ILO/Sida Partnership on Employment Working Paper No. 3

An incomplete transformation: SDG 8, structural change, and full and productive employment in Ethiopia

Rapid economic social development has earned Ethiopia the epithet of an emerging success story. Major advancements have been made on key SDG indicators such as eradication of poverty, education and productive employment. Against this backdrop the present study explores the main challenges ahead. It concludes that the economic transformation must become more broad-based in order to sustain rapid economic development and creation of productive jobs. Economic diversification, horizontal and vertical economic integration and a more dynamic development of SMEs are key issues, along-side an agrarian transformation towards modern small-scale farming. Despite major investments in HRD, education has become an Achilles’ heel. Poverty and child labour are major obstacles to accessing education and bridging the rural-urban education gap has become a key challenge.

Some targeted interventions are also called for to make development inclusive. While the gender gap has been closed in education, it remains wide on the labour market and at work. The young generation are better educated and informed and have higher aspirations than their elders, but face severe difficulties in accessing productive employment. Enabling the young to fulfil their potentials is of paramount importance. The rapid development is also leaving some by the wayside. Amidst the general trend of upward mobility there is also a counter-trend of impoverishment of some vulnerable groups, requiring special attention.