Addis Ababa

Addis Ababa concentrates Ethiopia's political and economic command functions in a capital city that has grown to over 5 million residents. For decades, the city's industrial parks and Oromia's surrounding coffee production defined Ethiopia's growth model. But since March 2024, 'corridor development' projects have expelled tens of thousands of residents and businesses, sometimes enforced at gunpoint without compensation, as the government reshapes urban geography.

The capital demonstrates classic primate city dynamics: political power, bureaucratic employment, and foreign investment flow disproportionately to Addis Ababa while peripheral regions like Tigray, Amhara, and the Somali lowlands generate primary production but capture less value. FDI inflows reached $4 billion in 2025, with large state-brokered deals concentrating in and around the capital. Yet announced greenfield projects plunged 75% in 2024, from $3.2 billion to $801 million, suggesting investor uncertainty despite headline figures.

Addis Ababa hosts the African Union headquarters and serves as Ethiopia's diplomatic face, attracting BRICS membership in January 2024 and WTO accession negotiations. But the city's economic health depends on stability in the surrounding regions: the civil war in Tigray, Fano insurgency in Amhara, and OLA conflict in Oromia have created 4.2 million internally displaced persons whose needs strain national resources concentrated in the capital.