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Poverty profile and Livelihood Diversification in Rural Ethiopia: Implications to poverty Reduction


Ethiopia is among the bottom of the least-developed countries (LDCs). Its per capita income, which is currently estimated to be US$110 is among the lowest of LDCs, and its reliance on agriculture is among the highest in the group. Poverty in Ethiopia is widespread and multifaceted. Life expectancy at birth is 50 years, infant mortality and child mortality rates are 118 and 173 per 1000 live births, respectively, illiteracy rate is about 75% for females and 55% for males, and gross enrolment ratio at primary level of education is 23%.
With clear vision of reversing the socio-economic crisis of the previous decades and transforming the country, the government of Ethiopia began economic reform program in 1992. The reform programs were aimed at reorienting the economy from command to market economy, rationalizing the role of the state and creating legal, institutional and policy environment to enhance private sector investment. The major challenge facing Ethiopia is to reduce the level of poverty of its population and their vulnerability for wide variety of crisis. To accomplish this goal, a Poverty Reduction Strategy Paper (PRSP) was prepared and endeavours to reconcile the requirements of structural reform and economic recovery with the objective of improving the well-being of the poor. The PRSP identifies four building blocks for its realization. These are: the strategy of Agricultural Development-led Industrialization (ADLI), judiciary and civil service reform, decentralization and empowerment, and capacity building in the public and private sectors.
Even though the PRSP recognises that poverty is multidimensional and multi-causal, it pays not enough attention to sustainable livelihood strategies or to social dimensions of anti-poverty strategies. Neither the full PRSP nor the interim PRSP makes significant use of terms such as 'social security,' 'inequality,' 'social integration,' 'entitlements', and 'empowerment'. Livelihood analysis is non-existent in the document and it does not exhibit an appreciation of the multidimensionality of livelihood strategies. If the 'rural sector' is to be seen as a priority with the main emphasis on increased agricultural productivity as the central plank in national poverty reduction strategy, it will be necessary for PRSP to analyse the sustainability of anticipated improvements in rural livelihoods. Sustainability analysis could be strengthened by identification of pathways towards diversification, risk analysis, environmental assessment, formal and informal social protection, and recognition of the role of savings in livelihood security

Corporate Author: 
Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Ethiopian Economic Association (EEA)
Primary Descriptors: 


Secondary Descriptor: 

Rural poor ; Manpower policy, Rural

Geographic Descriptors: 
, Rural
Cataloge Date: 
Broad Subject heading: 
Call Number: 
330.963 PRO 2004
Serial Key Title: 
Proceedings of the First International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2013-05-27 23:04:00
Forum or Discussion date: 
2013-02-27 14:55:41
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
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