News / Africa

Despite Fast Growth, Ethiopia Still Plagued by Poverty

People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
x
People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
People work on the assembly line at Huajian shoe factory in Dukem, Ethiopia, April 19, 2012.
Ethiopia has one of the fastest growing economies in the world, but remains one of the poorest countries at the same time.  It might take years before the majority of people benefit from the growth.
 
Ethiopia's economy has grown at an annual rate of nearly 10 percent for the last seven years.  But a third of the population still lives below the poverty line.
 
Samuel Bwalya is the economic advisor for the United Nations Development Program (UNDP) in Ethiopia.  Bwalya says that the country has to be patient while waiting for a trickle-down effect to lift more people from poverty:

"Ethiopia is starting from a very low base in terms of development, so it should actually take much longer for this impact to take root," Bwalya noted.  "So I think we are too much in a hurry to see seven-year growth to start asking questions about how many people are out of poverty.  Ethiopia is still very poor.  But if you look where Ethiopia is coming from, it has made significant progress in reducing poverty."

The late Prime Minister Meles Zenawi was often praised for his approach to helping the poor.  Poverty has declined by a total of 10 percent in the last seven years.  But the country is still one of the largest donor recipients worldwide, receiving over $3 billion annually.
 
Ethiopia ranked 174th out of 187 countries in the UNDP's 2011 Human Development Report.  Life expectancy is estimated at just 57 years, the inflation of 26 percent remains a problem for most people and there are over 12,000 street children in the capital city alone.
 
Bwalya of the UNDP says ongoing measures by the Ethiopian government will benefit the whole of the Ethiopian population in the long run.

"Ethiopia is spending over 40 percent of its budget on infrastructure development, public works, schools, health and roads," Bwalya added.  "That is extremely important in the initial period and these are investments that bring impact, slightly, in the medium- to long-term.  We don't see the impact of actually constructing a road today, to take impact on the lives of people the next day.  It may take a couple of years to do that."

Despite these investments, there are still challenges to make sure the economic growth helps all Ethiopians.  Youth unemployment continues to be a major problem.
 
Jan Mikkelsen is the International Monetary Fund's (IMF) resident representative in Ethiopia.  Mikkelsen believes the country is making progress in the public sector.  But he also believes that the private sector should be able to help the economy overcome some challenges such as the large number of young people who don't have jobs.

"We believe that most of the employment in the long haul will be generated in the private sector," Mikkelsen noted.  "So this will be more dynamic, new jobs in new areas - IT (information technology), trade manufacturing and so forth.  That's where sustainable high value jobs will be."

The IMF also believes the financial sector needs to be developed further to support smaller businesses, especially in rural areas.  But the private sector is given little room to operate in Ethiopia's state-run economy, and there is little direct foreign investment.
 
Wolday Amha is the director of the Association of Ethiopian Microfinance Institutions.  He says that loans needed by micro-enterprises are coming from the poor themselves, and voices support for this approach.

"What you see in these countries in the rural areas and urban areas is huge demand for loans," Amha explained.  "This country is mobilizing resources from the poor people.  If this is hijacked by the private sector, which wants to maximize profit at all costs, that will be a disaster, and it will create economic, political crisis."

The government is implementing its Growth and Transformation Plan, which has ambitious development and economic projects that aim to make Ethiopia into a middle-income country by 2025.
 
Whether Ethiopia will achieve this goal with its current approach remains difficult to say, says Mikkelsen:
 
"There are different models around the world and there's not one development model that is the right one," Mikkelsen said.

Ethiopia predicts its economy will expand by more than 10 percent again in 2013.  The IMF and the World Bank predict slightly less robust growth of seven percent.

You May Like

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violencei
X
Lenny Ruvaga
November 27, 2014 7:05 PM
The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid