Ethiopia is a federal parliamentary republic and Africa's second-most populous nation. Its developing economy has shown significant growth in recent years, though it remains one of the world's poorest countries per capita. Key economic sectors include agriculture (particularly coffee exports), light manufacturing, construction, and services. The country has pursued a state-led development model with major infrastructure projects (including the Grand Ethiopian Renaissance Dam) and efforts to attract manufacturing investment. Despite recent rapid growth and reforms, Ethiopia faces challenges with foreign exchange shortages, ethnic tensions, inflation, and the need for further economic liberalization. The country maintains its own currency (Ethiopian Birr) and has positioned itself as a potential manufacturing hub with industrial parks and low labor costs, though infrastructure and institutional development remain ongoing challenges.