Ethiopia : Re-Igniting Poverty Reduction in Urban Ethiopia through Inclusive Growth

Ethiopia in the decade up to 2005 has
been characterized by robust growth rates of the urban
economy, where a still limited share of the population
lives. The urban economy has been estimated to contribute at
least half of gross domestic product (GDP) (53 percent in
2002/03) and to explain a significant part of its growth.
Only an estimated 12.6 percent of the poor live in urban
areas and the overwhelming concentration of poverty in rural
areas seem unlikely to be reversed in the medium term.
Sustained growth, to be shared among a relatively small part
of the population, could have been expected to reduce
poverty significantly in urban areas, but this has not been
the case. While poverty incidence remains lower in urban
than in rural areas, rural areas have made significant
progress and the rural-urban gap in poverty incidence is decreasing.