Microfinancing and poverty reduction in Ethiopia

Following the success of the Grameen Bank in Bangladesh, the importance of microfinancing for poverty reduction has gained momentum in the policy agenda of several countries. Despite the fact that results are inconclusive, a bulk of the literature indicates that microfinance could help the poor in many respects such as serving as a buffer against shocks and could work as an instrument of consumption smoothing. It could also help households to increase their income and assets; help them to increase consumption expenditure and develop savings habits. This study was conducted with the objective of investigating the impact of ACSI in Ethiopia taking a sample of 500 households from five different zones in the Amhara Region. Using descriptive statistics (such as Chi-Square, Paired T-test and ANOVA) and econometric analysis (Logistic Regression), the study has found out that the poor have smoothed their income in the study area. However, there was fungibility in the sense that clients were using the loan for unintended purposes. It was also observed that clients lack technical skills to engage in more profitable business activities. This may indicate that financial services alone could not be sufficient enough to raise the living conditions of the poor. Therefore, the current services of ACSI need to focus on business training skills apart from loan provision to help the poor move beyond day-to-day survival and plan for their future. In short, it is important that ACSI facilitates or directly involves in providing 'credit-plus' services to its clients

Rural livelihood portfolios and determinants of livelihood diversification among rural households in North-Western Ethiopia

In Ethiopia, over the past decades, researchers in the field of rural development have tended to agree that the number of poor people in rural areas of Ethiopia exceeds the capacity of agriculture to provide sustainable livelihood opportunities. Thus, despite the persistent image of Ethiopia as a country of subsistence farmers, over the past decades, there has been an outstanding tendency for rural economic diversification. Thus, the aim of this study is to characterize rural households’ livelihood portfolios and examine the major determinants of income diversification in the study area. The study employed a sequential embedded research design. To evaluate the level of household livelihood diversification, the Simpson Diversification Index (SDI) was used. Censured regression models were also employed to identify the major determinants of livelihood diversification. The findings of the study revealed that households in the study area depend on a variety of livelihood portfolios. Diversification into off-farm sources contributed 35% to total household income. The result also indicated that household livelihood diversification is significantly determined by household head educational status, access to training, age, family size, livestock ownership, land ownership, the proportion of infertile land, access to roads, and agro ecology at less than 5% probability level. As a result, the traditional sector-based approach should be broadened by adopting and implementing a local development strategy that includes both farm and non-farm activities

How do domestic policies affect the integration of Ethiopian fertiliser markets with world markets?

Frequent shifts in policy on fertiliser markets have occurred in Ethiopia with the aim of facilitating both physical and economic access of farmers to fertiliser. The last shift was the introduction of a monopoly on each stage of the supply chain in 2008. Furthermore, government control of prices and margins as well as stockholding programmes are also present on the markets. This paper evaluates the effect of these policies on the integration of domestic with world markets of fertiliser, using cointegration methods. Time series data of diammonium phosphate (DAP) and urea prices on world, import and retail markets between 1971 and 2012 are used. The findings show high transmission of price signals from world markets to import prices for both DAP and urea. However, between import and retail prices there is no evidence of cointegration for urea, while for DAP full price transmission is concluded. In the retail market, domestic transaction costs associated with storing large volumes of fertiliser act as a buffer between import and retail prices, especially for urea. Therefore, economic benefits could be achieved by reducing the size of stocks and revising the demand estimation process

Profiles of child labour: prevalence, activities, contexts, and children’s harm extent in Raya-Kobo and Angot Districts, Ethiopia

Abstract Using a mixed research design, the overall objective of this study is to investigate the profiles of child labour in Ethiopia’s districts of Raya-Kobo and Angot. The study’s specific objectives are to examine types of activities and prevalence of child labour, to identify the children’s working contexts, and to evaluate the extent of harm children face in workplaces. The study hypothesizes the existence of significant variations in the profiles of child labour (activity types, prevalence rates, settings, and level of harm to children) as a result of several circumstances. While survey methodology was used to collect primary data from 431 randomly selected respondents, desk review and document analysis were also used to gather secondary data. The sampling procedures used include multi-stage purposive and systematic random sampling. Descriptive and inferential (Ordered Probit Regression model) methods of data analysis are utilized to analyze the data. The results of the descriptive analysis demonstrate a high incidence and magnitude of child labour, as well as children’s early entry to work. The regression analysis reveals children’s exposure to high levels of harm at work, which is directly exacerbated by household age, income diversification, land fragmentation, livestock number, shocks, and the predicted value of remittances. Contrarily, access to rural transportation, household heads’ education level, cart ownership, and family size reduce children’s harm extent while working. The study highlights the need to design strategies for age-appropriate work to protect children from hazardous and high-intensity activities, undertake community awareness campaigns about the impact of child labour on children, and strengthen local stakeholders’ capacity. Additionally, connecting rural areas and farmers’ croplands to towns or major routes via repaired or new roads would be beneficial

Household dietary diversity across regions in Ethiopia: Evidence from Ethiopian socio-economic survey data.

BackgroundHousehold food and nutrition insecurity continued to be a development and policy agenda in Ethiopia. Assessing the patterns and determinants of household dietary diversity is an important area of research given its importance for policy uptake in the country. This study is, therefore, initiated to identify the dominant food groups consumed by households and to investigate the determinants of household dietary diversity in the country.MethodWe used data from the 4th wave of the Ethiopian socioeconomic survey. The survey data for this study included 3,115 households living in rural areas (hereafter called 'rural households'). Household Dietary Diversity Score (HDDS) was calculated and categorized as per the FAO's recommendation: low HDDS category for those who consume three or less food groups, medium HDDS for those who consume four to six, and high HDDS for those who consume seven and more food groups during the past seven days. Ordinal logistic regression model was employed to estimate the determinants of rural household's dietary diversity.ResultsCereals were the most dominant food group consumed by 96.4% of the households followed by pulses, which was consumed by 82% of the households Nutrition-dense food commodities such as lean meat, vegetables and fruits were the least consumed food groups by households in Ethiopia. In terms of determinants of dietary diversity, female headed households have 38% more chance of consuming diverse foods compared to their male-headed counterparts (AOR = 1.38, 95% CI: 1.10, 1.73). Household heads who completed secondary education and above have 62% more chance of consuming diverse foods compared to uneducated household heads (AOR = 1.62, 95% CI: 1.2, 2.30). Household heads who are single have 37% less chance of consuming diverse foods compared to those household heads who are married (AOR = 0.63, 95% CI: 0.50, 0.80). Those households located in Harari regional state and in the rural surroundings of Diredawa town have 6.56 times more chance of consuming diverse foods compared to those households living in Tigray and Amhara regional states (AOR = 6.56, 95% CI: 4.60, 9.37). The results also highlighted that households who are in the upper wealth category have 9 times more chance of consuming diverse foods compared to those households who are the lower wealth category (AOR = 8.54, 95% CI: 6.79, 11.98)

Results of the independent samples test.

BackgroundThe impact of Productive Safety Net Programs (PSNPs) on food security, poverty, and livelihoods has been examined in several studies. While some studies found positive impacts on food security and agricultural productivity, there are still gaps in understanding the long-term effects of these programs on poverty reduction and food security. This study aims to investigate the impact of PSNP on the livelihood of beneficiaries based on indicators including access to basic services, income, expenditure on food, adaptive capacity, and dietary diversity.MethodologyThis article used quasi-experimental design and treatment effects model taking into account access to basic services, income, food expenditure, assets, adaptive capacity, and household dietary diversity as outcome variables of interest. 300 respondents were randomly selected from the population of safety net beneficiaries and non-beneficiaries in the study area. Out of the 300 respondents, 150 were selected as the treatment group, who were beneficiaries of the safety net program. The algorithms used in analysis include regression adjustment, inverse probability weighing and propensity score matching.ResultsThe study’s results reveal that the PSNP has no statistically significant impact on access to basic services and income based on all three algorithms, yet it does show a significant and negative effect on food expenditure and assets. The coefficients across all three models consistently demonstrate this negative impact, underscoring its statistical significance at the conventional significance level (p = 0.05). This suggests that the PSNP leads to a reduction in food expenditure. Furthermore, the analysis highlights substantial differences between PSNP members and non-members across all three variables, with non-members having higher mean values for assets. This difference is statistically significant at the 1% level, suggesting that membership in the PSNP has a tangible impact on asset ownership. The study’s mixed findings emphasize the complexities of designing effective social protection programs that can adequately address the multifaceted nature of poverty.</div

Questionnaire with written consent.

BackgroundThe impact of Productive Safety Net Programs (PSNPs) on food security, poverty, and livelihoods has been examined in several studies. While some studies found positive impacts on food security and agricultural productivity, there are still gaps in understanding the long-term effects of these programs on poverty reduction and food security. This study aims to investigate the impact of PSNP on the livelihood of beneficiaries based on indicators including access to basic services, income, expenditure on food, adaptive capacity, and dietary diversity.MethodologyThis article used quasi-experimental design and treatment effects model taking into account access to basic services, income, food expenditure, assets, adaptive capacity, and household dietary diversity as outcome variables of interest. 300 respondents were randomly selected from the population of safety net beneficiaries and non-beneficiaries in the study area. Out of the 300 respondents, 150 were selected as the treatment group, who were beneficiaries of the safety net program. The algorithms used in analysis include regression adjustment, inverse probability weighing and propensity score matching.ResultsThe study’s results reveal that the PSNP has no statistically significant impact on access to basic services and income based on all three algorithms, yet it does show a significant and negative effect on food expenditure and assets. The coefficients across all three models consistently demonstrate this negative impact, underscoring its statistical significance at the conventional significance level (p = 0.05). This suggests that the PSNP leads to a reduction in food expenditure. Furthermore, the analysis highlights substantial differences between PSNP members and non-members across all three variables, with non-members having higher mean values for assets. This difference is statistically significant at the 1% level, suggesting that membership in the PSNP has a tangible impact on asset ownership. The study’s mixed findings emphasize the complexities of designing effective social protection programs that can adequately address the multifaceted nature of poverty.</div

Variable definition and measurement.

BackgroundThe impact of Productive Safety Net Programs (PSNPs) on food security, poverty, and livelihoods has been examined in several studies. While some studies found positive impacts on food security and agricultural productivity, there are still gaps in understanding the long-term effects of these programs on poverty reduction and food security. This study aims to investigate the impact of PSNP on the livelihood of beneficiaries based on indicators including access to basic services, income, expenditure on food, adaptive capacity, and dietary diversity.MethodologyThis article used quasi-experimental design and treatment effects model taking into account access to basic services, income, food expenditure, assets, adaptive capacity, and household dietary diversity as outcome variables of interest. 300 respondents were randomly selected from the population of safety net beneficiaries and non-beneficiaries in the study area. Out of the 300 respondents, 150 were selected as the treatment group, who were beneficiaries of the safety net program. The algorithms used in analysis include regression adjustment, inverse probability weighing and propensity score matching.ResultsThe study’s results reveal that the PSNP has no statistically significant impact on access to basic services and income based on all three algorithms, yet it does show a significant and negative effect on food expenditure and assets. The coefficients across all three models consistently demonstrate this negative impact, underscoring its statistical significance at the conventional significance level (p = 0.05). This suggests that the PSNP leads to a reduction in food expenditure. Furthermore, the analysis highlights substantial differences between PSNP members and non-members across all three variables, with non-members having higher mean values for assets. This difference is statistically significant at the 1% level, suggesting that membership in the PSNP has a tangible impact on asset ownership. The study’s mixed findings emphasize the complexities of designing effective social protection programs that can adequately address the multifaceted nature of poverty.</div

Total Factor Productivity of Major Crops in Southern Ethiopia: A Dis-Aggregated Analysis of the Growth Components

(1) Background: Even though agriculture is the backbone of the Ethiopian economy, the improvements made regarding crop productivity appeared insufficient and had slow progress. Several studies suggest possible ways to identify the challenges in the productivity of the crop sub-sector. Nevertheless, there are gaps in the empirical literature in both knowledge and methods. The current study intends to identify the factors that affect growth in the productivity of teff, maize, barley, wheat, and sorghum crops. (2) Methods: Cobb-Douglass stochastic production function is estimated using a panel data set of the Living Standard Measurement Survey. To address the objectives of the study, a parametric estimation with a time-varying decay model with deterministic and stochastic components was adopted. (3) Results and Discussion: The effect of inputs on aggregate output was positive and significant at the 1% significance level, implying the presence of economies of scale. Variation in the inefficiency term explained 46.4% of the total variance in the composed error term. The average productivity of major crops was 6.19 per year. This study implied that technical change in the production of major crops increased by 22% with better use of available technology. (4) Conclusions and Policy Implication: The findings pinpoint that farmers should focus on technical change and intensification of improved agricultural inputs

Descriptive statistics.

BackgroundThe impact of Productive Safety Net Programs (PSNPs) on food security, poverty, and livelihoods has been examined in several studies. While some studies found positive impacts on food security and agricultural productivity, there are still gaps in understanding the long-term effects of these programs on poverty reduction and food security. This study aims to investigate the impact of PSNP on the livelihood of beneficiaries based on indicators including access to basic services, income, expenditure on food, adaptive capacity, and dietary diversity.MethodologyThis article used quasi-experimental design and treatment effects model taking into account access to basic services, income, food expenditure, assets, adaptive capacity, and household dietary diversity as outcome variables of interest. 300 respondents were randomly selected from the population of safety net beneficiaries and non-beneficiaries in the study area. Out of the 300 respondents, 150 were selected as the treatment group, who were beneficiaries of the safety net program. The algorithms used in analysis include regression adjustment, inverse probability weighing and propensity score matching.ResultsThe study’s results reveal that the PSNP has no statistically significant impact on access to basic services and income based on all three algorithms, yet it does show a significant and negative effect on food expenditure and assets. The coefficients across all three models consistently demonstrate this negative impact, underscoring its statistical significance at the conventional significance level (p = 0.05). This suggests that the PSNP leads to a reduction in food expenditure. Furthermore, the analysis highlights substantial differences between PSNP members and non-members across all three variables, with non-members having higher mean values for assets. This difference is statistically significant at the 1% level, suggesting that membership in the PSNP has a tangible impact on asset ownership. The study’s mixed findings emphasize the complexities of designing effective social protection programs that can adequately address the multifaceted nature of poverty.</div