Economic growth can only be designated as inclusive if it creates productive employment opportunities that enable target groups to lead levels of livelihood above the poverty threshold. Cognisant of this, successive Ethiopian governments have over the years identified employment creation as one of the developmental objectives. Following the 1991 regime change, the overall Ethiopian economy revived and sustained high annual growth rates. In particular, the agriculture sector registered commendable growth that led to the improvement in the per capita income.
This study has used a political economy/settlements approach to analyse the dynamics in productive employment creation across specific value chains within the commercial agriculture and agro industries sectors.
The major findings indicate that the implementation of policies and interventions aimed at promoting these sectors are not sufficiently integrated to result in backward and forward linkages that lead to expanded employment creation opportunities. While immense opportunities abound for expanding the labour-intensive agro-based-manufacturing, particularly food processing and textile production, the country’s economy is still dependent on rain-fed agriculture as the major source of employment. Consequently, the low quality of employment generated so far and the corresponding level of wages render the country’s current economic growth implausible. Further, the current gender-related policies are yet to secure women their rightful position in terms of accessing productive employment. In order to meet these challenges, the recent scheme for an activist developmental state pursued by Ethiopian government needs to design appropriate incentive packages for employees and investors in order to expand the manufacturing sector, which is the major generator of quality employment. Additionally, mechanisms for integrating agro-processing and commercial agriculture should be developed to ensure backward and forward linkages between the two as a way of increasing employment opportunities. To improve productivity the rights of workers should be promoted and employment opportunities for women expanded.
This report is part of a study on the ‘Political Economy and Settlements Analyses of Employment Creation Schemes in Agriculture and Agro‐processing Sectors in the Context
of Inclusive Growth in Africa ’, supported by the UK Department for International Development (DFID) through the Partnership for African Social and Governance Research (PASGR).
Assefa et al. (2016) Employment Creation in Agriculture and Agro‐industries in the Context of Political Economy and Settlements Analysis. PASGR Working Paper 016