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ADDIS ABABA, November 18, 2020 – Zebiba Mustafa, a single mother of five, lives in a remote village in Ethiopia’s Afar region. Ten years ago, her sister, Zeineba, moved to the capital Addis Ababa, where she runs a successful mini-market.
“I love my children and I am doing my best to take care of them, but my life is not easy,” Zebiba said. “If it weren’t for my sister Zeineba, who sends me money from Addis Ababa, we wouldn’t get it.”
The difference between Zebiba’s life in the country and Zeineba’s life in the city serves as an example of the current state of economic development in the country. This difference in poverty levels is the main theme of the new Ethiopia Poverty Report, Promoting Equitable Growth for All Regions, which reveals that while the national poverty rate declined, this was more the case in the areas urban than rural.
Complementing the country’s National Poverty Assessment, the report provides poverty profiles for each region and aims to shed some light on why some regions saw rapid poverty reduction between 2011 and 2016, while others did not. . Although national poverty fell from 30% to 24%, there were strong differences in the nature of poverty reduction in urban versus rural areas. Almost all 10 regions experienced strong poverty reduction in their urban areas, while only the Southern Nations, Nationalities and Peoples regions and Somalia saw significant reductions in rural poverty.
“Poverty in urban areas fell from 26% in 2011 to 15% in 2016,” said Arden Finn, an economist with the World Bank’s Poverty and Equity Global Practice and a co-author of the study. On the other hand, there was limited progress in rural areas, where poverty decreased from 30% to 26% during the same period. ‘
According to the study, in Ethiopia between 2011 and 2016, people like Zeineba who lived in urban areas experienced a reduction in poverty, while those like Zebiba, who lived in general rural areas, did not. Regions that started out poorer did not experience rapid poverty reduction over the same period. Furthermore, the report highlights that the regions that urbanized the fastest were also those that experienced the fastest reduction in poverty.
The study found that in most regions, better-off households like Zeineba’s earned the most, while poorer households like Zebiba’s made no progress. As such, inequality increased in all regions, with the exception of the Somali region. The report notes that a rise in inequality is likely to hamper sustained poverty reduction in the future.
“ If you look at non-monetary measures of well-being, on average urban areas performed much better than those that are more rural, ” said Berhe Mekonnen, an economist with the World Bank’s Global Poverty and Equity Practice and a co-author of the study. . “In the predominantly pastoralist regions of Afar and Somali, non-monetary indicators are particularly low. For example, in Addis Ababa, primary school completion for young people is 56%, but only 24% in the Somali region ”.
The economic fallout from the COVID-19 (coronavirus) pandemic threatens to undo much of the gains that were experienced in urban areas, the report notes. The loss of jobs in urban areas since the start of the pandemic has been much higher than in rural areas, and has been especially high for those who do odd jobs and the self-employed. Although employment appears to be gradually rebounding, the report says it has not yet reached pre-pandemic levels and its effects will continue to be felt predominantly in urban areas.
Although Zebiba lives in a rural area, it can also be significantly affected by the economic impact of COVID-19. While the magnitude of the virus’ impact on employment in rural areas is relatively minimal, vulnerability to poverty in rural areas is greater, according to the report. This means that since a large part of the rural population, including Zebiba, barely makes ends meet and lives just above the poverty line, even a small decrease in average income could lead to an increase. significant poverty.
The COVID-19 pandemic could also further exacerbate existing inequalities in school outcomes, the report says, particularly in regions that are already lagging in human capital indicators, such as Somali and Afar.
To continue reducing poverty and narrowing regional gaps, the study asserts that, while measures leading to broad and continued consumption growth are a necessary precondition, they must include specific measures to ensure growth in consumer consumption. poorer and more vulnerable households, like Zebiba’s. . Given the primarily agrarian nature of Ethiopia’s rural economy, the report notes that poverty reduction requires continued effort and investment to improve agriculture, non-farm job creation, and human capital.
