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Ethiopia is often seen as the poorest country globally. According to World Bank’s 2015 Poverty Assessment report, the growth experienced in the sector of agriculture has been the major economic activity crucial to the reduction of poverty in Ethiopia. The share of people living in poverty dropped by 33% from the year 2000 to the year 2011. The poverty rates in 2011 were 30% compared to 44% in the year 2000 (World Bank, 2015). However, with these improvements having been witnessed, several challenges persist. The World Bank (2015) reports that 37 million citizens of Ethiopia are either impoverished or at risk of impoverishment in case of adverse conditions. Additionally, the poorest Ethiopians are becoming poorer every day without the ability to purchase the expensive food items. Moreover, Ethiopia is among the largest dependents on foreign aid and most indebted nations worldwide. Other markers of poverty include inaccessibility to education, proper health care, safe water, and hygienic sanitation. All these problems, which Ethiopia faces, have raised the mortality rates. The most poverty-stricken people in Ethiopia are those who live in households headed by females, victims of the draught, landless individuals living in rural areas, urban unemployed dwellers, and street children. If the poverty situation is not addressed urgently, the whole country is likely to be thrown into a situation of unrest.

Causes of Poverty in Ethiopia

First, poor agricultural systems result in poverty. Ethiopians have relied on traditional ways of farming for over a millennia, which has contributed much to impoverishing citizens. Ethiopians engage in agriculture for producing crops for personal consumption instead of selling. These traditional agriculture methods have a low production base and have caused the poverty state the rural dwellers face. Currently, the tenure system of land presupposes that no peasants are allowed to own the land they are cultivating, hence lowering their motivation to deal with commercial farming. Moreover, in case farmers leave their lands, these lands are forfeited, making farmers avoid investing in irrigation programs and purchasing proper cultivation tools (Flynn, 2005).

Coffee overdependence has greatly contributed to poverty in Ethiopia, which is the second biggest exporter of coffee in Africa. The exports of beans make 2/3 of the income gained yearly from export. According to the Joint Committee on Foreign Affairs (2003), the coffee industry creates employment opportunities both indirectly and directly to 25% of the Ethiopian population. The global market for coffee reduced in terms of value a few years ago. Therefore, the overdependence on income from exports of coffee is a serious economic concern. Significant effects from the plummeting coffee prices have hit Ethiopia badly since the year 2000. Joint Committee on Foreign Affairs (2003) reports that in the year 2000, the revenue of $420m was collected from the export of coffee beans. However, this figure decreased to $175m in 2003, meaning that the population dependent on the production of coffee currently earns an income twice less than it earned in 2000. The resultant effect is the sharp reduction in the income of people who has grown coffee in Ethiopia over the decade (Flynn, 2005).

Moreover, poor infrastructure causes poverty in rural areas. The 20,000km road cover in the rural areas is hardly tarmacked and tarmacked roads have numerous potholes (Flynn, 2005). A good road infrastructure is fundamental for farmers in reaching bigger markets. It allows farmers to make sales of their goods at relatively higher prices and at the same time purchase their personal requirements at cheaper prices. The majority of Ethiopia’s rural regions does not have access to 18 largest Ethiopian cities. It takes many days for a person to travel to these cities. Therefore, rural farmers cannot access the large market these cities form to benefit from competitive prices (Flynn, 2005).

In addition, reduced access to quality education causes the lack of marketable skills. Diversification of livelihood is crucial in the alleviation of poverty. According to Flynn (2005), with the reliance on agriculture accounting for 85% of Ethiopians, disasters like crop failures and drought negatively affect the population. Additionally, Flynn found out that 49% of the Ethiopian population lacks diversification of activities in the year 2005. Alternative income generating methods include herding, formal employment, casual labor, and trading. Poor Ethiopians will not be in a position to evade the cycles of famine and drought if these alternative sources of income are absent. The availability of infrastructure that promotes the education of Ethiopians is needed to empower them to be in a position to pursue other alternatives like formal employment apart from the sector of agriculture (Flynn, 2005).

Finally, the conflict in the region has also contributed to poverty in Ethiopia. Ethiopia’s war with Eritrea is estimated to have cost $2m, which brought unnecessary and unbeneficial strain on the expenditure of the government (Flynn, 2005). Furthermore, the conflict has resulted in the inflow of about 1 million refugees, fleeing war in South Sudan and Somalia. Finally, the conflict has made the middle class and the educated citizens move out of Ethiopia, leaving the country without the expertise and skills to address poverty (Flynn, 2005).

The Ethiopian government has pledged to implement a number of policies to reduce poverty. They include the provision of water, decentralization of resources, and provision of improved educational infrastructure. Moreover, the government needs to revamp the industries; increase exports, especially of products from the agriculture sector; and invest in research on agriculture, irrigation, and harvesting of water (Flynn, 2005).

Recommendations on how to Tackle Poverty in Ethiopia

As the World Bank suggests, the Ethiopian farmers should be given assets. The present tenure system, which leaves farmers landless whenever they leave their land behind, is retrogressive. The insecurity of tenure makes farmers have less motivation to invest in these lands. Once farmers are allowed to own assets, they will be in a position to do commercialized agriculture. Consequently, the government’s insistence on peasant farmers remaining on the lands belonging to them may hinder the economic growth of Ethiopia (Flynn, 2005).

The peasants should also be allowed to sell the lands that they have, which is likely to be an economic stimulus. To make good utilization of the economies of scale, many small farms belonging to peasants can be brought together to make larger farms for commercialized farming. Such reorganization may bring down the costs of producing crops and in the end, the market price. Bigger farms producing larger volumes of crops will create employment opportunities in the rural setting, in both agricultural and agricultural dependent industries like food processing industries (Flynn, 2005).

Furthermore, the government of Ethiopia should encourage farmers to join cooperatives. In 2005, Flynn found out that only 0.8% of peasant farmers are members of cooperatives and only 1.4% of the land is utilized for cultivation and production by cooperatives. Farmers can be encouraged to become members of these cooperatives through initiatives like increasing the supply of quality seeds and fertilizers to cooperative societies. It gradually enables the members of the cooperatives to enjoy economies of scale during harvesting, transportation, and selling of farm products. The economy of the rural areas is then likely to be rejuvenated by the increased revenue they receive (Flynn, 2005).

The government should also emphasize the need for Ethiopian girl child education as the economic development is dependent on both male and female education. Educated women are in a position to address issues of improved health, sanitation, and family planning. Investments made for girls have a direct effect on the future of their children too. The World Bank (2015) reports that mothers with primary school education having children aged one year are likely to feed them properly to avoid stunted growth. The government should also avail necessary health resources such as contraceptives (Parker, 1995).

The government should also mobilize the labor surplus to enhance the economy. Farmers have labor as their major asset because they can engage in farming only at particular seasons of the year. Therefore, it is the main resource of Ethiopia, and the mobilization of seasonal surplus labor into major projects of construction should be done. Among the effects expected one may outline expanding cultivated land, reducing poverty in rural areas, and improving projects on land with increased yield. Other effects include an increment on the ratio of cropping via irrigation, increment of labor productivity, development of the industries dealing with construction locally, and the establishment of agriculturally oriented workshops (Pomfret, 1997).


Even though the drought is a major challenge facing Ethiopia, the adverse effects follow it can be tackled by making a robust investment in the education, healthcare, sanitation, water supply, transport infrastructure, and reforms in the sector of agriculture. The Ethiopian government has shown commitment to fighting poverty. However, the help from the international community and foreign aid are still required to win this fight. The foreign help should not necessarily be food or financial aid. It can be through the training and support accorded to the Ethiopian government by organizations like the United Nations, the World Bank, and other agencies. The implementation of the proposed policies requires positive reforms in the system of governance. The mobilization of labor and provision of irrigation and education should be immediately commenced. The productivity of both capital and labor will definitely rise if these recommendations are implemented. The adoption of recommendation will alleviate most Ethiopian citizens from the poverty and all the associated problems that come with it.

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