CIAO DATE: 12/2012
August 2012
Center on International Cooperation
Ethiopia’s resource scarcity context presents a daunting challenge, but also a significant opportunity. The country’s current scarcity context includes: • Low agricultural yields and farm sizes: Even if farm productivity were to increase by a factor of three, the average farm would still not produce enough food for a family of five. With 83% of Ethiopia’s people directly dependent on agriculture for their livelihoods, the country has a major food security challenge; 7.5 million people depend on food safety nets. • Major exposure to drought: Ethiopia has erratic rainfall, and acutely limited water storage capacity: the country has only 43m3 of reservoir storage per person, compared to 750m3 in South Africa and 6,150m3 in North America. Levels of irrigation are also low: the World Bank estimates that only 5% of irrigable land in Ethiopia is actually irrigated. • Limited access to energy: Ethiopia’s total primary energy supply is less than 60% of the African average, and only just over a fifth of the global average. The country depends on waste and biomass for 90 of its energy needs – leading to consequences including deforestation, and soil degradation as a result of biomass not being returned to the soil. • High dependence on imported oil and food: Ethiopia currently imports all of its liquid fuels and a significant proportion of its food. This creates major exposure to global commodity price volatility, with the attendant risk of balance of payments problems, inflation and outright supply interruptions. In future, this scarcity context will be shaped by three key drivers of change, each of which presents major opportunities for Ethiopia – but also real risks that even if the government makes powerful progress on tackling current challenges, it may just be running to stand still. • Population growth rates stand at 2.73% a year, well above the African average of 2.2% and global average of 1.2%. Ethiopia’s population is projected to grow from 85 million today to 119 million by 2030 and 145 million by 2050, significantly increasing demand for land, water, energy, food and other resources. • Economic growth has remained robust even throughout the global economic crisis; while the government’s aim of 12% annual growth appears optimistic, the IMF still projects growth of 6-7% a year in the near term. If Ethiopia sustains such growth rates, this will be a further driver of significantly increased demand for resources. • Climate change is already impacting Ethiopia; is projected to lead to temperature increases of 1.1-3.1°C by the 2060s; and could reduce GDP by 3-10% by 2025. In the process, it will make the scarcity challenge harder on every front: reducing crop yields, increasing land degradation, driving lower water availability, placing more pressure on food security, and creating major additional challenges for the energy sector. Ethiopia’s government appears well aware of the risks it faces, and has put in place a battery of policies to address the country’s scarcity challenge. It has an ambitious agricultural program, allocates a high proportion of public spending to the sector, and is focusing on improving water management. It is pursuing a huge renewable energy program, especially through hydroelectric power, and aims for Ethiopia to reach middle income status by 2025 with no net increase in greenhouse gas emissions. It has built up one of Africa’s largest social protection systems, the Productive Safety Net Program (PSNP), and is building up work on household asset building and climate adaptation. Across all of these areas, the government has shown itself willing to take innovative approaches to policy development and delivery.
Resource link: Resources, risk and resilience: scarcity and climate change in Ethiopia [PDF] - 2.2M