In 1959, the US increased its annual aid programme to Ethiopia to a total of 14 million dollars. The increased assistance came when Ethiopian economic growth slowed. During the late 1950s, the international coffee market had been glutted by increased Latin American production, and Ethiopia’s exports of cereals, oilseeds, and beans suffered from the closure of the Suez Canal and from increased competition in Africa. Industry and agriculture languished, trade was depressed, and the government drew heavily on its reserves to pay its bills. Recent high school and university graduates could not find jobs and in Eritrea there was labour unrest, capped by a general strike in Asmara on March 10, 1958. A drought and famine also struck Eritrea, Welo, Harerge, and Tigray, making it painfully obvious that agriculture suffered from a lack of investment.

Source: A History of Ethiopia
Copyright 1994 Harold G. Marcus