Hectic trading action on the Ethiopian Commodity Exchange (ECX) hints at the dynamism and potential of the economy. On the exchange floor, buyers in khaki coats and sellers in green coats strike bargains on over 500,000 tonne a year of coffee, maize, sesame and white pea beans in a bustle of activity. The ECX recently boasted a billion dollars in trading and no failed trades.
The IMF has forecast that growth in Ethiopia's economy over 2011-2105 will average 8.1% a year, the third highest rate in the world after China and India. GDP is set to grow to Birr 919IMI ($45.8bn) by 2015. Although income (GDP) per capita at current prices was only $342 in 2011 (down from $350 in 2.010 and $389 in 2009 due to population growth), it is forecast to grow swiftly, to $480 by 2015.
Ethiopia recently became Africa s fourth biggest economy and has achieved annual economic growth of 8.4% after inflation over the period 2001-2010, the fifth fastest rate among the world's major economies. It also has Africa's second biggest population (figures vary between 85m and 91m), which is growing fast and promises a boom in the productive labour force in coming years.
Rising income levels from a low base, combined with a large, growing population could lead to exponential growth in the consumption of consumer goods and investors are lining up.
Estimates about the potential growth of the economy are being revised upwards, as can be seen by the high valuations that international companies have been willing to bid for a chance to compete in local consumer markets. On 1 September the Privatisation and Public Enterprises Supervisory Agency opened bids for the 100% privatisation of Meta Abo Brewery, in a prime location only 20km from Addis Ababa, with a floor price of Birr i.4bn. Global drinks giant Diageo bid Birr 3.8bn ($225m), followed by SAB Miller at $190m and Heineken at $188m. SAB already has a mineral water joint venture with the government and Heineken previously bought two other breweries for a total of $163m.
The potential for a wide range of business is growing fast with the size of the economy and because of structural transformation. Imports of goods were forecast to be $i3.8bn by 2014/15 (the Ethiopian fiscal year ends in early July) and exports to grow from $i.4bn in 2008/09 to $4.4bn in 2014/5. Gross domestic product (GDP) at current prices is estimated at Birr 470bn ($29.7bn) for 2011, up 23% from Birr 383bn.