Unemployment and Economic Growth in Ethiopia

By Abel Merawi

Ethiopia-UnemploymentAugust 5, 2020 (Ezega.com) -- Being poor is no joke, especially when poverty is a national reality. It ought to be taken seriously. Some naively imagine the poor as weak and lazy; as if people can escape poverty if they simply choose to work harder. Being poor is also a probability that constantly keeps the middle class on their toes. Just imagine how long it will take you before you fall into poverty if you lose your current job. When your income is barely enough to bounce from one month to the next and when you find it hard to meet ends meet, saving becomes a phantom. As poverty looms over most households, it is essential to examine the pressing economic issues that cause and exasperate it. This laborious task will be little addressed by me, who is not an economist. I merely wish to start up a dialogue based on my readings on economics and personal experience.

One of the pressing economic issues in Ethiopia has to do with unemployment. While unemployment is a national issue, the meaning is different for different people such as the educated, the skilled, the semi-skilled, and the uneducated or unskilled. In the case of the educated, it could be taken as the disillusionment of the graduates. Starting from kindergarten until graduation, students are told about how education is the path to a stable job and a steady income. But after graduation, the fresh and energetic educated people go through a sobering experience. As the constant search for a job becomes fruitless, along comes disillusionment in the form of unemployment. These graduates were ‘good citizens’ who played by the rules, so they may feel betrayed by the system. Most often, their parents have placed the hope of salvation in their children and invested everything. Being poor is, mostly, no fault of the educated. It is bound to happen when the job market and the curriculum are misaligned.  

As a nation, we have realized that it is currently impossible to employ every graduate. But instead of a meaningful solution, we came up with a trick one. Lo and behold, the graduates are told to be entrepreneurs! But how is it to be done? Can a person who learned to follow the rules and serve under the guidance of teachers or employers suddenly become an entrepreneur? Though a rhetorical question, the answer is No. When inventiveness and creativity are not only undeveloped but suppressed and substituted by ‘living by the book’ in the curriculum, we can’t blame the educated for lack of ingenuity. It is, thus, incumbent to integrate courses that promote entrepreneurship in the curriculum.  

The case of the skilled and semi-skilled is not entirely similar to that of the educated. This has more to do with the underdeveloped field of manufacturing and production industry in the country. Most of the products we import from foreign countries could have been produced domestically if the investment was directed in this direction. A 2018 study by community-based monitoring system (CBMS) International Network, showed that 80% of the labor force is engaged in subsistence farming. In other words, the production from farming is used as a means of survival rather than for commerce. The fact that 80% of the labor force is engaged in this unfruitful endeavor shows wastage of valuable human assets.

The fast population growth resulted in, according to CBMS, creating a population with two-thirds youth and more than half women. Among these young employable people, 35% are unemployed. Furthermore, among the working youth, 68% are unpaid family workers. According to scholars, population growth is not always negative, and can even become a valuable resource if used productively to boost the economy. If we take the case of India and China, we can see how a large population is an asset when engaged in various economic sectors. For instance, India has managed to educate its people and send them as scholars to various countries. In Ethiopia too, there are many Indian lecturers in most universities, and they are also employed as tech experts. As for China, increasing the playing field or creating a global market has helped it to productively engage the Chinese population. The influence of China in Africa is evident in the infrastructure and manufacturing industries across the continent. However, this is no easy task. It requires educating Ethiopian citizens in marketable areas that are demanded in global markets.

In a developing country like Ethiopia, even the uneducated and unskilled should normally find a job because there should be plenty of work demanded if we are to prosper as a nation. Sadly, our country has not fully undergone the industrial revolution as most economic sectors depend on uneducated or semi-skilled workers. Our country's heavy reliance on imports has contributed to unemployment. We still import dairy and crop products. This is ironic and absurd as 80% of the labor force is employed in farming. Modernization has not incorporated the Ethiopian farming industry; therefore, we still depend on cattle instead of tractors for plowing land. This has made it difficult to create food security. In the case of urban areas, investors are too busy constructing buildings and profiting from the rent. Unless more investment is made in the production, farming, and manufacturing industries, unemployment rises and national economic growth will be hampered.

In order to at least mitigate unemployment, more work is required at both the micro and macro levels. To make this a reality, we have two alternatives: privatization and public investment. Both come with the pros and cons. Privatization will encourage foreign investors and help in solving unemployment. But the aim of profit-driven corporations is not to solve the economic problem of the country. That is why public investment is a steadier and sustainable solution. As Dr. Cornel West argues, through public financing of education, health care, and other sectors, we can promote national industries that serve the public interest and also solve unemployment.

To make this a reality, policymakers must create a conducive and secure environment for investors. If investors fear being victims of corruption and property loss during riots, they will take their money elsewhere. It is important to consider unemployment as a symptom of the economic system rather than the cause. Thus, the steps we take to solve unemployment will also help to solve major economic issues.


Abel Merawi is Addis Ababa-based contributor for Ezega.com. He can be reached through this form.

Other articles by Abel Merawi:

The Underestimated Human Ignorance

Is America the Land of Freedom? (Part II)

Is America the Land of Freedom? (Part I)

Capitalism Becoming an Impediment to Morality

Ketman: Living in Disguise to Gain Acceptance

The System and the 'Criminal'

Trust as an Economic Force

Do You Trust the Government?

Our Online World

Fame Mistaken for Expertise

The Heavy Burden of Healthcare Workers

A Time to Reflect

The Plague by Albert Camus: Fiction Becomes Reality!

History of Pandemics in Ethiopia

Human Struggle Against Pandemics: Historical Perspective

Crisis Profiteers

You Can Make a Difference

Rule of Law for a Free Society


The Origins of Law

Determinants of Market Value: Part II

Determinants of Market Value: Part I

Your life Matters Too

Manifestations of Artistic Expression

Achievements vs Natural Accidents

The Grip of Sacrifice

Injustice is Never Justifiable

Education Demands of the Future

Job Security, Life and the Unpredictable Future

The Shift From Racism to Culturism

Sacrificing Meaning for Power?

Culture and Market Forces

Intersubjective Reality

Seeking Cosmic Justice

National Myths: Makers and Destroyers of Nations

Are We Truly Free?

Maturity: The Prerequisite to Freedom and Democracy

Loyalty to Truth, Not to Group

The Value of Work

The Flaws with Ethiopian Political System

Intellectuals and the People

Where Are Our Pathfinders?

The Allegory of the Cave and Its Lessons to Leaders

The Truth Behind Humanity

The Seven Virtues

The Seven Deadly Sins

What is the right thing to do?

Building National Identity

Adey Abeba and the Spirit of Change

Mob Violence

Living the Truth as a Human Being

Hubris - The Tragedy of Not Learning from Others

The Era of Group Mentality: Us vs Them

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