Dynamics of poverty and its drivers: Ethiopian experiences

Tassew WoldehannaAssociate Professor of Economics

(Addis Ababa University)

Young Lives Principal Investigator(Ethiopian Development Research Institute, EDRI)

Policies, institutions, and markets breakout session

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

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.

Trends in economic growth

0

2000

4000

6000

8000

10000

12000

14000

GDP per capita at 2011 constant prices in Birr

Trends in economic growth

2010 20111 2012 2013 2014Average

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

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

Trends in Population living below poverty line (%)

Y1990 Y1996 Y2000 Y2005 Y2011 Y2014 Y2015

48 44.6 44.238.7

29.625.1 23.4

Population living below poverty line (%)

Trends in poverty headcount index (%)

45.5 44.238.7

29.6

47.5 45.439.3

30.433.236.9 35.1

25.7

Y1996 Y2000 Y2005 Y2011

Trends in poverty head count (%)

National Rural Urban

Trends in food poverty incidences (rural/urban)

Y1996 Y2000 Y2005 Y2011changes 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

Trends in food poverty or hunger

Y1996 Y2000 Y2005 Y2011

49.541.9

3833.6

Trends in hunger or food poevrty

Trends in poverty headcount index

51.641.1 38.5 34.736.546.7

35.327.9

Y1996 Y2000 Y2005 Y2011

Food poverty headcount index national, rural and urban

Rural Urban

Trends in child malnutrition

5851

44 404133 29 25

12 12 10 90

10

20

30

40

50

60

70

2000 2005 2011 2014

Trends in child malnutrition (2000-2014)

Stunting

Underweight

Wasting

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

Trends in rural stunting and wasting

7.6 9.7 9.8 8.4

30.4

9

66.656.2 57.9

48.5 46.2 41.8

Y1996 Y1998 Y2000 Y2004 Y2011 Y2014

rural

Wasting Stunting

Trends in urban stunting and wasting

5.3 8.5 6.4 6.516.3

7.9

58.4

40.5 44.4

29.6 31.524.3

Y1996 Y1998 Y2000 Y2004 Y2011 Y2014

Urban

Wasting Stunting

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 %

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

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

Other drivers of poverty

• Increased agricultural production (mainly cereals and legume and oil crops)

• Increased area of land cultivated

• increased agricultural productivity

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

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

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

Trends in area (hectares) used for production of legumes and oil crops in Ethiopia (1995 – 2014)

0.0200.0400.0600.0800.0

1000.01200.01400.01600.01800.02000.0

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Trends in the area of land used for production of legumes and oil crops (000 hecatres)

Legumes Oil crops

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

Trends in fertilizer consumption and use improved seeds

0.0500.0

1000.01500.02000.02500.03000.0

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

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)