Land area: 1,104,300 square kilometers
Capital City: Addis Ababa
GDP: 145.5 billion
Urban population: 19.5% of the total population
Unemployment rate: 5.3%
Population density: 88 people per square kilometer
Ethiopia is a federal government made up of 2-tiers of decentralized governance. Each region has its own elected government. The regional states derive their powers from the 1995 Constitution of Ethiopia.
The decentralization to the regional states commenced in 1995. Phase 2 of decentralization happened in 2002.
Ethiopia governance structure is also made up of districts which is popularly known as Woredas. The municipalities are in charge of towns.
Role of Regions
- Responsible for implementation of social development policies
- Maintenance of public order
Role of Woredas
- Provision and distribution of water
- Construction of roads
- Primary school;
- Primary healthcare services
- Veterinary services
- Agricultural activities
- Protection of natural resources
- Ethiopia is made up of 11 regional states whereby 9 are autonomous while 2 are chartered cities – Dire Dawa and Addis Ababa.
- There are 770 districts at the Municipal level and an average district is made up of 125,919 people.
The Constitution of Ethiopia gives powers to the states to levy income tax on employees of the state government. The states also: tax farmers, tax traders, real estate property and collect sales tax.
The federal government levies tax on sales tax, excise taxes from large scale mining, oil and gas. Tax collection by the regional governments has created inequalities.
There is also inequalities between state and federal government. For instance, the City of Addis Ababa is reported to generate approximately 25 percent of Ethiopia’s Gross Domestic Product (GDP). This charted City has the power to create new levies as well as taxes.
Borrowing by Regional Governments
Ethiopia’s regional governments are allowed to borrow. They are only allowed to borrow within the country. The amounts that a state can borrow depends on their financial capacity. That notwithstanding, there are limited instances of borrowing at the regional level.
Thank you for reading this Ethiopia fact sheet.
Sources
National Bank of Ethiopia
Belay (2014). System of division of revenue in Ethiopia. European Scientific Journal.
