Home | News    Thursday 22 January 2015

Ethiopia makes great strides in poverty reduction: World Bank

Tesfa-Alem Tekle

January 21, 2015 (ADDIS ABABA) – A new report released by the World Bank said Ethiopia had registered remarkable progress in eradicating poverty during the past decade.

Considered one of Africa’s poorest nations, Ethiopia has reduced poverty by 33 per cent since 2000, exceeding the government’s previous target of 22 per cent, the World Bank found in its latest Poverty Assessment report.

The country has also managed to increase life expectancy each year, up to 63 in 2011.

Successive economic growth induced by a boom in the agricultural sector was the main driver to Ethiopia’s success story in poverty reduction, according to the report released on Tuesday.

In 2000, the Horn of Africa nation previously recorded some of the highest poverty rates in the world, with 56 per cent of the population living below the poverty line.

“Poverty in Ethiopia fell from 44 per cent in 2000 to 30 per cent in 2011, which translated to a 33 per cent reduction in the share of people living in poverty,” the report said.

“This decline was underpinned by high and consistent economic growth,” it added.

As part of its poverty-reduction strategy, Ethiopia began introducing modern agricultural practices in 2005, as well as increasing new export schemes to shoulder economic growth.

“Although Ethiopia started from a low base, its investment in pro-poor sectors and agriculture has paid-off and led to tremendous achievements in economic growth and poverty reduction, which in turn have helped improve the economic prospects of its citizens,” says Guang Zhe Chen, the World Bank Group’s country director for Ethiopia.

Ethiopa, Africa’s second most populace nation, has managed to sustain double-digit economic growth for the past 10 years, lifting millions of people out of poverty.

According to the World Bank’s 2012 report, the Ethiopian economy has been growing at average 10.6 per cent per year between 2004 and 2011, almost twice the average rate of the Sub-Saharan Africa region (5.2%).

The latest report revealed that growth rates in Sub-Saharan Africa picked up moderately in 2014, reaching 4.5% compared to 4.2% in 2013.

“Regional GDP growth is projected to remain broadly unchanged at 4.6% in 2015. Despite headwinds, growth is projected to pick up to 5.1% by 2017, lifted by infrastructure investment, increased agriculture production and buoyant services,” the report said.

Despite the good progress made in poverty reduction, the report found that a number of challenges, including soaring inflation, means that some 37 million Ethiopians remain either poor or vulnerable to falling into poverty in the wake of an economic shock.

The World Bank indicated Ethiopia should continue focusing on agricultural growth and investments in basic services.

However, it said the potential of migration and non-agricultural growth has largely been missed.

“Alongside ongoing efforts to support self-employment, encouraging the entry and growth of firms and helping households overcome constraints to urban migration could also further help Ethiopia to reduce poverty and promote prosperity for all of is people,” it said.

“The Bank is supporting country-led efforts to improve agricultural productivity by linking farmers to markets and reducing risk and vulnerability in Ethiopia,” it adds.

Other projects included support for improving pastoralism through community development and livelihoods in Ethiopia.