10 Astonishing Facts On Ethiopia’s Turnaround, How It Did It, And The Unseen Forces Driving Growth

AFRICANGLOBE – Twenty years ago, Ethiopia had just adopted a new constitution, billed as a fresh start for a country that desperately needed one.

It had just become the world’s most populous landlocked country when Eritrea’s independence in 1993 cost it valuable access to the sea.

Being landlocked is costly to a country politically, militarily and with respect to international trade and economic security, but even that wasn’t the big ghost haunting the Horn of Africa nation.

10 Astonishing Facts On Ethiopia's Turnaround, How It Did It, And The Unseen Forces Driving Growth
Ethiopia has spent billions on new infrastructure

Ethiopia had come to be synonymous with famine and poverty, following the brutal 1984-85 famine that killed an estimated 400,000 people, with the desperate images beamed all around the world.

Even in 1995, food shortages were still common, according to records by the United Nations Development Programme (UNDP).

The country had some of the lowest development indicators in the world – gross enrollment in primary school was just 26%, and 63% of the population lived in extreme poverty.

It would have been understandable if you had written off this country and consigned it in the dustbin of history – but then you’d have been wrong.

This Sunday, Ethiopia will launch the Addis Ababa Light Rail transit line, a 34-kilometre urban transportation project, and the latest in a series of mega infrastructure projects in the country that are testament to blistering economic growth in the last few years.

City Mayor Driba Kuma said the $75m project was “a testimony of fruitful journey towards Ethiopian renaissance”, but the real story of Ethiopia’s remarkable turnaround is not even found in the reflections of the shiny glass buildings sprouting up all over Addis Ababa.

It is instead in the boring numbers and the finer details, with its tremendous transformation a recurring theme of reporting on Ethiopia lately—the World Bank projects it will be the world’s fastest growing economy this year, remarkable for a non-extractives state.

But a just released report from UK think-tank Overseas Development Institute highlights Ethiopia’s truly astonishing progress in improving material well-being with some hard and surprising numbers, and a few lessons for African countries struggling with the same:

1.    In 1995, only 37% of Ethiopia’s population was living on $1.25 or more; in 2011, the proportion was up to 63%, one of the largest declines in extreme poverty in Africa, and achieved in just a decade and a half.

2.    That makes it one of the few countries in Africa projected to be on target to meet MDG1 of halving the proportion of people in extreme poverty by 2015, according to the country’s UN office.

3.    What is unique about Ethiopia’s poverty reduction is that income inequality has for the most part been maintained at low levels, while many other countries undergoing rapid poverty reduction and high economic growth have seen inequality increase.

4.    In China, for example, where the largest poverty headcount reductions have been achieved, the Gini coefficient has increased from 0.32 in 1990 to 0.37 in 2011. In Ethiopia, the Gini has declined during this period of significant poverty reduction and high economic growth, from 0.40 in 1995 to 0.34 in 2011. (0 represents perfect equality, 1 maximum inequality).

5.    This implies that material gains have been made even at the lower end of the income distribution, blowing the argument that inequality is essential for growth out of the water.

6.    Over the course of the 1990s and the early 2000s Ethiopia managed the fastest increase in primary enrolment rates of any country in Africa, from just 26% in 1994/5 to 95% in 2012/13.

7.    This is a remarkable feat for a country emerging from famine and conflict in the 1990s and that was growing rapidly at 3% per year for 1990-2010, according to the World Bank.

8.    Although secondary enrollment is still low at 34%, in absolute terms, the increase has still been incredible—Ethiopia has managed to increase enrollment in secondary education from less than half a million in 1996/97 to just under 21.9 million in 2012/13 – a 4,280% increase in just a decade and a half.

9.    ODI’s research finds that “the sheer scale of national ambition and implementation for universal basic education is hard to overstate”; in some regions, the increase has taken place in even a shorter time: The Somali region, for example, saw primary school enrollment rise from just 32.7% to 96.9% between 2007/08 and 2012/13.

10.   And Ethiopia has also made remarkable progress in employment quantity and quality, with urban unemployment decreasing from 26% in 1999 to 16.5% in 2013 and overall underemployment dropping from 48% to 28% between 1999 and 2005, though substantial challenges in achieving stable, high-quality employment remain.

Challenges remain, however, and the ODI report says that the transformation is “far from complete”. The quality of education that they receive has not improved, nor have gains in attendance fully extended to higher levels of education.

Lagging manufacturing growth, inefficiencies and limited competition also mean that the economy hasn’t fully transformed.

How did the country do it?

The report’s authors say the country’s pro-poor, pro-rural development agenda is at the heart of the transformation; growth in agriculture has been shown to be 11 times as effective at reducing poverty as growth in extractives, services or even manufacturing in Africa.

1.    Ethiopia has spent an average 21% of its budget on agriculture from 2004-2009, compared to the African average of just 4%.

2.    It has resulted in a doubling of Ethiopia’s road network in two decades, which has allowed more farmers to bring their produce to market, the deployment of 60,000 agricultural extension workers, and the building of 9,000 farmer training centres, the equivalent of nearly one in every village, according to the ODI report.

3.    In education, Ethiopia has sought to reduce regional inequalities with a unique decentralised system, which, by allocating funds equitably across the country, has lifted up the poorest woredas (districts) fastest.

4.    The aggregate budget for education for the most remote areas rose 44%, compared to 9% for those within 50km of the capital, between 2001 and 2004.

5.    Another key driver of poverty reduction is Ethiopia’s Productive Safety Net Programme, Africa’s largest social protection scheme, which pays seven million Ethiopians in food or cash in exchange for work on agricultural-infrastructure projects that maintain food security and reduce the incidence of famine.  The PSNP mobilises 10% of the population (1.5 million households) to stabilise food supply cutting poverty nationally by 7% since 2005.

But if you think Ethiopia is now heaven on earth, you’d also be wrong.

Ethiopians make up a significant chunk of migrants to Yemen and onward to Saudi Arabia and the rich Gulf states, in search of better economic prospects.

In December, the UN reported that over the past five years, more than 500,000 people—mostly Eritreans, Ethiopians and Somalis—had reached Yemen via the Gulf of Aden and the Red Sea following treacherous journeys on vessels that are often overloaded.

Even the war that erupted in Yemen earlier this year hasn’t stopped them.  According to figures from UNHCR, more than 10,500 people have arrived in Yemen since March when the bombing campaign began, while 51,000 have left; the war in Yemen has created a circular flow in the region.

Why the contradiction, if everything in Ethiopia is so rosy now?

The Ethiopia model has been described as a top-down, state-engineered approach to delivering tangible economic benefits to citizens, in exchange for a narrowed political space where the government can maintain control, without the distracting noise of liberal democracy.

Ethiopia is such a large and diverse country – the second-most populated in Africa, spread over a million square kilometres, home to more than 70 ethnic groups. So many people in such a big place introduces numerous variables that could tip the equation the wrong way.

It means that such near-perfect execution of development demands compliance from the masses, even if it has to be enforced.

Ethiopia’s feudal history – serfdom was officially abolished in 1935 – lays the social and cultural infrastructure for people to fall into step, but also elevates the rural areas above the urban ones and gives the development agenda its explicitly pro-rural focus, unlike many other African countries where the urban areas come first.

Ethiopia has also been driven by the need to outrun the ghosts of 1984-85, and so agriculture and food security take on a near maniacal focus.

Looking at the numbers, the Ethiopia model works – for this stage, at least. But then again, it depends on who you’re asking. The ragged young people walking for days across Ethiopia into Somaliland, and spending their life savings to cross the Red Sea to Yemen might have a very different story from the more ebullient dark-suited types.

There are those leaving who feel the promised fruits of growth still remain tantalisingly out of reach—per capita incomes are still low. Others feel economic freedom while unable to fully express themselves is an expensive trade-off.

The message is that the leaders will have to better sell the dream—even China’s much-vaunted growth, built on a similar platform of total obedience, becomes immediately vulnerable once economic expansion slows.

It is a tough balancing act, but few would fail to be impressed by how much Ethiopia has achieved in such a short time.


By: Christine Mungai