Eritrea on its northern border, and Kenya on its southern, while Somalia reaches round it on the east. The Great Rift Valley runs through these, and the whole area is cut about with ravines and fertile valleys. The Ethiopian economy has been centrally planned and has been based on collectivized agriculture. Coffee, hides, and skins are the main exports. Ethiopia has an oil refinery, but derives most of its energy from firewood, charcoal, and dung.
Industry is limited.
By the 2nd century ad the kingdom of Aksum had a brisk trade with Egypt, Syria, Arabia, and India in gold, ivory, and incense, and minted a gold currency. In the 4th century the court became Christian. Aksum collapsed c. 1000, and, after a time of confusion, the Zagwe dynasty emerged. In 1270 it was replaced by the Solomonic dynasty claiming lineal descent from Solomon and the Queen of Sheba, bringing the Amharas from the mountains of central Ethiopia to prominence. For Europe in the Middle Ages this was possibly the legendary kingdom of Prester John .