Download FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA1 A

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA1
A. General Country Data
Surface Area (1997)
Population (millions)
Population Growth
Urban Population (1999)
Population Density (1999)
GDP (1999) in billion
GDP per capita (1997/98)
National Budget
(1990)
(1997)
Monetary Unit
Human Development Indicator
HDI Rank out of 174 countries
1,104,000 sq.km
65.3
3% p.a.
17% of total
63 inh./ km2
US$6.5
US$109.6
27.2 % of GDP
25.5% of GDP
Ethiopian Birr
0.252
169
Borders, Topography and Climate
Ethiopia is found in the Horn of Africa. It is surrounded on the south by Kenya and Somalia, in the
east by Somalia and Djibouti, in the north by Eritrea and in the west by Sudan. The country has
an area of 1,104,000 square km, about twice the size of France, and a population of 65.3 million
in 2001.
Ethiopia is a country of great geographical diversity with altitudes ranging from 110 meters below
sea level to 4620 meters above sea level. It is made up of high and rugged mountains, flattopped plateaux, and deep gorges with rivers and rolling plains. There are 18 major agricultural
zones and 62 sub-zones having their own physical and biological potentials and constraints. The
climatic conditions closely follow the topographic conditions: the higher areas being wetter and
cooler, and the lower areas drier and hotter. In general, about 50 percent of the country
receives annual rainfall ranging from 800 to 1600 mm. But for about 55 percent of the country,
the variation of annual rainfall might be as high as 50 percent. In terms of effect, slopes and
runoff on the highlands, and high temperature and evaporation in the lowlands have adverse
effects.
The majority of the Ethiopian population is concentrated in the highland plateaux, which show
alpine vegetation, while the lowlands are characterized, by bushlands, woodlands, savannah
grasslands and semi-arid shrubs. Small rains come during February and March, while the big rains
predominate from June to September. One consequence of the rugged terrain is a poor
transportation system, a major obstacle to development, limiting the nation’s capacity to
provide services and exploit natural resources.
Characteristics, and Recent Developments of the Political System
The Federal Democratic Republic of Ethiopia was established in August 1995. The new
constitution established multi-party based parliamentary system, and democratically elected
1
The terms and data used in this publication are in no way an indication of the authors' position regarding the legal
status of the countries, territories, cities or zones mentioned, or of their authorities or borders.
governments at Federal and regional levels. Election is done every 5 years. The constitution
emphasises democracy, peace and development.
The Federal Government is responsible for national defence, foreign relations, and general
policies of common interests and benefits. Regional States are vested with legislative, executive
and judicial powers for self-administration. The country is divided into regions, and the regions
into lower administrative units. Experience shows that the regional governments have serious
constraints of lack of adequate financial and human resources to effectively carry out the
management of decentralized administration and development. Effort is now being made to
build up the capacity of lower administrative units (woredas and kebeles) to enable them caters
to the needs of people at grass root level.
Agriculture in Ethiopia
Agriculture accounts for 50 percent of GDP, 90 percent of the foreign export earnings and
employs about 85 percent of the population. Smallholders manage close to 95 percent of the
cultivated land and contribute about 96 percent of the annual agricultural output.
Agriculture production in Ethiopia is largely rain-fed and traditional. Its sensitivity to climatic
changes is so high that agricultural production has been frequently fluctuating along with
rainfall. Invariably, failure in rains means drought resulting in food deficiency in both crop
producing and pastoralist’s areas, and a decline in the economy as a whole. The performance
in agricultural production could be seen from the perspective of two time phases: Until the mid1990s (from 1979/80 to 1993/94) food production from both crop and livestock origins grew
annually by only 0.5 percent making it necessary for the country to increasingly depend on food
aid to cover the chronic shortfalls in domestic supplies; and from the mid-1990s, Ethiopia has put
a vigorous effort to intensify production in areas where rainfall is reliable. The effort involved the
use of participatory extension system and demonstration trials where improved agronomic
practices, and increased use of inputs were intensively promoted using farm credit system. There
has been consistent increase in the distribution of inorganic fertilizer and improved seeds. This
effort in extension has produced very tangible results: in the farms of participating farmers in the
extension package: the yields of major crops were increased two to three times, and total crop
production has gone up from an average of 5.5 million tons from 1985 to 1996 to an average of
9.1 million tons since 1996; and there is now an increased awareness and change of attitude
about the importance of the rehabilitation of natural resources.
Despite this, the total domestic production was not adequate to ensure national and household
food security. For one thing, production has a tendency to fluctuate as per the weather and
rainfall. For another, production in drought-prone lowland areas did not show much
improvement because of the lack of appropriate technical packages, and poor development
of water resources and infrastructures. The more serious threat was the fast growth of population,
which grew by almost 2.9 to 3.1 percent (over 2 million additional people annually), seriously
negating the progress made on the food production side.
Current Economic Situation
The structure of the Ethiopian economy changed very little in the last 18 years. The percentage
share of the sectors is agriculture 51.2, service 38.1 and industry 10.6.
The key constraint is the extremely high dependence on agriculture, where land and labour
productivity are very low. The contribution of the other sectors towards the national economy
has remained stagnant over a long period of time. This means that the degree to which the
Ethiopian economy grows largely depend on the performance of the agricultural sector. The
latter in turn entirely depends on the vagaries of nature and other man made uncertainties such
as war.
The average growth rate of the economy /GDP in the past 7 years ranged from 4.4 to 6.2 %.
However, the structure of foreign trade did not show marked change in the past few decades.
Coffee still dominates the country’s export hovering around 50-60 percent of the total exports. It
could be said that the sustainable development of the economy needs structural transformation
which will involve the transformation of the agricultural sector and reducing the role of
agriculture in the economy by significantly increasing the growth of the other sectors, particularly
industry.
B. On-going Decentralization Process
Background, Objectives, and Legal Framework
The Ethiopian state has a history of more than 2000 years. However, the modern state was not
born until the mid 19th century. The modern Ethiopian empire flourished for about 120 years
coming to an end with the overthrow of Emperor Haile Selassie in 1974. During these years and
regimes, administrative, economic and political decision making was highly centralized.
Following the fall of the military, Transitional Government of Ethiopia (TGE) was set up in July 1991
and decision was made to set up a decentralized regional administration within a federal
structure, introduce a multi-party politics and an independent judiciary. The decentralization has
the objective of transforming Ethiopia from a highly centralized unitary state into a federal
government based on substantial devolution to ethnically defined jurisdictions.
In August 1995, successor government to the TGE was formed known as the Federal Democratic
Republic of Ethiopia (FDRE) and the country has been divided into 9 Regions and 2 Special
Administrative Areas (the cities of Addis Ababa and Dire Dawa).
Functions, Resources, and Autonomy of Decentralized Entities
The decentralization process has produced far-reaching effect on regional planning, and
resource mobilization and utilization. Under the federal structure, the regional self-governments
have executive, legislative and judicial powers in respect of all matters within their geographical
areas except matters which fall under the jurisdiction of the FDRE which includes defence,
foreign affairs, declaration of state of emergency, conferring of citizenship, deployment of army
where situations beyond the capacity of the Regional Government arise, printing of currency,
establishing and administrating major development establishments, and administrating major
communication networks .
Article 5 of Proclamation 33/1992 of the Federal Government identifies three sources of revenue
for each region: those which are designated for its own income; those which it shares with the
Federal Government; and grants from the Federal Government. Review of the responsibilities
and resources of the regions indicate that the responsibilities are far in excess of the revenue
that can be generated from the above sources. The revenue raised by regions cover only 20 to
30 percent of their annual budget. The balance, close to 80 percent, is covered by the federal
government in the form of a grant which makes the regions heavily dependent on federal
resources.
C. Decentralization and Rural Development
Forms of Decentralization, Agricultural and Rural Development Policy Formulation
The constitution assumes a 4-tier structure: federal, regional, zonal and woreda. The country is
divided into regions, the regions into zones, and the zones into woredas. In total, there are now 9
regions, 66 zones and 556 woredas , though the zonal and woreda figures change from time to
time because of continuous administrative adjustments.
The central/federal government organ consists of the elected Council of Representatives and
the appointed Council of Ministers. The former is a legislative body with supreme power of
decision-making on matters of national concern. The Council of Ministers prepares the social and
economic development plans and budget of the federal government. It submits plans and
budgets to the Council of Representatives and implements them when approved.
A similar structure is replicated at the lower level. The Regional Council which is an elected body
for 5 years is the supreme decision making power in the region. The regional executive
committee is responsible for policymaking and major administrative decisions. It supervises the
bureaux that are counterparts to the ministries in the federal government. The bureaux are
independent of federal ministries; even though there are areas in which they co-operate and
get technical support .The responsibilities of the bureaux include policy formulation, coordination and overseeing of the activities of zonal and woreda corresponding departments
and offices, and control of capital and recurrent budgets.
The regions are divided zones, woredas and kebeles. The zone does not have its own council.
The position of the zone is a delegation of authority from the Regional Council to some of its
members to co-ordinate and administrate in its behalf the large number of woredas/districts in
the zone. Under the zonal executive committee, there are sectoral departments corresponding
to the bureaux at the regional level.
The woreda is the key or basic local administrative unit in the regional government structure. The
woreda is administratively subordinated to the region and zonal administration. It has no direct
contact with central government. It has a council and an executive committee and it has legal
mandate to plan and effectively implement development efforts in its respective area.
A woreda may consist of 7 to 15 or more kebeles. The kebele is the lowest administrative unit and
consists of a large number of households in rural or urban neighbourhood. Their major function is
to co-ordinate social and economic activities at grass-root level.
The Transitional Government of Ethiopia (TGE) announced in 1991 a New Economic Policy
liberalizing the former socialist economy by focusing on promotion of marketing development,
encouraging private sector investment and enhancing the development of rural infrastructure.
The policy placed food security at the top of its development priorities. This policy
announcement was followed by the articulation of the Agricultural Development-Led
Industrialization Strategy (ADLI) for the long-term development of the country. The strategy aims
to achieve rapid and sustainable economic growth by improving the productivity of agriculture
and building-up agro-based industrial sector using local raw materials and labour intensive
technologies. The long-term objective is to structurally transform the economy in such a way that
the relative weights of agriculture, industry and service will change significantly in favour of the
latter two.
Decentralization and Agricultural Support Services
Government has put huge resources (financial and human) to re-organize the agricultural
research system and support the extension service. Regional research organizations were
established with clear mandates and responsibilities for research in their respective regions and
to be supported by the federal institution, the Ethiopian Agricultural Research Organization
(EARO).
The Bureaux of Agriculture in the regions manage the regional extension service. The number of
extension staff in the country increased from 4000 in 1990 to over 16000 (14,165 Development
Agents, 935 Home Agents and 1281 Supervisors) by April 2000 and they are serving over 7 million
farmers. Development Agents: Farmers’ ratio went down from 1: 1500 to 1: 672 (MOA 2000)
Farmers’ co-operatives took a dive after the fall of the socialist government in 1991. Effort has
been made since then to organize them on the basis of the interest of the members and have
their footing in business activities. By 1999, there were 4222 co-operatives with 4 million members
and Birr 345 million capital (Birr 8.5 = US41). Most are service co-operatives engaged in input
distribution, grain marketing, commodities supply, and provision of other important services such
as flour milling.
Input supply including inorganic fertilizer, and pesticides and animal drugs are handled by
private companies, and improved seeds by both state enterprises and private companies.
Agricultural credit and rural marketing is not well developed largely because of the lack of micro
financing organizations operating in many rural areas , and the general problem of poor
transport and communication infrastructures. This situation has produced situations in which
some areas of the country suffer from food shortage and high prices while at the same time
other areas may be suffering from surplus production and very low prices.
Support Policies, Constraints and Evaluation of the Decentralization Process
The decentralization process has been supported by policies such as the Food Security Strategy
initiated in 1996, and Women Policy, Population Policy, Education and Health Sectors
Development Programs, Policy on HIV/AIDS and more recently Poverty Reduction Strategy.
Substantial resources from Government as well as from donors sources have been put for
agricultural development (research and extension), rehabilitation of natural resources, social
programs (health and education), institutional capacity building and rural infrastructure
development, all important measures to help the development of regions and the
decentralization process.
The major constraints of the decentralization process has been the following:
ƒ The regions do not generate sufficient resources to cover their expenditures. With limited
revenue sources at their disposal, they are dependent on transfers/heavy subsidies from the
federal government which in effect is not likely to allow them to seriously succeed in their
quest for development. Hence the revenue and budget system is going to be a major
political issue for years to come;
ƒ The elaboration of federal-regional tasks, roles, and relations is expected to take long time. It
is also likely to occur unevenly as there is great variability between the regions in terms of
economic potential, and administrative and financial capacity;
ƒ Shortage of trained manpower (professional, technical and administrative) is a national
problem. But the problem of insufficient institutional and administrative capacity tends to be
more acute in the regions and it is heavily impacting on local development. The issue is more
ƒ
ƒ
acute in remote and less developed regions as they have trouble in attracting and retaining
competent personnel;
Devolved power has not trickled down to units such as the woredas and the kebeles, which
are the focal centres of development. Hence the logical units for enhanced popular
participation are not yet fully operational as local administration for development. The
problem is appreciated and measures of institutional capacity building are recently
launched.
The formation of federal regions primarily on the basis of ethnicity and languages has
inherent dangers. Even though it may enhance peoples’ empowerment, and selfconfidence, it is also a development risk, as it tends to constrain free movement of people,
business and investment from regions to regions.
Outlook
For the decentralization process to be effective, the following need to be adequately
addressed:
ƒ
ƒ
ƒ
The availability of sufficient financial resources for the regional states;
Problem of institutional capacity of the lower administrative units in the regions to carry out
participatory development programs; and
Formulation of mutually working mechanisms to support regional development without
jeopardising national unity.