Rural Development Strategy Review of Ethiopia: Reaping the Benefits of Urbanisation

Description

Addressing rural development is key for Ethiopia's growth process. A series of government-led structural reforms have contributed to sustained growth in the country over the last two decades as well as to considerable poverty reduction in rural areas. However, Ethiopia faces critical challenges it will need to overcome to meet the needs of a growing rural population. In practice, this will require updating the existing rural development strategy in order to better integrate the interaction of rural and urban areas. Policy approaches that account for the fast urbanisation process experienced in the country will therefore be key to improving the well-being of rural populations and promoting national growth. This report takes a spatial approach to study Ethiopia's rural development strategies. It highlights the need to develop stronger and more functional linkages between rural and urban areas. As such, the development of intermediary cities and small urban centres provides large scope for inclusive rural transformation. The report is the result of rigorous analysis, and extensive consultations with national and international stakeholders. It identifies some of the key challenges faced by rural areas and provides a series of recommendations to enhance Ethiopia's rural development strategies. Foreword Acknowledgements Abbreviations and acronyms Executive summary Assessment and recommendations Introduction Ethiopia has benefitted from sustained economic growth, which has contributed to poverty reduction Ethiopia is characterised by a growing population and a large share of young people Ethiopia’s spatial dynamics are changing There has been significant progress in terms of welfare in rural areas, but the rural-urban gap is increasing Intermediary cities will play key roles for rural development and addressing the rural-urban gap Adama is an intermediary city that has strong potential for development Despite their potential, Ethiopia’s intermediary cities face critical challenges The evolution of rural development policy in Ethiopia shows the need for a better integration of rural-urban linkages How to strengthen Ethiopia’s rural development strategy? References 1 Ethiopia’s rural-urban transformation process Introduction Ethiopia’s economic transformation Ethiopia is characterised by a dynamic economy Ethiopia’s structural transformation is still ongoing Non-farm activities will be increasingly important for rural development but today they offer limited employment opportunities Economic growth paired with social policies has brought significant poverty reduction Agriculture will continue to play a key role for development Smallholders are key actors for agricultural growth in Ethiopia There is, however, scope to increase cereals productivity Ethiopia’s demographic transformation Ethiopia is going through the early stages of a demographic transition Ethiopia’s demographic transition is further reflected in the structure of its population Internal migration plays a key role in Ethiopia’s rural-urban transformation process Ethiopia’s spatial transformation Ethiopia’s rural population will continue to grow in parallel with a rapid urbanisation process Ethiopia’s urban system is heavily skewed towards Addis Ababa Urban population will double within the next 15 years Ethiopia’s smaller agglomerations are contributing the most to urbanisation and playing a growing role in the economy Urban expansion is making cities less dense, further affecting rural areas The evolution of well-being in rural areas There have been important improvements in rural well-being, but there is an increasing gap between rural and urban areas Although monetary poverty has decreased, multi-dimensional poverty remains high Conclusions Annex 1.A. Additional figures and tables References Notes 2 Ethiopian intermediary cities and their roles for rural development Introduction Intermediary cities play an important role in the urbanisation process of developing countries Urbanisation is increasingly recognised as a key factor in development What is an intermediary city? Intermediary cities can play a key role in development The increasing importance of intermediary cities in Ethiopia’s urbanisation process Ethiopia’s urban system is changing… … and intermediary cities are becoming more dynamic What is driving Ethiopia’s urbanisation and the growth of intermediary cities? Migration to urban areas is an increasingly important driver of urban population growth Intermediary cities have significant potential for rural development in Ethiopia Intermediary cities contribute to rural development in diverse ways Promoting an enabling environment is key for positive rural-urban interactions Ethiopia’s intermediary cities provide significant scope for facilitating rural-urban transformation Intermediary cities serve as market centres for agricultural goods… …and have growing potential to increase agricultural intensification and enhance diversification towards higher value-added agricultural goods However, in most cases, market linkages need to be strengthened Intermediary cities can provide employment opportunities Compared to Addis Ababa, a large share of these jobs is in the informal sector Intermediary cities promote financial flows Case study: Adama Adama is one of the most important agglomerations in the Oromia region Governance structure and financing Adama has a strong economic potential Lack of adequate infrastructure and financing limit Adama’s future development Creating employment opportunities is becoming a priority Adama could benefit from policies that build on its linkages to rural areas Challenges faced by Ethiopian intermediary cities Knowledge gap Policy gap Financing gap Lessons from countries in the region Conclusions Annex 2.A. Additional figures and tables References Notes 3 The evolution of rural development policies in Ethiopia Introduction Brief overview of national development strategies in Ethiopia before 1991 Monarchy period (1950-74) Derg period (1974-91) Ethiopia’s national and rural development strategies post-1991 Ethiopian People’s Revolutionary Democratic Front (1991 to present) Ethiopia’s policy frameworks for national development since 1991 The ADLI has functioned as the guiding framework for national development The SDPRP (2002-05) affirmed agricultural development as a key sector for poverty reduction The PASDEP (2005-10) tapped into the role of urban areas for poverty reduction while agriculture remained a national priority GTPI (2010-15) widens the national development agenda towards industrialisation GTPII (2015-20) continues the industrialisation agenda, and taps into the potential of urban areas Programmes targeting Ethiopia’s rural areas Ethiopia’s explicit rural development strategies The Rural Development Policy and Strategy (RDPS) prioritised agricultural sector development The Agricultural Growth Program (2010 to present) continues to boost agricultural sector development in high-potential areas Large government investment in rural road development programmes led to improved rural welfare and access to urban centres Rural Job Opportunity Creation Strategy (RJOCS) (2017) Social protection programmes for poverty reduction and sustaining livelihoods Rural Productive Safety Net Programme (RPSNP) (2005 to present) Governance and institutional framework of rural development in Ethiopia Local governance systems and decentralisation in Ethiopia Roles and responsibilities of subnational governments in rural and urban development Ethiopia’s urbanisation plans The inclusion of urban development in national development strategies National Urban Development Policy (NUDP) (2005) The Urban Productive Safety Net Program (UPSNP) (2017 to present) Other urban policies and initiatives Conclusions References 4 Strengthening Ethiopia’s rural development strategy Introduction Why should Ethiopia revise its approach towards rural development? How can Ethiopia strengthen its current rural development strategy? What can be done to strengthen rural development? A new approach to agricultural development Agriculture will continue to play a key role in Ethiopia’s development path However, as the country transforms, the approach to agriculture has to evolve from focusing mainly on improving agricultural supply to improving the productivity of all the elements composing agricultural value chains. Stronger policies are needed to better manage and co-ordinate newly rising activities in agri-food supply chains Mobilising resources and scaling up investment to improve the well-being of rural populations Improving basic services in rural areas and intermediary cities remains key for consolidating rural development efforts Job creation will be necessary to reduce the rural-urban gap and promote the well-being of rural populations Creating a conducive environment for private sector participation in Ethiopia will be key to facilitating job creation Enhancing co-ordination between rural and urban policies Ethiopia’s multi-level governance framework provides scope for better governance Addressing co-ordination issues between rural and urban policies will be key for improving well-being in rural and urban areas Improving the capacity of local authorities will be necessary to address the needs of a growing population Complementing the existing policy framework with a territorial approach Facilitate the development of functional territories Building functional territories, while reaping the benefits of urbanisation, will require policies that strengthen the linkages between intermediary cities and surrounding rural areas Improve the knowledge base regarding urban-rural processes and revise the existing definition of urban and rural areas Carry out spatial planning at the regional level References Note