I. Existing trade relationship between Ethiopia & UAE

The following table indicates the Export, Import, Trade balance, Total Trade turn over and annual growth rate of turn over between Ethiopia & UAE from 2002 up to 2011 G.C.

Right from the table one can understand that the trade relationship between the two countries has a huge progress over the last ten years though the rate of growth is fluctuating.

The total trade turnover has increased from 123 million dollar in 2002 to 934.5million dollars in 2011 G.C showing a more than six fold increase in the trade relation between the two countries.

Year / Export(USD) / Growth rate / Import(USD) / Growth rate / Trade balance / Total trade turnover / Growth rate of total trade turn over
2002 / 8,628,861.49 / _ / 114,433,308.91 / _ / -105,804,447.42 / 123,062,170.40 / _
2003 / 11,936,548.29 / 38% / 163,953,617.66 / 43% / -152,017,069.37 / 175,890,165.95 / 43%
2004 / 10,492,187.41 / -12% / 204,966,322.60 / 25% / -194,474,135.19 / 215,458,510.01 / 22%
2005 / 30,783,033.55 / 193% / 224,706,910.97 / 10% / -193,923,877.42 / 255,489,944.52 / 19%
2006 / 30,569,302.20 / -1% / 348,575,075.94 / 55% / -318,005,773.74 / 379,144,378.14 / 48%
2007 / 32,598,639.67 / 7% / 450,382,720.96 / 29% / -417,784,081.29 / 482,981,360.63 / 27%
2008 / 66,515,734.68 / 104% / 974,679,059.24 / 116% / -908,163,324.56 / 1,041,194,793.92 / 116%
2009 / 68,169,288.87 / 2% / 616,966,258.76 / -37% / -548,796,969.89 / 685,135,547.63 / -34%
2010 / 78,036,738.23 / 14% / 910,524,309.66 / 48% / -832,487,571.43 / 988,561,047.89 / 44%
2011 / 75,520,815.33 / -3% / 858,918,216.88 / -6% / -783,397,401.55 / 934,439,032.21 / -5%
Export Trend
According to the above trade data, Ethiopia’s export to UAE has been increasing from around 8.6 million dollar in 2002 to 75 Million dollar in 2011 showing a relatively soaring progress.
The following graph shows Ethiopia’s export to UAE from 2002 up to 2011. The largest export was in 2010.

Since the Ethiopian Economy is an agrarian economy most of the exportable commodities are agricultural & semi processed commodities. Some of the major goods exported to UAE includes:
  • Goat meat
  • Chickpeas
  • Kidney beans
  • Camel
  • ox
  • Sesame seeds
  • Live animals (e.g. Sheep)
  • Coffee
  • Flower and vegetables
  • Oil seeds
The trend of our export is very sustainable & has even the potential to grow further in terms of value & volume as UAE has an ample market opportunity .Ethiopia can achieve a good market penetration because of the comparative advantage it has as compared to most developing countries.
Import Trend
According to the trade information, Ethiopia’s import from UAE has been tremendously growing from around 114.5 million dollar in 2002 to 859 Million dollar in 2011 showing a more than 7 fold high-ceilinged growth.
The following graph shows Ethiopia’s Import from UAE from 2002 up to 2011. The largest import was in 2008 around 975 million dollar.

The major imported commodities from UAE includes the following:
  • Petroleum oils, lubricants and grease
  • vehicles
  • Electronics
  • Woven fabrics
  • Fertilizers
  • Machineries
  • Consumer goods

It is clear from the trade statistics that the balance of trade has remained extremely in favor of UAE due to heavy imports of intermediate & manufactured goodsto Ethiopia.
RECCOMMENDATION ON EXISTING TRADE RELATION
  • Since our export to UAE is agricultural commodities the only way that we can decrease our trade balance deficit is by improving the volume and qualities of our export in terms of packaging, cost and delivery time.
  • Encouraging the UAE business community to work in partnership with Ethiopian counter parts for mutual benefits in terms of cheap labor, technology transfer, and new market access.
  • Creating sustainable relationship with the two countries business people by updating memorandum of understanding.
II. Investment trend
2.1.UAE’s Investment in Ethiopia
UAE’s investment in Ethiopia has been increasing over time. The investment trend has shown that the major sectors of investment by UAE’s businessmen are Manufacturing, Real estate, Agriculture, Educationand Construction contracting. For instance 38% of the investment projects are on manufacturing, 27% on Real estate, 23% on Agriculture, 4% on Education, 4% on Construction contracting and 4% on other investment activities. These investments have of course a tremendous economic effect for Ethiopia but should be encouraged much more as UAE has a great deal of potential in FDI.