In this brief, we report on measures of economic growth, poverty and agricultural activity in Ethiopia. For each category of measure, we first describe different measurement approaches and present available time series data on selected indicators. We then use data from the sources listed below to discuss associations within and between these categories between 1994 and 2017.
We find that:
- Beginning around 2004, the reduction in poverty has been slower than the rise in GDP.
- Ethiopia’s GDP (PPP in constant 2011 international $) averaged 4 percent annual growth between 1994 and 2003, rising to 10 percent average annual growth from 2004–2016.
- Using the PPP$1.90 per capita per day international poverty line, the proportion of the population in poverty fell sharply (66 to 36 percent) up to 2004, and flattened out thereafter.
- The poverty gap ratio, capturing the shortfall between each individual’s income and the poverty line, also fell sharply (26 to 8 percent) up to 2004, but rose slightly to 9 percent by 2012.
- Poverty estimates using the national poverty line rather than $1.90/day fall slightly more in the period after 2004, though still at lower rates than before 2004 and counter to the sharp rise in GDP.
- The share of total employment in agriculture, generally stable from 1994 to 2006, increased from 47 percent in 2006 to a peak of 73 percent in 2013 according to World Bank estimates. Data from Ethiopia’s Central Statistical Agency, however, estimate the share of employment in agriculture falling over three data points, from 80 percent in both 1999 and 2005 though also ending at 73 percent in 2013. Since 2013 the World Bank estimates employment dropping by approximately one percent each year.
- Value-added in agriculture (% of GDP) has not kept pace with overall GDP growth, though employment in agriculture has remained steady at around 70% of total employment since 2011.