Gambela was founded because of its location on the Baro, a tributary of the Nile, which was seen by both the British and Ethiopia as an excellent highway for exporting coffee and other goods from the fertile Ethiopian Highlands to Sudan and Egypt.

[2] According to Bahru Zewde, British interest in the concession was due, in part, to the attraction of "tapping the allegedly fabulous commercial potential of Western Ethiopia and drawing the whole region into the economic orbit of the Sudan", but also intended "to be a brilliant British countermove to avert the virtual commercial hegemony in Ethiopia that the Djibouti-Addis Ababa Railway seemed to promise the French."

[3] A small detachment of troops from the nominal condominium of the Anglo-Egyptian Sudan was posted to Gambela to maintain order and security within the concession and defend it from outside interests in what was still a largely lawless country, following numerous Egyptian, Islamist, British and Italian interventions, and a consequent breakdown of civil authority, over the previous decades.

The Regent Ras Tafari (the later Emperor Haile Selassie), beginning on 9 July 1927, granted a number of concessions to T. Zervos and A. Danalis to construct a road 180 kilometers in length to connect Gambela with the towns of Metu and Gore.

The Ethiopian government gradually increased its control over the enclave: outlawing the Maria Theresa Thaler as legal tender, requiring all merchants to obtain passports in person in Addis Ababa, and in 1951 informing the British resident, Captain Dribble, that he could no longer judge or imprison anyone.

[6] An armed Anuak group (which John Young speculates is the Gambela People's Liberation Movement) attacked a prison in the capital 30 October 2005, freeing inmates, and killing the police commissioner.

Livestock farming, prevalent in areas like Akobo and Jikawo, faces challenges such as drought, limited grazing land, and cattle rustling from South Sudan, yet it remains vital to the economy.

Rich in minerals, Gambella boasts long-established gold mines in Dimma and newly discovered oil fields, promising economic growth.

Abundant water resources from rivers like Akobo, Baro, and Gilo, along with numerous lakes, support a thriving fishing industry, providing a crucial source of income for many residents.