IGAD  
                       Livestock  
                       Policy  
                       Initiative 
                 
       A Living from Livestock 
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                             The Contribution of Livestock  
                                                     
                                      to the Ethiopian Economy – Part II 
                                                     
                                                                                                     
                                                                                         Roy Behnke 
                                                                                       Odessa Centre 
                                                                                       Great Wolford 
                                                                                     United Kingdom 
                                                                                                     
                                                                                   Fitaweke Metaferia 
                                                                               Senior Expert, National 
                                                                                Accounts Directorate, 
                                                                                  Ministry of Finance &  
                                                                                Economic Development 
                                                                                   (MOFED), Ethiopia. 
                                                                                                     
                                                                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                     
                                                    1   IGAD LPI Working Paper No. 02 - 11 
            
       ACKNOWLEDGEMENTS 
          
       This work was made possible through the combined support of the Ministry of Finance and 
       Economic Development, Federal Democratic Republic of Ethiopia, the Livestock Policy Initiative 
       of the Intergovernmental Authority on Development, IGAD. We would particularly like to thank 
       the following IGAD LPI staff: Dil Peeling, Chief Technical Adviser, Dr. Abdi Jama, Livestock 
       Information Adviser, and Dr. Thomas Cherenet, National Technical Focal Point. Without their 
       enthusiasm and persistence this report would not have been possible. Equally, this report could 
       not have been written without access to material on livestock production collected by MOFED and 
       without MOFED’s assistance in interpreting this data. In this regard, special thanks goes to Mr. 
       Leulseged Dechasa, the Director of the National Accounts Directorate. MOFED’s explanation of 
       the methods used to calculate Ethiopia’s national accounts provided the framework for this 
       report and their contribution is gratefully acknowledged.    
       John McPeak kindly provided unpublished data from his own work on rates of animal sharing in 
       southern Ethiopia. The Brooke Ethiopia supplied information on working equines drawn from a 
       report on that subject that is currently in preparation. We wish to thank Dr. Peter Little for a 
       summary of the information that he has collected over the years on the cross border livestock 
       trade. 
        
       Roy Behnke                              Fitaweke Metaferia 
       Odessa Centre                           Senior Expert, National 
       Great Wolford                           Accounts Directorate, 
       United Kingdom                          Ministry of Finance &  
                                               Economic Development  
                                               (MOFED), Ethiopia. 
        
           
          
          
          
          
          
          
          
          
          
          
                                  2 
        
      DISCLAIMER 
      This paper on Ethiopia is part of a series of Working Papers on The Contribution of Livestock to 
      GDP in the IGAD Member States planned by the Inter-Governmental Authority on Development’s 
      Livestock Policy Initiative (IGAD LPI). The purpose of these papers is to provide support to 
      Livestock Policy Hubs in the Member States to use study outcomes in their engagements with 
      PRSPs processes in their respective countries (Ethiopia's Growth and Transformation Plan) to 
      advocate and ensure that the representation of livestock in these national strategy documents is 
      commensurate with its important contribution to economic growth, poverty reduction and food 
      security.  
      The designations employed and the presentation of material in this publication do not imply the 
      expression of any opinion whatsoever on the part of either the Food and Agriculture Organization 
      (FAO) of the United Nations or the Inter-Governmental Authority on Development (IGAD) 
      concerning the legal status of any country, territory, city or area or its authorities concerning the 
      delimitations of its frontiers or boundaries.  
      The opinions expressed in this paper are solely those of the authors and do not constitute in any 
      way the position of the FAO, IGAD, the IGAD Livestock Policy Initiative nor the governments 
      studied.  
         
          
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
         
                              3 
       
        CONTENTS 
       ACKNOWLEDGEMENTS ..............................................................................................  2 
       DISCLAIMER .......................................................................................................... 3 
       CONTENTS ........................................................................................................... 4 
       ABBREVIATIONS ..................................................................................................... 5 
       EXECUTIVE SUMMARY .............................................................................................. 6 
       INTRODUCTION ..................................................................................................... 10 
       PART I – THE CONTRIBUTION OF LIVESTOCK TO AGRICULTURAL GDP ..................................... 13 
        1.1 Introduction .................................................................................................. 13 
        1.2 Summary of previous work ................................................................................ 13 
       PART II – LIVESTOCK SERVICES NOT CAPTURED IN CONVENTIONAL NATIONAL ACCOUNTS
                                                          .................. 15 
        2.1 Introduction .................................................................................................. 15 
        2.2 Livestock-based financial services ....................................................................... 15 
                  2.2.1 The value of livestock as credit ................................................................ 17 
                  2.2.2 The value of livestock as insurance ........................................................... 18 
        2.3 Transport and haulage by equines ....................................................................... 20 
        2.4 Summary Part II: the value of livestock services to rural livelihoods ............................... 23 
       PART III – THE CONTRIBUTION OF LIVESTOCK TO THE WIDER ECONOMY ............................................... 24 
        3.1 Introduction .................................................................................................. 24 
        3.2 The role of livestock in household consumption and expenditure .................................. 24 
        3.3 Export trade in meat and live animals .................................................................. 26 
                  3.3.1 Hides, skins and leather exports ............................................................... 28 
                  3.3.2 Reassessment of the national importance of livestock sector exports .................. 29 
        3.4 Livestock products as inputs into manufacturing ...................................................... 30 
        3.5 The contribution of animal power to the transport sector ........................................... 31 
        3.6 Summary Part III: The contribution of livestock to the wider economy ............................ 32 
       CONCLUSIONS AND RECOMMENDATIONS .................................................................................................... 35 
       ANNEXES ............................................................................................................ 37 
        Annex I: Summary of recommended formula to estimate the contribution of  
           ruminant livestock to agricultural GDP ................................................................ 37 
        Annex II: GDP by economic activity at current prices (,000 birr) ........................................ 39 
        Annex III: Quantity and gross value of official Ethiopian livestock and  
           meat exports: 1970-2006 ................................................................................ 40 
       REFERENCES ........................................................................................................ 41 
          
                                    4