Overview

The first confirmed case was reported on March 13, 2020. In the early response to the pandemic, the authorities declared a 5-month State of Emergency from April-September 2020 and closed land borders, banned inter-regional public transport and public gatherings, closed schools, ordered the shuttering of nightclubs and entertainment outlets, and announced social distancing measures. The authorities postponed the elections due to the pandemic from August 29, 2020 to the recently announced date of June 5, 2021. As new cases fell steadily from the August peak, the authorities lifted several measures. But, since late January 2021 another surge in infections led to daily new cases eclipsing the previous peak of August 2020. Encouragingly, new cases have declined steadily after peaking in early-April 2021, with the 7-day average of new cases dropping to its lowest levels since July 2020. Ethiopia received 2.2 million vaccine doses in March 2021 and aims to vaccinate 20 percent of the population by the end of 2021.

Ethiopia is highly exposed to the shock through the large contribution of air transportation to exports: the national carrier, Ethiopian Airlines, which has the largest fleet in Africa, originally announced the suspension of 80 flight routes, but resumed flights to 40 destinations on July 13. The latest information shows that the airlines is operating flights to 116 international destinations and 23 domestic destinations. Ethiopia’s goods exports were up 21 percent y/y in the first eight months of the current fiscal year (July 2020 – June 2021), supported by gold exports while non-gold exports have gained momentum in recent months but remain below the levels seen for the first eight months a year ago: coffee and manufactured exports have declined while exports of flowers and fruits and vegetables have grown slightly. Services exports, dominated by revenues generated by international air transportation, have bottomed out but also remain below the levels seen a year ago. Finally, Ethiopia benefits from improved terms of trade that arises not only from lower global oil prices for the first half of the current fiscal year, but also from the prices on its main export commodities such as coffee, oil seeds and flowers. The potential risk for COVID-19 transmission is high due to the large number of internally displaced persons living in collective sites with no options to implement the recommended norms of social distance, and no access to proper sanitation facilities and essential supplies. The dire health situation and the capacity challenges of the health system are exacerbated by other public health challenges such as cholera and measles outbreaks. According to projections of National Disaster Risk Management Committee, an estimated 30 million people could experience food consumption gaps. The urban poor are likely to be highly affected. In rural communities, food insecurity will worsen among households that rely on market purchases. COVID-19 prevention measures in some regions will likely contribute to delays in movement of commercial goods (and humanitarian goods) in the country, resulting in localized food insecurity due to shortages of food items or price increases. Finally, the humanitarian community is concerned about the ongoing deportation of Ethiopian migrants from Saudi Arabia, Djibouti, Kenya and Somalia, considering the risk of COVID-19 contagion into Ethiopia, and challenges related to their reception and assistance in quarantine centers.

Growth in FY 2019/20, while below trend, surprised on the upside as the two largest sectors -agriculture and construction - shrugged off the impact of the pandemic. Growth for FY 2020/21 is expected to be 4 percentage points lower than the pre-crisis baseline.

Reopening of the economy. The state of emergency, declared in April 2020, ended in September, and since then there had been a steady decline in COVID related restrictions. However, the recent rise in cases resulted in the authorities announcing strict enforcement of an October 2020 directive requiring the wearing of masks in public places and no gatherings of more than 50 people. Ethiopia continues to require all people entering Ethiopia from another country have a negative COVID test 120 hours prior to entering the country and undergo a mandatory 7-day quarantine at designated hotels at the traveler's expense. In addition, schools continue to operate on a rotational basis, with students assigned shifts to reduce in-person class size. Ethiopian Airlines resumed flights to about half of previously suspended destinations in July.