Country Partnership Framework for the Democratic Republic of Ethiopia for the Period FY18-FY22

Abstract

II. COUNTRY CONTEXT AND DEVELOPMENT AGENDA Social and Political Context geographic and Regional Context Ethiopia is a large and diverse country, spanning a land mass of more than 1 million km 2 and an estimated population of approximately 92 million (World Bank, 2016), more than 80 percent of whom live in rural areas. With an annual population growth rate of 2.5 percent (2015), Ethiopia's population is estimated to reach 150 million by 2035 (World Population Prospects, 2015 Revisions, United Nations (UN)). Ethiopia is a country of 98 nationalities and peoples, with roughly 93 languages spoken. Landlocked Ethiopia, surrounded by a number of fragile and conflict-afflicted states, plays an important role in promoting regional integration and mitigating regional conflicts. Ethiopia's geopolitical landscape is complicated by fragility and conflict in neighboring countries and the resulting flow of refugees who are fleeing those conditions. Relations with Djibouti are especially close, as Ethiopia relies on Djibouti for 90 percent of its land-based trade while Djibouti receives power and fresh water from Ethiopia. Since the 1993 independence of Eritrea, when Ethiopia lost access to the sea, most trade-related cargo is shipped via Djibouti. In order to improve regional stability, Ethiopia has supported peace-building efforts in Somalia, Sudan and South Sudan by mediating peace talks and contributing personnel to peacekeeping operations. Ethiopia is a member of regional communities such as the Common market for Eastern and southern africa (COmEsa), the Intergovernmental authority on Development (IgaD), and the sana'a Forum for Cooperation (sFC). According to the Regional Integration Index 2016, 3 Ethiopia is an average performer on regional integration among IGAD countries, and the lowest performer overall on regional integration within COMESA. In terms of trade relations with its neighbors, exports to regional markets (Somalia, Djibouti, Sudan, Kenya and Egypt) account for approximately 20 percent of Ethiopia's total exports. Major exports to Somalia included khat, live animals, and fruits and vegetables; while key exports to Djibouti were khat, live animals, fruits and vegetables, and electricity. Beyond official statistics, there is significant cross-border trade that is not measured but is an important source of income for border communities. Ecology and Resilience The nature of agriculture-based livelihoods varies considerably across the country based on agro-ecological conditions. The wet highlands, predominantly in the central, northern and western parts of the country, are home to 80 percent of the population who are primarily dependent upon rain-fed cultivation. The eastern and southern parts of the country are hot, arid lowlands, which are home to mobile pastoralists. Climate change has already had an impact: temperatures have increased Country Partnership Framework for the Federal Democratic Republic of Ethiopia for the Period FY18-FY22 68