URBAN ECONOMIC GROWTH AND POVERTY REDUCTION IN ETHIOPIA: THE CASE OF ADDIS ABABA

Abstract

Poverty is the main development challenges of developing countries including Ethiopia. In Ethiopia also most poverty studies have been conducted in rural areas and attempts on urban centers are somehow little. Even some attempt poverty assessment studies of Addis Ababa had conducted by different actors are based on income based approach. Those studies did not able to show the multidimensional level of poverty Addis Ababa. The poverty reduction design and implementation is based on economic growth income elasticity poverty reduction approach. This study is to explored Ethiopia economic growth elasticity of income poverty estimate and multidimensional poverty reduction in Addis Ababa using of Alkire Foster Method and evaluate poverty reduction efficiency with descriptive analysis. In doing so, both primary and secondary data were used. Primary data was obtained through focus group discussions. Secondary data was obtained from published and unpublished materials, books, journals, reports and CSA 2010/11-2014/15 HCES, WMS and DHS data sets. An Alkire Foster (AF) Method was deployed and estimated based on secondary CSA data sets whereby the multidimensional headcount ratio,intensity,adjusted headcount and the contribution of the selected insicators to the overall poverty was explored. The results showed multidimensional poor with a head count index of 63%, intensity of 37% and poverty severity of 23.3% at poverty cutoff (k=20% ) and 26%,43% and 11% at poverty cutoff (k=40%) respectivelly. The other finding of the study showed that incidence of income poverty and multidimensional poverty headcount of the study area were 18.9% and 23.3%, respectivelly.This result revealed that there are deviation between income and multidimensional poverty level. To improve the efficiency and effectiveness of poverty reduction intervention and poverty reduction development strategy designing and implementation of in urban Addis Ababa recommendable to use multidimensional poverty measurement and economic growth elasticity to multidimensional poverty reduction approach rather than income base