Ethiopia

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Situation and Priorities

Social protection situation

Ethiopia is the second most populated country in Sub-Saharan Africa, with an estimated population of about 112 million. Between 2011 and 2019, Ethiopia’s economy continued to grow rapidly, with an annual gross domestic product (GDP) growth rate of around 9 per cent. The national poverty rate decreased from 30 per cent in 2011 to 24 per cent in 2016. However, despite substantial progress in economic, social and human development over the past decade, Ethiopia, with an estimated per capita income of USD 790 in 2019, remains one of the poorest countries in the world. Vulnerability to poverty remains high, especially for those engaged in rain-fed agriculture and pastoralism. Subsistence agriculture which is subject to considerable environmental and climate risks such as recurrent drought, remains the main activity for most of the population.

Ethiopia’s Social Protection system is guided by the National Social Protection Policy (NSPP 2014) and the National Social Protection Strategy (NSPS 2016). The NSPP was enacted to serve as a framework to harmonize and standardize the implementation of social protection programmes in the country and guide the continuous development of the social protection system. The NSPP intends to address the gaps in terms of standards, coverage and accessibility, complementarities of programmes, effectiveness and efficiency of institutional arrangements, lack of data management and adequate monitoring and evaluation frameworks.  The objectives and focus areas of the NSPP do not embed a life-cycle approach, but rather continue promoting an approach organized by financing methods of social protection (contributory and tax-funded) or type of programmes or schemes (social assistance, social insurance, social services).

Therefore operationalisation of the NSPP includes tax-financed social assistance programs benefiting 8.7 million people and a school feeding programme addressing over 2.1 million children. There are also contributory social insurance schemes for public servants and employees of formal private organizations with about 4.2 million contributors. A nation-wide Community-Based Health Insurance (CBHI) scheme also covers 31.9 million beneficiaries mostly in the informal economy. Only 7.4 per cent of the total population of Ethiopia receives at least one social protection benefit compared to Africa’s average of 17 per cent. Social protection expenditure is estimated at 1.6% of GDP (ILO, WSPR 2020/22).

COVID-19 and other crises

The need to strengthen the Ethiopian government efforts towards a more system approach to social protection is more relevant and needed for the population of Ethiopia to cope with slower economic growth (estimated to fall at 3.8% in 2022, IMF), high inflation (estimated at 33.6% in 2022, IMF) and continued humanitarian crisis, amid tightened budget due to COVID-19 crisis and increase in imported fuel, food and fertilizer prices.

The government’s social protection (SP) responses to the effects of COVID-19 included a nationwide food distribution programme, waiving utility bills, and prohibiting evictions and lay-offs during the state of emergency. Nevertheless, the World Bank estimated that the employment rate dropped 3 percentage points from March to August 2020.

COVID-19 did highlight the gaps in Ethiopia’s SP system, which has no unemployment protection. Working with the ILO through the Wage Subsidy Project, the German Foreign Ministry of Economic Co-operation and Development (BMZ) has provided short-term wage subsidies for 45,000 workers in the garment sector. . The wage subsidy Project has achieved its objective of income Protection during COVID 19 for workers in the garment sector and ended on March 31, 2022. Ethiopia is also a priority country of the Call to Action in the Global Garment Industry, bringing brands and social partners together to catalyze short and medium-term actions to protect manufacturers and workers, including the development of sustainable SP systems.

Government and social partner priorities

The government still remains purposeful in developing a comprehensive social protection system underpinned by sustainable financing. To this effect, there is intention, in 2023, to review the NSPP with aim of strongly embedding a lifecycle approach thereby promoting the universal social protection.

Government priorities are therefore informed by the following:

  • Extend social assistance programmes, particularly the Urban PNSP, and improve their long-term sustainability. Domestic resources currently fund less than 15% of both the rural and urban PSNPs. The ILO, with the support of the European Union, are supporting the Government of Ethiopia to develop a financing strategy for social protection.
  • Expand health coverage: the CBHI is a relatively new scheme, aimed at extending health insurance to the informal economy. It is an initial stage of development and will require technical support.
  • Use social protection as a tool to increase the formalization of the workforce by progressively extending social insurance to the informal economy. The ILO, with the support of the European Union, has conducted a technical study on extending social protection coverage to workers in the informal economy. This study is being used to spur evidence informed policy dialogue , particularly with the Private Organization Employees’ Social Security Agency, POESSA. 

For the ILO engagements with the social partners, including the workers and employers’ organizations, is paramount in the promotion of social justice. Amongst other priority areas on workers’ rights, coverage extension to all workers, in the formal and informal economy remains priority for the Confederation of Ethiopian Trade Unions (CETU) and the Confederation of Ethiopian Employers' Federation (CEEF). 

Additionally, the Federation of Ethiopian Associations of Persons with Disabilities has been instrumental in driving the disability inclusion agenda in parallel to the strengthening of the social protection system.

ILO Projects and Programmes

Results

Over the course of 2016-2020, ILO support has included:

  • Building the capacity of 10 officials from the Ministry of Health and Social Affairs on social protection issues via an e-training by the ILO International Training Centre in Turin.
  • Supporting the revival of a social protection platform that facilitates the exchange of information and practices across different implementing institutions.

Please see the list below for a complete list of ILO contributions to social protection results in Ethiopia.

Funding gaps / Support the ILO

US$ 5,000,000

Coverage extension and formalization

Impact: N° of persons effectively covered (related SDG 1.3.1) - 100000

Support the ILO

Workspaces

ILO Experts

Serkalem Abebe
Project FAA
IMG
Pascal Annycke
Social Security Specialist
Elleni Haddis
Programme Manager