Ethiopia is the second most populous country in Africa with a population of 94 million people and a high dependency on rural agriculture. Located in “the Horn of Africa” and with a long and rich history, it has great potential in terms of its natural capital, such as tourism and minerals. Currently, however, it is agriculture that is the main engine for the economy, and which accounts for over 40% of gross domestic product (GDP), 60% of exports, and 80% of total employment. Moreover, the majority of agricultural farming production is via vulnerable smallholders: 95% of agricultural GDP is produced by 12.7 million shareholders and over 6 million struggle to feed their households through cultivating plots of a hectare or less (IFAD, 2014: 2).
Lack of rainfall is an ongoing concern in Ethiopia, and the country is currently facing what may be the worst drought in 30 years, with negative impacts being more strongly felt in high-risk households located in the pastoral areas of the lowlands and the high-density parts of the highlands (IFAD 2014). GMA’s Ethiopia initiative is being carried out in partnership with North-South Consulting, with input from the Ethiopian Women’s Exporters Association, with the aim to help reduce poverty by mapping agro credit, which is vital for irrigation. Supporting and aiding increased access to credit is a key driver in terms of lowering risk around food security and livelihoods.
As noted by IFAD, 2014: “Ethiopia has enormous potential for agricultural development. At present only about 25 per cent of its arable land is cultivated, and agriculture is dominated by subsistence rainfed farming, using few inputs and characterized by low productivity” (p. 1).
Ethiopia has made significant progress in terms of reducing poverty: it is currently the world’s fastest-growing economy (WorldBank Factbook 2015), and poverty has been halved over the last 20 years due to a social protection programme which puts 70 percent of public capital towards pro-poor sectors, principally agriculture, while doubling the size of the road network, allowing greater connectivity for farmers to markets. Nevertheless, IFAD (2014) notes that the main causes of rural poverty include:
• “An ineffective and inefficient agricultural marketing system;
• Underdeveloped transport and communications networks;
• Underdeveloped production technologies;
• Limited access of rural households to support services;
• Environmental degradation;
• Lack of participation by poor rural people in decisions that affect their livelihoods.” (p.2)
The basic thematic proof-of-concept map of Addis Ababa on the right shows micro-finance opportunities banded from least available to most available.
IFAD (International Fund for Agricultural Development), Investing in Rural People in Ethiopia, December 2014.
WordBank Factbook 2015.