Spread the Growth

Spread the Growth

Ethiopia Needs to Develop Alternate Urban Growth Centres

Addis Ababa is Ethiopia’s most populous city and enjoys the status of being its economic, political and cultural capital. This reality is known as urban primacy – the concept of one urban area dominating the development and economic activities of a particular country. This imbalance creates problems for urban residents, especially in Addis Ababa. This is because the primacy of the city creates an increase in urban migration, since people from other parts of the country flock to the most active urban centres in search of economic opportunities. Development scholars note that this exacerbates a city’s resources and adversely affects quality of life. They argue that more urban areas need to develop in order to equally distribute the benefits of economic development – such as job creation and political influence – throughout the country. EBR’s Samson Hailu spoke with economists and government representatives to learn more about what’s being done to create more urban centres in Ethiopia.

In developing countries like Ethiopia, economic development and urbanisation go hand-in-hand. The reasoning is clear: Economic development entails the transformation of a nation’s economy from an agricultural-based to an industrial- and service-driven economy — and the production of manufactured goods and services will be more efficient when done in concentrated and dense districts that eventually become cities.
Urban centres, in turn, generate economic opportunities, since the clustering of companies facilitates trade, the exchanging of ideas, and reduced infrastructure costs. The diversity accompanying urbanisation also generates environments that are conducive to business and innovation.
Development studies stress that urbanisation contributes to economic progress, especially when nations pursue policies that create geographically balanced urban centres that have the potential to support long-term growth.
This scenario, however, is missing in Ethiopia, a country characterised by urban primacy, a concept used to describe the dominance of a single city within a given country. The country’s capital, Addis Ababa, still maintains dominance over all other urban centres in terms of population size, economic power and political influence.
The population projection put forward by the Central Statistical Agency (CSA) last year reveals that the population of Addis Ababa stood at 3.19 million in 2014. This means the population size of the capital is twice the size of the urban population living in all regional states’ capital cities as well as Dire Dawa.
Moreover, the population of Addis is almost equal to the 15 major urban centres in the country combined. Furthermore, the population of Addis Ababa is a little more than 10 times higher than the country’s second most populous city, Mekelle, the capital of the Tigray Region.
Teomezege Berhie, head of the Urban Good Governance and Capacity Building Bureau at the Ministry of Urban Development and Construction (MoUDC), says the primacy of the capital is a historical legacy passed down from previous governments. “Because of the strategy the Dergue Regime followed, which is a centralised system of administration, Addis Ababa intentionally became the only prime city in the country,” he says. “It takes time to undo what the previous government did.”
Currently, Ethiopia, the second most populous country in Africa, has an estimated population of nearly 90 million – and a national population growth rate of 2.6Pct per year. The country is a predominantly rural society, with 81Pct living mainly in rural areas.
Compared to other sub-Saharan African countries, Ethiopia’s urbanisation rate is low – only 19Pct of the country’s population lives in urban areas. Yet, a UN report released in 2013 reveals that the urbanisation rate in sub-Saharan Africa was 30Pct. This is despite the fact that during the last two decades, many economically viable cities in Ethiopia have experienced a large growth in population count and density.
In 1984, the overall urban population in Ethiopia was around 1.5 million, which increased to 3.7 million in 1994. By the end of 2014, that figure jumped to 16.8 million people. The level of urbanisation varies regionally, ranging from nearly 100Pct in Addis Ababa to 16.8Pct in the Somali Region.
In Ethiopia, a major urban centre is defined as an area with a population size of 100,000 or more; the classification also includes all administrative capitals, such as regional capitals, regardless of their population size.
There are 16 major urban centres in Ethiopia. The Oromia Region has the highest number of cities that fall under this category, including Bishoftu (Debrezeit), Adama (Nazreth), Jimma and Shashmene, with a combined population of 654,402.
The Amhara Region came in second, with three major urban centres, like the regional capital, Bahir Dar, as well as Gondar and Dessie. In total, these three urban centres have a combined population of 786,346. The remaining major urban centres are regional capitals and municipalities.
In addition to major urban centres, 86 medium and small urban centres exist throughout the country, each of which have a population of 1,000 or more inhabitants, most of whom are engaged in non-agricultural activities.
Despite the increasing number of urban centres over the last two decades, Addis Ababa remains dominant. Of the 16.8 million people living in urban areas, roughly 19Pct reside in the capital. The remaining 13.7 million urban residents are dispersed throughout 101 cities and urban centres.
Data demonstrates that Ethiopia’s proportionally small urban population is dispersed between one large city and several small urban towns. Development theorists stress that there is a major connection between economic growth and the degree of urban concentration, which shows the extent to which urban resources are concentrated in one or two large cities, rather than being spread among many cities.
According to a 2010 study by Shekoofeh Farahmand, assistant professor of economics at the University of Isfahan, Iran, entitled “Relationship Between Economic Growth, Urban Concentration and Trade: Evidence from the Asia-Pacific,” there is an inverse relationship between urban concentration and economic growth. This means that as the economy grows, urban concentration increases, approaches an optimal level and then declines.
Drawing from the evolution of cities and the process of urbanisation in the Asia-Pacific region, the research states that there are two outcomes that result from an optimal urban concentration. The first is a high degree of urban concentration in the early stages of economic development that is essential to efficiency, which enables the economy to spread resources proportionally.
However, the second outcome of urban concentration, after it passes the initial stages of economic development, is concerning. The city, with an initial high concentration, will eventually become a costly and congested location, making it less efficient for producers and consumers.
Marta Kibru, a lecturer of economics at Addis Ababa University, says this is the exact point at which Addis Ababa finds itself. “As we all can observe, currently problems of residential segregation, discrimination in housing markets and affordability persists in the country, particularly in Addis Ababa, despite the recent economic growth,” she argues. “High urban poverty, social exclusion and the marginalising of many low-income and minority households and the increasing rate of urban crime are proof of the alarming stage Addis Ababa is in.”
Studies reveal that there is an optimal level of urban concentration, which is dependent on a country’s level of development and size. Any deviation from the optimal level can reduce economic growth by increasing the cost of living. On the other hand, this situation decreases economies of scale in other areas.
Abel Shebirru, an urban planning expert at Nova Consulting and Designers, who used to teach at Addis Ababa University, agrees. “The uncontrollable growth of any [city] will eventually stop at some point and it will hinder the growth of other urban centres in the surrounding area, just like we observe in most areas around the capital,” he explains. “Before that happens, the government should work to expand other urban centres [by] using their own specific potentials.”
According to Abel, the unbalanced urbanisation problem emanates from the fact that the government did not have plans to expand cities along with their resources and potential. “In Addis Ababa, there is an overlapping of activities, since the city is serving as the country’s administration capital as well as its economic, trade and industrial, [educational, entertainment and technological] hub,” he argues. “[Something] should be done to distribute most of these activities to different urban centres in the country. For instance, a city with a high tourist attraction can grow utilising this specific potential.”
Although there is no single solution to the problem, Marta says the government has to distribute the economic resources and political power concentrated in Addis Ababa in order to lower the high rural urban migration rate, which contributes significantly to the problems plaguing the city.
Marta’s advice is justifiable when comparing the population growth rate and rural urban migration rate. According to the latest figures from the CSA, the population growth rate of Addis Ababa stood at 2.1Pct, while the rural urban migration rate reached 5.84Pct for last 15 years, which means roughly 756 people are added to the country’s urban population every day.
Teomezege says that these realities do not elude government officials and that they result from imbalanced policies that don’t address the different needs of the country’s urban and rural populations. “The government acknowledges that the problem is critical for development,” he explains. “It is the result of an inappropriate policy direction, in which the government duplicated the policy designed to address the problems of rural and urban areas.”
However, Teomezege says the government is working to address the problem by implementing appropriate policies and strategies. “The government plans to minimise the gap between Addis Ababa and the remaining major urban centres in the next ten years,” he says. “In order to achieve this, it is constructing industrial parks in almost all major cities so that people have the choice of migrating to those cities also.”
The research conducted by Farahmand supports Teomezege’s argument. His study notes that industrial policies have been the key factor for influencing urban concentration in certain Asian countries.
In Ethiopia, it is well known that industrialisation and its distribution are dominated by a few places that attract services and population, which in turn exacerbate the pattern of inequality between regions.
As a solution, the federal government is in the process of speeding up industrialisation and urbanisation throughout the country, according to Girma Damte, a senior public relations expert at the Ministry of Industry. To this end, the Industrial Parks Development Corporation recently announced that it is in the process of establishing industrial parks in major urban cities, including Mekelle, Hawassa Dire Dawa, Debre Brehan and Kombolcha, with the hope of attracting foreign and domestic investors that will engage in agro-processing and manufacturing activities.
Besides constructing industrial parks, the government says it will soon start a land registration process in 23 selected cities. Within the next five years, a total of 91 urban centres will be covered in order to make land available for private investors, especially those who want to engage in the manufacturing sector, according to the annual report of the MoUDC.
In addition to these factors, urban concentration will be influenced by policy and instrumental variables. “One of the factors that dwarfed the growth of urban centres all over the country is their limited financial resources,” argues Teomezege. “Addis Ababa utilises much of the tax revenue it collects, while others have little room in this respect. The Ministry is preparing a draft legal framework that will allow cities to use much of the revenue they collect to support their own growth.”
But for now, similar to many developing countries, Ethiopia is suffering from increasing urban primacy. In fact, the case of Ethiopia is more severe and to some extent unique because of the huge gap that exists between Addis Ababa and the next largest cities, such as Mekelle, Hawassa, Bahir Dar and Dire Dawa in terms of population size and economic potential.
On a national level, experts predict this type of intense urban primacy will hinder the development process, since most of the limited investments will continue to be directed towards Addis Ababa until the policies and strategies implemented by the government effectuate meaningful changes.
Teomezege, however, argues that it is not too late to reverse the situation. “I cannot see why we can’t achieve what we want if the government and the people work together towards the same goal.”
Marta echoes Teomezege’s sentiments. “With an integrated approach and commitment, the government can restore balance among urban cities,” she says. “However, it has to be clear to every Ethiopian that we are running out of time.” EBR

4th Year • January 16 2016 – February 15 2016 • No. 35


Leave a Reply

Your email address will not be published. Required fields are marked *

Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.

2Q69+2MM, Jomo Kenyatta St, Addis Ababa

Tsehay Messay Building

Contact Us

+251 961 41 41 41