56 35 41 54 38 240 160 Wholesale, retail trade & repair service 80 70 649 4,057 12 5 69 334 0 0 106 278 179 170 518, 12 084, 31 635, 11 549, 6 034, 2 865, 2 765, 5 949, 3 557, 21 122, 9 059, 12 005, 71 841 645, 2 913, 4 519, 4 l at oT dnar G source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2 001(2008/2009 ) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) National Bank of Ethiopia Annual Report 2008/09 147

Annex 20 Expected Employment Creation of Approved Domestic & Foreign Investment Projects by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 8,727 1,641 7,825 7,393 51,924 74,466 50,212 401,403 51,438 124,189 61,843 254,486 251,878 763730 191,298 565,762 Construction 12,656 1,776 5,895 4,513 8,489 12,222 10,155 118,666 10,862 45,131 8,439 46,698 15,677 77179 39,868 151,959 Education 4,723 24 5,253 11 8,935 2,791 8,064 4,073 15,227 6,020 15,714 7,850 12,431 8529 7,912 7,372 Electricity, gas, steam and water supply 615 400 125 58 169 244 124 624 51 5,284 127 424 168 558 61 675 Fishing 24 50 146 286 60 55 155 1,370 Health and social work 1,191 0 2,613 10 2,482 565 3,877 1,311 3,308 2,074 7,857 5,584 6,916 4185 6,737 3,463 Hotels and restaurants 386 0 884 55 6,018 1,806 7,963 4,491 12,124 8,830 23,101 19,066 41,063 50193 29,080 28,023 Manufacturing 11,716 1,780 17,550 2,262 56,597 24,878 50,762 27,474 83,796 105,542 93,925 84,967 188,339 150181 106,494 95,295 Mining and quarrying 110 0 189 0 759 368 74 37 365 1,374 603 694 968 1520 690 1,257 Other community, social and personal service activities 7,381 21 9,831 677 2,207 2,455 1,138 700 1,795 1,828 1,438 1,283 2,760 4880 2,206 4,341 Public administration and defense; compulsory social sec. 25 10 Real estate, renting and business activities 429 20 885 3,919 4,913 4,647 5,448 15,658 29,491 37,066 85,846 38,166 77,997 79593 22,322 44,699 Transport, Storage and Communication 19 0 141 10 67 20 298 355 1,348 920 1,474 1,606 2,398 2207 4,478 7,459 Wholesale, retail trade & repair service 445 80 343 15 3,662 6,315 1,713 2,989 1,283 1,424 1,734 1,516 5,023 5299 4,031 7,106 187, 819 233, 514 911, 841, 1 307, 506 626, 264 742, 203 237, 933 211, 112 187, 775 828, 931 777, 031 222, 641 329, 81 435, 15 247, 5 893, 84 l at oT dnar G source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) Annex 21 Employment Created by Domestic & Foreign Investment Projects Which Have Commenced Operation by Sector Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Perm. Empl. Temp. Emp Agriculture, hunting and forestry 376 587 1,418 0 5,957 12,050 3,302 7,822 269 1,708 628 1,523 686 3623 3,232 12093 Construction 0 825 3,146 374 1,488 70 260 1,039 1840 3,539 6590 Education 842 30 466 0 1,215 289 1,020 492 460 377 306 267 342 129 259 140 Electricity, gas, steam and water supply 0 Fishing 10 37 0 0 Health and social work 306 486 66 0 10 7 21 10 8 6 122 27 47 30 245 36 Hotels and restaurants 276 49 0 0 486 131 105 25 77 63 93 39 398 261 182 71 Manufacturing 2,939 3,097 596 148 8,244 2,193 4,310 2,828 1,727 557 801 149 3,441 1998 5,235 2094 Mining and quarrying 0 10 23 0 25 0 Other community, social and personal service activities 21 0 114 77 47 37 0 44 2 Real estate, renting and business activities 48 0 20 25 1,189 2,169 583 384 763 3337 369 461 Transport, Storage and Communication 27 0 70 56 35 41 54 38 240 160 Wholesale, retail trade & repair service 80 70 649 4,057 12 5 69 334 0 0 106 278 179 170 518, 12 084, 31 635, 11 549, 6 034, 2 865, 2 765, 5 949, 3 557, 21 122, 9 059, 12 005, 71 841 645, 2 913, 4 519, 4 l at oT dnar G source: Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2 001(2008/2009 ) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) Annex 22 Number and Capital of Domestic & Foreign Investment Projects Which Have Commenced Operation, by Region No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital Addis Ababa 57 616 90 1,743 157 1,295 218 1,226 457 1,676 218 1,375 110 730 110 1,042 Afar 061 2 71 1 82 5 21 1 8 1 Amhara 11 52 14 50 31 327 93 810 86 192 61 170 27 280 51 200 B.Gumze 1 3 5 21 3 2 6 6 Dire Dawa 1 4 3 7 01 1 05 2 Gambella 2 20 2 13 2 5 Harari 1 3 Multiregional 3 54 3 36 11 104 19 177 17 219 20 193 24 1,023 Oromia 26 580 22 252 63 1,478 71 1,384 35 418 26 953 16 549 16 379 SNNPR 3 503 8 33 24 480 33 85 26 102 3 5 6 84 3 51 Somali 1 1 8 11 4 15 Tigray 15 106 18 122 20 105 31 546 57 162 34 176 4 40 39 113 Grand Total 114 1,868 160 2,273 314 3,783 465 4,207 687 2,784 367 2,904 189 1,903 245 2,967 Source:- Ethiopian Investment Agency Sector 1994(2001/2002) 1995(2002/2003) 1996(2003/2004) 2001(2008/2009) 1997(2004/2005) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) [Capital in millions of Birr] National Bank of Ethiopia Annual Report 2008/09 148

14949 Annex 23 Number and Capital of Domestic & Foreign Investment Projects Approved, by Region No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investment Capital No. of Projects Investmen t Capital No. of Projects Investmen t Capital No. of Projects Investmen t Capital No. of Projects Investmen t Capital Addis Ababa 563 4,206 788 8,152 1,283 9,754 1,285 10,145 2,854 23,227 3,287 37,596 2,618 47,426 2,773 120,471 Afar 3 22 5 48 12 97 2 59 13 6,802 24 101 20 390 46 4,880 Amhara 20 180 32 211 86 659 267 5,142 421 2,346 670 28,499 1,297 12,257 1,425 12,167 B.Gumze 1 5 2 36 7 78 17 63 17 40 96 344 153 679 182 644 Dire Dawa 29 54 39 766 43 601 87 2,474 90 2,574 124 1,200 249 4,207 190 8,079 Gambella 0 4 21 3 19 7 30 9 8 35 351 132 681 Harari 13 15 35 44 43 45 61 182 74 125 34 98 22 57 Multiregional 3 213 9 1,831 9 773 52 1,645 169 9,831 245 35,897 309 26,014 273 13,623 Oromia 63 1,668 97 1,264 315 4,905 807 9,601 1,006 18,308 890 24,409 2,978 67,178 2,689 63,573 SNNPR 18 676 56 591 186 1,207 270 1,135 886 3,271 631 6,513 1,208 11,620 543 4,488 Somali 5 53 3 10 24 341 4 31 2 43 9 43 39 188 11 56 Tigray 28 147 39 208 47 261 94 1,005 197 891 379 4,703 274 4,056 543 10,863 Grand Total 746 7,239 1,105 13,161 2,059 18,741 2,949 31,501 5,736 67,487 6,398 139,411 9,202 174,426 8,807 239,525 Source:- Ethiopian Investment Agency Sector 2001(2008/2009) 1997(2004/2005) 1996(2003/2004) 1995(2002/2003) 1994(2001/2002) 1998(2005/2006) 1999(2006/2007) 2000(2007/2008) [Capital in millions of Birr] National Bank of Ethiopia Annual Report 2008/09 149

National Bank of Ethiopia Annual Report 2008/09