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Civic Webs Virtual Library |
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A Brief History of Trade and Business in Ethiopia from Ancient to Modern Times Dr. Richard Pankhurst |
These two articles are adapted from a study presented by the author to the 74'th District Conference and Assembly of Rotary International, held in Addis Ababa from 7 to 9 May, 1999. They were published in the Addis Tribune newspaper in Addis Ababa, Ethiopia on 4 June 1999 and 11 June 1999 respectively.
© Dr. Richard Pankhurst 1999
Published in the Civic Webs Virtual Library under permission from Dr. Richard Pankhurst.
Table of Contents
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Trade in Ethiopia in Ancient Times |
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Pharaohs and Ptolemies |
| Aksum | |
| Currency | |
| The Middle Ages: Market and Caravans | |
| "Primitive Money" | |
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Trade in Ethiopia in Modern Times |
| The Maria Theresa Thaler, Dollar | |
| Go to the IES Museum! | |
| The Founding of Addis Ababa | |
| A National Currency | |
| The Jibuti Railway | |
| The Bank of Abyssinia | |
| Pre-War Development | |
| The Fascist Invasion - and Liberation | |
| ECA and OAU |
1 Trade in Ethiopia in Ancient Times
Trade and business have a long history in Ethiopia.
Our earliest records are those of the Egyptian Pharaohs, who conducted numerous commercial expeditions down the Red Sea. The most important of the areas they visited was what they termed the Land of Punt, which modern scholars equate with the coast of what is now Eritrea, an area then as later intimately linked with the hinterland of what is present-day Ethiopia.Such expeditions came to the Ethiopian region largely in quest of myrrh and other incense, gold, any ebony, or other valuable wood.
The best known expedition of the Pharaohs was despatched by the rediubtable Queen Hapshetsut (1501-1479 BC), whose achievements are recorded to this day on the walls of her temple of Dair el-Bahri, at Thebes in Upper Egypt.
It was not long, however, before the Puntites, i.e. the people of the Ethiopian region, were themselves undertaking expeditions. This is evident for example from a tomb at Thebes, dating from the reign of King Amenhotep II (1447-1420 BC). It tells of two Puntite chiefs arriving with gold, incense, ebony, ostrich feathers and eggs, and animal skins, as well as two wild animals. These were the happier in that they brought their skins on their own backs.
Commercial activity in the Ethiopian region was later carried out, around the third century BC, by the Egyptian Ptolemies. They likewise sent expeditions down the Red Sea, in their case in search of elephants, which they used in their military campaigns. The monsters have aptly been termed the tanks of the ancient world.
Indian trade with Ethiopia and the Horn of Africa, though harder to document historically, was doubtless by this time also well established. This commerce owed much to the famous Trade Winds, which at various seasons of the year blew either to or from the sub-continent, thus facilitating commercial sailings with Africa.
The dawn of the Christian era coincided approximately, with the rise in what is now northern Ethiopia, of the renowned Aksumite kingdom. This was an important commercial realm, which issued its own currency, in gold, silver, and bronze. The Aksumites, who constituted the most powerful state between the Eastern Roman Empire and Persia, included both resolute merchants and skilled craftsmen.The Aksumite realm, which had its own port at Adulis, near present-day Massawa, traded widely with Egypt, Arabia, Persia, India, and even far-away Ceylon. Aksumite exports, as evident from the Periplus of the Erythraean Sea, a Greek manual probably written by an Egyptian trader around the first century AD, consisted largely of ivory, rhinoceros, tortoise-shell, and obsidian stone. Imports comprised cloth, raw metal, and a wide range of manufactured and luxury goods, including even lacquerware, wine and olive oil.
The artisans of Aksum were particularly able. This is apparent from the city’s archaeological remains, which include fine temples and tombs, as well as the famous obelisks of Aksum. The second largest, looted by Mussolini in 1937, is currently in Rome due for repatriation, as soon, we are assured, as circumstances permit. Yes, I know it should have been dismantled many months ago, but some countries are slower than others in meeting international obligations.
Though the Aksumites minted their own coins, many of which have been found in Egypt, Palestine, Arabia and India, when trading with the interior they also engaged in what is termed "silent trade". This was reported by Kosmos Indikopleustes, an early sixth century Egyptian merchant-cum-monk. He states that Aksumite traders, when travelling to the Blue Nile area to obtain gold, would take with them cattle, as well as pieces of salt and iron.They would then make a large hedge of thorns around their camp, after which they would slaughter some of their livestock, and place portions of the meat, together with pieces of salt and iron upon the fence, before withdrawing into their camp. The local people would then come and put gold beside the meat, salt and iron, they wished to obtain in exchange for the gold and would then withdraw.
The traders would then approach. If satisfied with the quantity of gold offered they would take it, and go back to their camp, whereupon the locals would pick up the meat, salt and iron offered in exchange, but if unsatisfied, would return, and recover their articles.
"Such", Kosmos writes, was "the mode in which business is transacted... because the language is different and interpreters are hardly to be found".
1.4 The Middle Ages: Markets and Caravans
Ethiopian trade in the Middle Ages was based largely on two institutions: local markets and long distance merchants’ caravans.Markets were to be found in all major towns, but more commonly in the countryside, where fairs were usually held weekly at some distance from inhabited settlements. Such markets would be attended by local people coming to buy and sell their produce, as well as to exchange gossip, but also by travelling merchants, in many cases handling imported articles. Such traders would probably attend a different fair each day.
Merchants, who for security often travelled together in large caravans made their way across the length and breadth of the country. Those seeking ivory, gold, civet musk, and slaves would journey to the rich lands of Ethiopia’s south-west. If engaged in the import-export trade they would, however, make their way to the Red Sea port of Massawa, the Gulf of Aden ports of Tajurah, Zeila and Berbera, or to the Sudan frontier in the far west. Imports in this period, as earlier, consisted largely of cotton and manufactured goods.
Currency, which had come to an end in Aksumite times, was no longer used in this period. Gold measured by weight, was, however, employed by the merchants for large-scale transactions, but most people made use of barter, or so-called "primitive money". The latter is the name given to articles which were used for exchange purpose instead of money. They consisted, in Ethiopia, of amoles, or bars of rock salt mined in the Danakali, or Afar, depression; pieces of iron, to be used for the local manufacture of spear-heads, sickle-blades, sword-blades, etc.; and pieces of cloth, to be later worn as clothing. After the coming of fire-arms, bullets or cartridges, were also much used as "primitive money".Trade in those days was largely in the hands of Ethiopian Muslims, or foreigners, including Arabs, and Armenians, though Greek and Indian merchants later came to the fore.
2 Trade in Ethiopia in Modern Times
2.1 The Maria Theresa Thaler, or Dollar
The late eighteenth and early nineteenth centuries witnessed the arrival in Ethiopia of an Austrian coin: the Maria Theresa thaler, or dollar. This remarkable silver coin, which was called after Empress Maria Theresa of Austria, and was minted in Vienna, gained an extensive circulation throughout the Middle East, including Ethiopia. Its coming helped to equalise the disequilibrium between Ethiopian exports, which were substantially greater than the country’s imports.
Queen Maria Theresa died in 1780, and all Maria Theresa thalers minted thereafter bore that date.
The thaler also constituted a valuable source of silver, for it was melted down for the manufacture of jewellery, as well as that of crosses and other ecclesiastical objects.
The thaler was likewise used as a weight, use in the weighing of such valuable articles as gold, as well as in medicine.
Visitors to Addis Ababa wishing to see such silverware, and other Ethiopian treasures, should make their way to the Institute of Ethiopian Studies Ethnological Museum and Art Gallery, situated in the main University campus, at Siddest Kilo. The museum is open at week-ends, but closed on Mondays.
Maria Theresa coins, which, unlike salt, cloth and other articles of "primitive money", could easily be buried, were often so buried, and thus used as a way of saving.
2.3 The Founding of Addis Ababa
Ethiopian trade and business were transformed by the founding, around 1887, by Emperor Menilek, of a new Ethiopian capital: Addis Ababa. This settlement, which was situated almost in the centre of the Ethiopian realm, became the site, in the late nineteenth and early twentieth centuries, of many important innovations.
The establishment of the city was followed, in 1892, by Menilek’s reform of the system of land taxation, and by the introduction of the Australian eucalyptus tree - which solved what had previously been an acute shortage of timber and firewood.
Not long afterwards, in 1894, steps were taken to issue the country’s first currency since Aksumite times, as well as Ethiopia’s first postage stamps, after which the country joined the International Postal Union, in 1908.
The year 1894 also witnessed Menilek’s granting of a first concession for the construction of a railway to the Gulf of Aden port of Jibuti. Work on the project began two years later, after which the line reached the railway town of Dire Dawa in 1902, and the vicinity of Addis Ababa in 1915.
The coming of the railway, led, as may be imagined, to a considerable expansion of trade. Commercial developments of this period included, among many other things, the advent of corrugated iron roofing, which arrived around 1902, and was soon to dominate the capital’s housing. The railway also resulted in a great expansion of coffee exports, which before long accounted for over 50 per cent by value of total exports.
The first Ethiopian students to go abroad for study at Government expence left for Europe at about this time. The first batch went to Tsarist Russia, and others to neutral Switzerland, though many others later went to Egypt, Lebanon, France and elsewhere.
The construction of the first modern roads, from Addis Ababa to Addis Alam and from Harar to Dire Dawa, the installation of the earliest Ethiopian telephone-telegraph system, and the founding of the country’s first Amharic newspaper, likewise date from the first half decade of the twentieth century.
No less important was the establishment, in 1905, of Ethiopia’s first bank, the Bank of Abyssinia, which ten years later began issuing paper money - today a collectors’ item almost impossible to find!
Modernisation also witnessed the naming of Menilek’s first Cabinet, the founding of the first Ethiopian Government hotel, the Etege Hotel, and the coming of the first two motor cars, all in 1907; the establishment of the country’s first modern school, the Menilek School, in 1908; the capital’s first hospital, the Menilek Hospital, in 1910; and Ethiopia’s first state printing press, in 1911
Such modernisation, which, it goes without saying, had a profound influence on Ethiopia’s trade and business, was continued after Menilek’s death in 1913.
Most of this development took place during the reign of Empress Zawditu, and the Regency of Ras Tafari Makonnen (the future Emperor Haile Sellassie), as well as the latter’s subsequent reign as Emperor.
This period witnessed the general expansion of roads, schools, and hospitals, as well as the coming to Addis Ababa of the first aeroplane, in 1929; and the establishment of first Ethiopian radio in 1933. One of the first ‘planes, christened Tsehai after the Emperor’s daughter of that name, is currently in Italy, it is hoped awaiting repatriation.
A new currency was also inaugurated.
2.8 The Fascist Invasion - and Liberation
The Italian Fascist invasion, of 3 October 1935, which lies outside the scope of this article, was followed by the country’s Liberation in 1941.
The ensuing period witnessed many important developments of profound importance to trade. These included the establishment of Ethiopian Airlines, the country’s first domestic airline, several factories, and insurance corporations, the enactment of the country’s first commercial code and other codes, besides a great expansion of roads, telephone and telegraph services, schools, hospitals, etc.
There was also a great expansion of banking, including the founding of Addis Ababa Bank, the country’s first private bank; the inauguration of a new, and more widely accepted, national currency, and the final withdrawal of the Maria Theresa thaler.
This period likewise witnessed Ethiopia’s increasing involvement in the African continent, with the establishment in Addis Ababa of the headquarters of the Economic Commission for Africa (ECA) in 1958, and the Organisation of African Unity (OAU), in 1963.: Both landmarks in the emergence of independent Africa!
The last decade has moreover witnessed the coming to Ethiopia of the computer, and increasing Ethiopian access to the Web (on which, dear reader, you can now read the Addis Tribune online!) - a great improvement, we must admit. on the above-mentioned "silent trade" of Aksumite times!
Copyright © Dr. Richard Pankhurst 1999
Note for Authors: Bookmarks are included for all numbered section headings, i.e. #1, #2, etc. You can use them to directly reference any section.