By Lemma Merid (PhD)*

I visited Ethiopia for about a month between March and April, 2016. I stayed in Addis for most of the time except two weekend trips to Hawassa. The second trip to Hawassa was to attend the Ethiopian Economic Association’s Sixth SNNPR Regional Annual Conference which was held on March 26, 2016. The organizers were considerate to allow me to present a paper, which I accepted with gratitude. I returned from Addis on April 6 and would like to share two of my observations, among so many. These are (i) the widening gap in income and wealth, and (ii) the critical challenge of transportation in the city.

Widening Living Conditions

The living conditions of the poor and non-poor is widening fast. A class of “haves” and “have nots” has emerged. It is written on the walls of the high rise buildings and the living quarters of the wealthy.In 1991, when the EPRDF government took power, it came across equally-dwarfed – wealth-wise — city dwellers and rural people with more or less equal land sizes. Urban dwellers owned nothing but their homes, their old vehicles and a few household gadgets. Rural areas made more or less an equal living from the land granted to them through the land reform of 1974. The disparity between urban and rural income (and wealth) was narrowing. In the process, inequality was being minimized by compressing the living condition of the urban dwellers.

Urban and rural conditions and the disparity of income (and wealth) continued to deteriorate during EPRDF’s regime until 2004-5 despite changes in the economic orientation and the corresponding policies. The situation after 2005, however, has been radically different. Bear in mind that there is a name (owner) behind each building and those houses in the fanciest neighborhoods. The style and level of living has changed radically. Addis is dotted by restaurants that charge Birr 1000 for a dinner and they are jam-packed every day of the week. I am told that one would have to make a-month’s advance booking at some of these restaurants.

There are indeed legitimate as well as illegitimate causes for this wealth. Salaries and wages (and returns to labor) have risen, reflecting differences in skills, education, experiences, and attitude towards risk-taking (for those who are self-employed). The return to scarce resources, such as capital and land, has also risen. Ownership of a stock in one of the commercial banks garners a return of about 40-50 percent. Of great concern is that a large proportion of wealth that is amassed through illegitimate means. This is the most worrisome side. The net worth of a salary earner making Birr 20,000 a month since 2005 would only be Birr one million after making allowance for taxation, consumption expenditures, and a compound rate of interest in those savings. Most workers in government or private sector don’t make that kind of money. A professor at the University makes about Birr 7000 a month, about a third of the number I used. But the ownership of some government officials is said to reach billions of Birr. Where could this come from?

The Auditor General of Ethiopia in its 2007 Annual report to the Ethiopian Parliament, indicates that 78 government agencies have not accounted for Birr 2 billion of their expenses. To the best of the public’s knowledge, these agencies and the people behind them have not been taken to court so far. On the other side, The Federal Ethics and Anti-Corruption Commission reports that it has registered the asset of over 50,200 officials at Federal and State levels. But, no record has been made public so far. The logistics of making such massive data are indeed clear but the Commission could share the files of 10 or 20 percent of randomly selected respondents. This will help build the credibility of the Commission and would justify its usefulness to the public. Moreover, the public could furnish if there are assets that are unreported or held in the name of next of kin. This would help close at least part of the illegitimate sources of wealth.

The challenges of Intra-Urban Transportation in Addis Ababa

Since I did not have access to a car of my own, I depended on public transportation – the city’s Light train, taxis (the white and blue colored — Wiyiyit), the old red & yellow city buses as well as the “Higer” buses. Considering the congestion in traffic and the unpredictable driving practices, I would not have driven even if I had a car at my disposal or if I did, I would have been a cause for accidents. All four types of public transportation are usually congested and more so at rush hours.

One recent development in the urban transport scene is the introduction of the blue (and/or yellow) buses meant to serve public employees. This has helped ease the burden a bit although I am not a fan of the government being involved in a business sphere that should have been left to the private sector. I would have suggested expanding the private urban transport sector through credit/loan for the purchase of buses and strengthening the regulatory framework as well the scheduling of routes. The way things are now, it is a waste of public resources to see the buses stay idle in the middle of the city until the next rush hours.

Some serious thinking is required to find short- medium and long-term solutions to the situation. After my return to the States, I read that Ethiopia has signed a contract to build bus rapid transit (BRT) line ( The first 16 km stretch is expected to be competed in less than 3 years. It is also announced that based on Addis Ababa’s Master Plan, seven bus rapid transit lines will be built by 2030. It is further stated that the rapid buses will arrive at stations every 2-3 minutes and commuters need to wait for only 4-5 minutes. This is a welcome development if all that has been said is done. This however does not solve the immediate problem. Ethiopians in the country and in Diaspora should come up with ideas to address the problem of transportation in Addis Ababa. As a visitor who was in the country just for a few weeks. I want to float two ideas to ease the burden at least for the short-term; i.e. (i) staggering the time at which work is started at different agencies and (ii) encouraging more car pooling.

These proposals would need much more thorough study but here is how I see them work. First, different organization could be assigned to start work at 8 am, 9 am or 10 am and finish the day’s 8 hours of work at 4 pm, 5 pm or 6 pm. Evening schools will start at 6:30 pm. The second week, the agencies will be reshuffled so that those who started at 8 am would start at 10 am and so on. A similar reshuffle would be done the third week. At the end of the three cycles, the first sequence would be restarted the fourth week. This will create some confusion at the start but people would get accustomed to it gradually.

The second proposal is car pooling. This practice has been there for a long time as neighbors would pool to take their children to school as long as the children went to the same school or schools in close proximity. I think more could be done in this area. It is not uncommon to see one individual or a couple (husband and wife) driving alone. There is room for additional pooling among those who work in the same office or in the same general area. Taking out a few 100 or 1000 cars out of the traffic will reduce the congestion on the streets and on the public transport sector. This may require some incentives and encouragement by the Addis Ababa City Administration.

*Researcher and Educator; formerly an economist with the World Bank and UNDP;