Ethiopia currently has 2.4 billion dollars of foreign reserves, representing a decline compared to previous years.

[41] Since ancient times, Ethiopian traders exchanged gold, ivory, musk, and wild animal skins for salt and luxury goods, such as silk and velvet.

[41] From there, one route went north to Mitsiwa via Gonder and Adwa, the other along the Awash River valley to Harer and then on to Berbera or Zeila on the Red Sea.

[41] There had been some improvements in communications, particularly in the area of road building, and attempts had been made to establish a few small industries and to introduce commercial farming, particularly in Eritrea, which Italy had occupied since 1890.

[41] Wage labor was limited, economic units were largely self-sufficient, foreign trade was negligible, and the market for manufactured goods was extremely small.

[41] To accomplish this task, Ethiopia needed infrastructure to develop resources, a material base to improve living conditions, and better health, education, communications, and other services.

[41] The First Five-Year Plan (1957–1961) sought to develop strong infrastructure, particularly in transportation, construction, and communications, to link isolated regions.

[41] However, unlike its predecessors, the third plan expressed the government's willingness to expand educational opportunities and to improve peasant agriculture.

[41] However, according to data from the Ethiopian government's Central Statistical Authority, during the 1960/61 to 1973/74 period the economy achieved sustained economic growth.

[41] Between 1960 and 1970, Ethiopia enjoyed an annual 4.4 percent average growth rate in per capita gross domestic product (GDP).

[41] About four-fifths of the population were subsistence farmers who lived in poverty because they used most of their meager production to pay taxes, rents, debt payments, and bribes.

[41] Manufacturing took a downturn as well, and agriculture reached a crisis stage, particularly due to drought that lead to widespread famine.

They can now import their machines without customs duties, benefit from a tax exemption for ten years, pay rents much lower than market prices, and use very inexpensive water and electricity.

Production is overwhelmingly of a subsistence nature, and a large part of commodity exports are provided by the small agricultural cash-crop sector.

[49] This land grabbing has raised fears of food being exported to more prosperous countries while the local population faces its own shortage.

Some factories have replaced all their employees on average every 12 months, according to a 2019 report of the Stern Centre for Business and Human Rights at New York University.

Gold, gemstones (diamonds and sapphires), and industrial minerals are important commodities for the country's export-oriented growth strategy.

[55] The country has deposits of coal, opal, gemstones, kaolin, iron ore, soda ash, and tantalum, but only gold is mined in significant quantities.

Oil exploration in Ethiopia has been underway for decades, ever since Emperor Haile Selassie I granted a 50-year concession to SOCONY-Vacuum in September 1945.

[63][64] The reserves are estimated at 4 trillion cubic feet (110×10^9 m3), while exploration for gas and oil is underway in the Gambela Region bordering South Sudan.

Prior to the outbreak of the 1998–2000 Eritrean–Ethiopian War, landlocked Ethiopia mainly relied on the seaports of Asseb and Massawa in Eritrea for international trade.

The services sector consists almost entirely of tourism, with additional economic opportunity in wholesale and retail trade, transportation, and communications.

Recovery began in the 1990s, but growth has been constrained by the lack of suitable hotels and other infrastructure, the impact of drought, the 1998–2000 war with Eritrea, and the specter of terrorism.

[73] A decade later, in 2019, Ethiopia registered a record of 812,000 tourists visiting the country, bringing a revenue of $3.55 bn (4.2 percent of the gross national product).

[74][75] The following table displays the trend of Ethiopia's gross domestic product at market prices, according to estimates by the International Monetary Fund with figures in millions of Ethiopian Birr.

The financially conservative government has taken measures to solve this problem, including stringent import controls and sharply reduced subsidies on retail gasoline prices.

Nevertheless, the largely subsistence economy is incapable of supporting high military expenditures, drought relief, an ambitious development plan, and indispensable imports such as oil; it therefore depends on foreign assistance.

In December 1999, Ethiopia signed a $1.4 billion joint venture deal with the Malaysian oil company, Petronas, to develop a huge natural gas field in the Somali Region.

By the year 2010, however, implementation failed to progress and Petronas lost its license to develop the field, which is now being invested in by Chinese company, Poly-GCL Petroleum.[87][which?

After the completion of the Grand Ethiopian Renaissance Dam (GERD) total generation of exports to neighboring countries is expected to bring in US$1 billion annually to the economy.