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Ethiopia

Situation and cooperation

Skyline of the Ethiopian capital Addis Ababa

Ethiopia is a poor country. The Human Development Index (HDI 2015) ranks it 174th out of 187 countries. The biggest development challenges faced by Ethiopia include poorly developed infrastructure and an agricultural sector geared to smallholder subsistence farming, which is also heavily dependent on rainfall. A major shortage of qualified personnel, for example in public administration, makes it more difficult to implement any reforms.

The country's high population growth (2015: 99.4 million) is putting pressure on the environment and the country's resources. For more than 20 years, the population growth rate has been over 2.5 per cent per year. If this trend continues, Ethiopia will be one of the ten most populous countries in the world by 2050.

There are militant liberation movements operating in Ethiopia, which are regarded as terrorist organisations by the government. These include sections of the Ogaden National Liberation Front (ONLF), which reject the peace agreement reached with the Ethiopian government in 2010 and intend to continue fighting for the independence of this predominantly Somali region of Ethiopia. Another group, the Oromo Liberation Front (OLF), is seeking to establish an independent Oromo state. Both movements have launched repeated terrorist attacks.

Development results

Shepherds in front of mobile phone mast
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Shepherds in front of mobile phone mast

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Dried-out river bed

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Men washing their clothes in an irrigation ditch.

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Reforestation to protect against soil erosion in a river bed.

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Farmer gazing over a dried-out riverbed.

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A farmer plowing his field with oxen.

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Shepherds in the evening light

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A herd of camels

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Women building a traditional storage hut.

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Women fetching water from a water hole.

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Market day

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Football pitch

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Terraced fields in the mountains

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Farmer on a banana plantation

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Coffee beans after the harvest. Coffee probably originated in Ethiopia and is one of the main export products.

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Freshly roasted coffee beans

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Farmers harvesting

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Shepherds in front of mobile phone mast

Dried-out river bed

Men washing their clothes in an irrigation ditch.

Reforestation to protect against soil erosion in a river bed.

Farmer gazing over a dried-out riverbed.

A farmer plowing his field with oxen.

Shepherds in the evening light

A herd of camels

Women building a traditional storage hut.

Women fetching water from a water hole.

Market day

Football pitch

Terraced fields in the mountains

Farmer on a banana plantation

Coffee beans after the harvest. Coffee probably originated in Ethiopia and is one of the main export products.

Freshly roasted coffee beans

Farmers harvesting

The current government has extremely ambitious reform plans for modernising the state and reducing poverty. However, it is counting on an increasingly authoritarian style of government to achieve its plans (compare governance).

Its goal is for Ethiopia to achieve the status of a middle-income country (MIC) by 2025. The development orientation of the government is high. Through its five-year Growth and Transformation Plan for 2016 to 2020 it is following a course for growth based on a state-controlled economy with clear targets: the development of manufacturing industries, export orientation and agricultural industrialisation.

The first results of this development orientation are now visible – Ethiopia has made enormous progress over the last few years. Extreme poverty has been reduced by more than one third since 1995; child mortality has fallen by more than 60 per cent since 1990; the number of malnourished children has dropped significantly; the percentage of the population with access to safe drinking water has risen considerably; and the school enrolment rate in 2014 was around 86 per cent.


Governance

However, there are still deficits when it comes to Ethiopia’s governance, in particular with regard to political participation. The Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), an alliance of parties, is governing the country in an increasingly authoritarian fashion. The last opposition member to remain in parliament lost their seat in the parliamentary elections in May 2015. Now all of the 547 members of parliament are from the EPRDF governing coalition. The elections for the regional parliaments were held at the same time. Only 21 out of 1,987 seats went to the opposition. Since then, it has been virtually impossible for the parliaments to exercise their supervisory role. Protests that have flared up in various parts of the country since late 2015 are vigorously suppressed.

The human rights situation continues to be serious. There are several laws that curtail civil liberties. The number of arrests – including of opposition politicians and journalists – based on an anti-terrorism law, give cause for concern. Human rights organisations have decried these laws because they do not clearly define what constitutes an offense, leaving the way free for them to be used arbitrarily against political opponents.

Freedom of the press and freedom of speech are significantly restricted, as is civil society organisations’ scope for action. A law was passed in 2009 which says that Ethiopian organisations which are politically active can only receive up to ten per cent of international funding. Independent human rights organisations now lack the funding they need to do their work.

Despite a constitutional ban on discrimination and the government’s active policy on women, women’s rights in Ethiopia are not consistently upheld.

The non-governmental organisation Transparency International’s 2016 Corruption Perceptions Index (CPI) ranks Ethiopia 108th out of the 176 states that were analysed.


Economy

Students training to be car mechanics

Economic growth in Ethiopia was around 9 per cent in the period between 2004 and 2015, an above-average rate. The economy grew at a slightly lower rate of around 7 per cent in 2016. Growth rates have since returned to roughly ten per cent and the World Bank expects growth of more than eight per cent in the next few years.

Problematic aspects include Ethiopia’s low public revenues, high foreign debt and its balance of trade – the country imports considerably more than it exports. In 2014, the country's export deficit amounted to 10.4 billion US dollars.

Although some reforms have been implemented, the state still exerts a huge influence on the economy. State-owned enterprises and enterprises with close ties to political parties exercise a monopoly or are market leaders in important sectors (e.g. telecommunications, air traffic and transport, energy). Private ownership of land continues to be prohibited under the constitution. It has been impossible for the private sector to develop under these circumstances.

Agriculture is the mainstay of the Ethiopian economy. It provides work for around 80 per cent of the workforce and generates roughly 40 per cent of the country’s gross domestic product (GDP).


Development potential

Fields in eastern Ethiopia

Ethiopia has great development potential. There is enormous potential for boosting agricultural productivity. The country's main crops are coffee – Ethiopia is the biggest producer in Africa – maize, teff, wheat, sorghum, legumes, oil seeds, sugarcane and vegetables. The country has mineral reserves such as gold, tantalum ore, phosphorus, iron, salt, potash, sodium carbonate, precious stones and coal. Great hopes are being placed in the discovery of gold and mineral oil deposits in the Ogaden Basin.

In addition, Ethiopia has environmentally-friendly energy sources such as hydropower and geothermal energy. In 2010, the country started operating three new large hydropower plants and more than doubled its installed capacity as a result. Another ten plants are either already under construction or are in the planning stage. Ethiopia exports power to neighbouring Djibouti and to Kenya and Sudan.

Improvements in power supply and infrastructure are also intended to benefit tourism, a new sector with growth potential.


Priority areas of German cooperation with Ethiopia

At the government negotiations in September 2014, the German government committed 133.8 million euros in funding for the period from 2015 to 2017. Of that amount, 129 million euros is from the budget of the BMZ and 4.8 million euros from the budget of the Federal Ministry of Food and Agriculture, BMEL. Under the BMZ's special initiative 'ONE WORLD – No Hunger', Ethiopia is benefiting from some 60 million euros for measures to achieve long-term food security. In addition, Germany is providing a total of 18 million euros to help the country meet the needs of refugees.

Southern and eastern Africa have been suffering from a food crisis since autumn 2015 as a consequence of the 2015/2016 drought that was caused by El Niño, with Ethiopia being the country most severely affected. In Ethiopia, there are currently some 18 million people who are facing hunger and who are in dire need of support. The BMZ has already made 56.3 million euros available for short-term measures in Ethiopia, supporting interventions on food security, health care, water supply and sanitation. It is also helping farmers who have lost their harvests to procure seeds and animal feed.

Since 2014, development cooperation has focused on three priority areas:

  • education,
  • food security, agriculture,
  • environmental policy, protection and conservation of natural resources, and biodiversity.

In consultation with the Ethiopian government, cooperation in the field of urban development and decentralisation has ended. Ongoing projects continued until the end of 2016 to ensure that the measures have a sustained effect.

Ethiopia is a pilot country under the joint programming scheme of the European Union and its member countries. In spring 2016, a comprehensive EU joint programming process was launched that is to help better coordinate Europe's development cooperation with Ethiopia, making more effective use of it.


Education

Students training to be car mechanics

In recent years, Ethiopia has made enormous progress in the education sector – in terms of both the quality and the quantity of what is on offer. Germany is supporting Ethiopia in making vocational training, tertiary education and university research more practice-oriented.

Technical training in vocational schools is being improved by matching it with the needs of the economy and with job opportunities in the formal and informal sectors. The university training of engineers and vocational school teachers is also being improved. Other measures are being carried out at pilot institutions to improve management, introduce practice-relevant subject matter and give teaching staff in-service training.

German experts are also advising the Ministry of Education and its downstream authorities on managing the ongoing reforms and on working together with Ethiopia's private sector. This includes incorporating labour market data into educational planning. In the various regions of the country, employment-promotion pilot projects are being launched. Furthermore, the German government is supporting the establishment of technology and business start-up centres at universities.

These measures are delivering results: more than 40 Ethiopian vocational and technical schools, three universities and four examination centres are now offering education and training in new areas, in conjunction with improved practical training. More than 500 lecturers have been trained in university teaching methods. In 2012, some 353,000 students were enrolled at more than 800 vocational schools. More than 80,000 students have successfully graduated and more than 6,500 have completed a PhD, half of them in the field of engineering.


Food security, agriculture

Drip irrigation in an Ethiopian field

The Ethiopian government has set itself the goal of guaranteeing the food security of the population. To achieve this, land management will need to be improved. The conservation and sustainable use of land, forests and water, improved cultivation methods and effective erosion protection are helping to reduce soil degradation. This is enabling farmers to significantly increase the size of their harvests.

As agreed with the Ethiopian government, Germany’s efforts in this sector will be extended beyond the rural regions Oromia, Tigray and Amhara to cover other regions too. More than 50 per cent of the people in these regions live with the constant risk of food insecurity.

Farmers are being helped to tap into unused potential by diversifying production. Measures include the dissemination of methods that will increase production whilst conserving soils, and efforts to promote the responsible use of water resources. New plant varieties and improved seeds are being introduced, farmers are being taught methods of biological erosion control, and special farming methods tailored to Ethiopia’s soils are being developed.

Through these measures some 180,000 hectares of degraded land have been rehabilitated and made fit for use again, benefiting some 200,000 households. In the supported areas agricultural output has increased, leading to higher incomes for farmers.

Furthermore, through its new special initiative 'ONE WORLD – No Hunger', the German government is planning to support Ethiopia in its efforts to increase agricultural productivity in particular. To this end, an agricultural innovation centre has been set up and projects have been launched to strengthen drought resilience and improve land management.

The German government is also advising the Ethiopian authorities on improving institutional and legal frameworks. Transport routes are likewise being improved in order to reduce problems with food distribution and marketing in the country.


Environmental policy, protection and conservation of natural resources and biodiversity

Ethiopia is one of the most biodiverse countries in the world. It is home to a great variety of animals and plants, and lies within two areas which are considered biodiversity hotspots of global significance. Around 14 per cent of the country's territory has been designated as protected areas. However, in the past Ethiopia's biodiversity has been drastically curtailed as a result of land settlement, intensive grazing and large-scale investments in the agricultural sector.

Recently Germany agreed to apply a four-pronged approach within the new priority area of "environmental policy, protection and conservation of natural resources; biodiversity" in order to help improve the protection and use of the designated areas with rich biodiversity. The aim of these development cooperation activities will be to help preserve the local people's livelihoods and improve their living conditions. The four elements of this approach are:

  • conserving and capitalising on the protected areas;
  • the sustainable management of the biosphere reserves;
  • regulating the use of genetic resources and benefit sharing;
  • conserving what is left of Ethiopia's diminishing forest stands.

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