Ethiopia is on track to be the first low-income African country to achieve SDG1
We forecast that by 2029, less than 3% of Ethiopia’s population will live in extreme poverty – a first for today's low-income Sub-Saharan African countries.
Ethiopia, one of the oldest civilizations in history and located at the horn of Africa, recently launched a new tourism campaign: "Land of Origins". The slogan refers to the discovery of the first hominid Lucy in Ethiopia in 1974, to the country’s abundant UNESCO World heritage sites, but also to the fact that Ethiopia was the first African member of both the League of Nations and the United Nations.
Although still listed as a low-income country by the World Bank, Ethiopia will very likely soon add another first-mover moment to its history. If current trends continue apace, we forecast that Ethiopia will dramatically reduce the share of its population living on less than $1.90 (PPP) per day from 21.9% in September 2018 to only 2.2% in 2030. In short, the country is on the fast-track for eradicating extreme poverty; we estimate that 4.4 Ethiopians are currently escaping poverty every minute. Ethiopia could thus become the first among today's low-income Sub-Saharan-African countries to achieve UN Sustainable Development Goal 1.1 of ending extreme poverty.
Ethiopia's economy is forecasted to grow by around 7% every year from now through 2030, whereas annual population increases are expected to average 1.9%, or from 107 million people in 2018 to 136 million people in 2030. In this context, conditions are ripe for policy reform, investment and development activities to create new economic and income possibilities across the economy.
Ethiopia in the Broader African Context
On the whole, Sub-Saharan Africa is a good-news/bad-news story. First, the good news: The region is projected to lower the share of its people living in extreme poverty of today 39% to 27% in 2030. This translates, when taking population growth and income increase into account, to 164 million people - half the population of the United States - who will have been saved from a life of extreme poverty by then. The bad news, however, is that the share of 27% in 2030 is still far too much. To achieve SDG 1.1 for the entire region, 333 million people (or an additional US population) would have to be lifted above the extreme poverty threshold of PPP $1.90 over the next ten years. For Sub-Saharan Africa as a whole, then, prospects do not look bright. Forty of the fifty countries worldwide which are currently off-track to achieve SDG #1 by 2030 are located in this region. Moreover, four out of the five countries which are poised to increase their absolute number of poor people by 2030 are in Sub-Saharan Africa. For example, we forecast that Ethiopia's neighbour South-Sudan will increase its amount of people living in extreme poverty from 11 to 14 million people over the next twelve years, representing some 77% of the total population in 2030 (as we noted here).
In this context then, Ethiopia's progress is even more remarkable still. The country is demonstrating to the world and to its neighbors that smart policy reforms and governance can present a narrative of Sub-Saharan-Africa success stories. Assuming these trends hold over the medium term, our projections suggest that the country will reduce its amount of extremely poor from 23.5 million in September 2018 to around 4 million by end of 2029 -- thus fulfilling the UN Sustainability Development Goal #1.1 - to “eradicate” extreme poverty, and be the first current low income country in the region to do so.