Economic growth in Ethiopia has been led by the agricultural sector, which has been supported by policies aimed at smallholder farmers including an agricultural extension program providing modern practices, technology, and high-value crops. This has resulted in pro-poor economic growth that has significantly reduced poverty levels, especially in rural areas, through increased agricultural production and productivity. Key drivers of poverty reduction have included rising cereal, legume, and oil crop production due to expansion of cultivated land areas and increased usage of fertilizers and improved seeds, supported by overall strong economic growth over the past two decades.

1. Dynamics of poverty and its
drivers: Ethiopian experiences
Tassew Woldehanna
Associate Professor of Economics
(Addis Ababa University)
Young Lives Principal Investigator
(Ethiopian Development Research Institute, EDRI)
Policies, institutions, and markets breakout session

2. outline
• Introduction
• Economic growth
• Agriculture
• Services
• Industry
• Trends in poverty
• Poverty Headcount index – rural/urban
• Food poverty – rural/urban
• Stunting
• Wasting
• Recovery of children from stunning and growth faltering
• Reasons for recovery
• Drivers of poverty reduction

3. Introduction: economic growth and
poverty reduction
• Ethiopia followed an agriculture led industrialisation policy in which small
farmers have been given due attention since 1994
• The agricultural extension system provides small farmers with modern
agricultural practices and technology such fertilizer, improved seeds. They make
farmers focus on high value crops
• Economic growth is key to poverty reduction and food security and
employment.
• However, not all kinds of economic growth reduces poverty.
• For economic growth to be beneficial for poverty reduction, growth has to be
pro-poor.
• The Ethiopian economic growth has been pro-poor and increased in agricultural
production benefits the majority of the farmers ahs 99% of the farmers own
land.

4. Trends in economic growth
0
2000
4000
6000
8000
10000
12000
14000
GDP per capita at 2011 constant prices in Birr

5. Trends in economic growth
2010 20111 2012 2013 2014
Average
2010- 2014
Growth rate (%)
Real GDP 10.5 11.4 8.8 9.9 10.6 10.2
Agriculture 7.6 9 4.9 7.1 5,4 7.2
Industry 10.8 15 17.1 18.5 21.2 16.5
Services 13.2 12.5 9.6 8.9 11.9 11.2
Share (%)
Agriculture 41.6 44.7 43.1 42 40.2 42.3
Industry 12.9 10.5 11.5 13 14.3 12.4
Services 45.6 45.5 45.9 45.6 46.2 45.8
GDP in Million Birr @CMP 382,939 515,079 747,327 864,673 1,047,393 711,482

6. Trends in population living below
poverty line
Y1996 Y2000 Y2005 Y2011 % change 1996- 2011
National 45.5 44.2 38.7 29.6 -34.9
Rural 47.5 45.4 39.3 30.4 -36
Urban 33.2 36.9 35.1 25.7 -22.6

7. Trends in Population living below
poverty line (%)
Y1990 Y1996 Y2000 Y2005 Y2011 Y2014 Y2015
48 44.6 44.2
38.7
29.6
25.1 23.4
Population living below poverty line (%)

8. Trends in poverty headcount
index (%)
45.5 44.2
38.7
29.6
47.5 45.4
39.3
30.433.2
36.9 35.1
25.7
Y1996 Y2000 Y2005 Y2011
Trends in poverty head count (%)
National Rural Urban

9. Trends in food poverty incidences
(rural/urban)
Y1996 Y2000 Y2005 Y2011
changes in food poverty
(%)
National
49.5 41.9 38 33.6 -32.1
Rural
51.6 41.1 38.5 34.7 -32.8
Urban
36.5 46.7 35.3 27.9 -23.6

10. Trends in food poverty or hunger
Y1996 Y2000 Y2005 Y2011
49.5
41.9
38
33.6
Trends in hunger or food poevrty

11. Trends in poverty headcount
index
51.6
41.1 38.5 34.736.5
46.7
35.3
27.9
Y1996 Y2000 Y2005 Y2011
Food poverty headcount index national, rural and urban
Rural Urban

12. Trends in child malnutrition
58
51
44 4041
33 29 25
12 12 10 9
0
10
20
30
40
50
60
70
2000 2005 2011 2014
Trends in child malnutrition (2000-2014)
Stunting
Underweight
Wasting

13. Trends in stunting by place of
residence
0
20
40
60
80
Y1996 Y1998 Y2000 Y2004 Y2011 Y2014
Trends in stunting of children by rural/urban
Rural Urban

14. Trends in rural stunting and
wasting
7.6 9.7 9.8 8.4
30.4
9
66.6
56.2 57.9
48.5 46.2 41.8
Y1996 Y1998 Y2000 Y2004 Y2011 Y2014
rural
Wasting Stunting

15. Trends in urban stunting and
wasting
5.3 8.5 6.4 6.5
16.3
7.9
58.4
40.5 44.4
29.6 31.5
24.3
Y1996 Y1998 Y2000 Y2004 Y2011 Y2014
Urban
Wasting Stunting

16. Recovery of children from Stunting (R1-R4)
logntifunal study of childhood poverty
– young Lives study
41
31
21
29
1 years old
(2002)
5 years old
(2006)
8 years old
(2009)
12 years old
(2013)
Stunting %

17. Associates of linear growth catch-
up or growth recovery
• Children has recovered from their stunting, not only
within 1000 days, but after
• Between 1 and 4 year
• Between 5 and 8 years
• Very few between 8 and 12 years
• Many factors including improved wealth, protection of
people from shock, improvement in sanitation facilities,
and access to health services, safety net has
contributed for recover of children from stunting
• We found stunting has negative impact of on cognitive
development (receptive vocabulary and maths test)
• HAZ at both 1yr, 5yr and 8yr are found to have effect on
cognitive development at age 8

18. Associates of linear growth catch-
up or growth recovery
• More diverse food
• Mothers education
• Household wealth
• Low birth weight
• Pre-natal and post natal economic shocks
• Drought
• Death of livestock
• Family members’ death and illness

19. Other drivers of poverty
• Increased agricultural production (mainly cereals and
legume and oil crops)
• Increased area of land cultivated
• increased agricultural productivity

20. Trends in the production of all grains
and cereals in Ethiopia (2004 – 2014)
–
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trends in all grains and cereals production (million
quintals)
All grain Cereals

21. Trends in the production of all grains
and cereals in Ethiopia (2004 – 2014)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trends in the production of legumes and oil crops (million
quintals)
Legumes oil crops

22. Trends in area (hectares) used for
production of all grains and cereals in
Ethiopia (2004 – 2014
0
2000
4000
6000
8000
10000
12000
14000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trends in the area of land used for production of crops (000
hectrares)
All grain Cereals

23. Trends in area (hectares) used for
production of legumes and oil crops
in Ethiopia (1995 – 2014)
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
1800.0
2000.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Trends in the area of land used for production of legumes
and oil crops (000 hecatres)
Legumes Oil crops

24. Trends in the productivity of crops
(quintal per hectare) (1995-2014)
0.0
5.0
10.0
15.0
20.0
25.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Treds in productivity of crops (yiled, quintal per hecatre)
Cereals Legumes oil crops

25. Trends in fertilizer consumption
and use improved seeds
0.0
500.0
1000.0
1500.0
2000.0
2500.0
3000.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Trends in fertlizer consumoption (000 metric ton) and use of
impiroved seeds (000 quintals)
Total improved seed supply in thousand Qt
Fertilizer consumption (thousand metric ton)