Ethiopia: resources for poverty eradication

Ethiopia is one of the fastest-growing non-oil-producing economies in Africa, with an average gross domestic product (GDP) growth of 8.2% between 2000 and 2010, significantly higher than the Sub-Saharan average of 4.7%, and above the East African average of 6.7%. However, around 10% of the Ethiopian population live in chronic poverty and are dependent on government social safety net programmes. Extreme weather conditions, coupled with poverty and poor infrastructural development, increases the vulnerability of the population to food insecurity and undoes the benefits of development gains.

Our analysis reveals that  despite increased investment in social sectors, there has been only a slow improvement in socio-economic, health and poverty indicators. Rapid population growth compared with unequal economic growth could contribute to this. Ethiopia receives the largest proportion of aid or ODA in Eastern Africa – in 2010, it accounted for 7% of the regional total.

The Government of Ethiopia has embarked on a series of policies targeting socio-economic transformation, growth and poverty reduction, which look at:

  • Government revenue – in 2010/11, domestic revenue accounted for 81% of total revenue, while the remaining 19% was accounted for by grants;
  • Public expenditure on education, health and agriculture – total government expenditure in Ethiopia increased from US$3.2 billion in 2005 to US$5.6 billion in 2011.

It is important that growth and infrastructural development are equal and targeted towards those living in poverty.