Ethiopia to take care of the urban poor with new welfare program

Mesle A

Strong economic performance by itself is not enough, as economists and development researchers emphasize. Unless growth is not accompanied by growing equity across income groups, the developmental achievements will be undermined.

According to Article 43 of the Constitution, Ethiopians have the right to improved living standards and to sustainable development. Ethiopia's development plans have been guided by the overarching objective of achieving: "to become a country where democratic rule, good-governance and social justice reign, upon the involvement and free will of its peoples, and once extricating itself from poverty to reach the level of a middle-income economy as of 2020-2023."

Ethiopia's development paradigm has been successful in that aspect. As several researches and reports confirmed Ethiopia’s growth has been successful in uplifting nearly 20 million people living under poverty in two decade. Ethiopia also achieved inclusive growth, in terms of social, economic, spatial, and relatively better political inclusion.

For example, from 2010 to 2013, more than $12.7 billion of government budget was allotted to pro-poor growth sectors such as education, agriculture, and food security, water and sanitation, health and roads amounted to. Similarly, the 2012/13 data shows, the budget for pro-poor sectors accounted for over 70% of the general government spending. This allocation and spending pattern demonstrates the government's commitment to eradicate poverty in all its characteristics.

Nonetheless, as the poor in large urban centers is significant, it is important to ensure the urban centers are adequately incorporated and that development programs are designed to address urban poverty reduction.

So far, the Productive Safety Net Program (PSNP), which is currently the major safety net program in Ethiopia, was exclusively focused on rural areas. Even though, there were urban focused social protection programs, they are inadequate in terms of scope, organization and implementation.

Therefore, a new program is being rolled out to address the poor in eleven major cities including Addis Ababa and the regional capitals. That is, the Urban Productive Safety Net Program (UPSNP). Ethiopia’s new social security program is aimed at providing a universal coverage for disadvantaged citizens. The unemployed will get help and job training while the disabled and the elderly get the necessary support. It is a new deal for the nation.

In the first phase, with a total budget of USD 300 million, the program will benefit over 1.2 million beneficiaries through a gradual role out plan throughout a five-year period. The program design estimates that each recipient will stay in the project for three years.

The objective of the Urban Productive Safety Net Project is to improve income of targeted poor households and establish urban safety net mechanisms. There are three components to the project, the first component being safety net support. This component will support the delivery of a predictable, timely, and productive safety net through conditional and unconditional safety net transfers. The project will ensure that various safety net principles such as primacy, adequacy, and predictability of transfer are respected.

The second component is the livelihood services. This component will support interventions that will facilitate graduation from the program and promote moving out of poverty. The target groups for these interventions are individuals in households receiving conditional transfers who desire more and higher-paid work. One individual per household can receive this support which will result in a total of 98,000 individuals eligible for this component. The individual will be selected by the household. The support will be implemented by the One Stop Center Directorate in the Urban Food Security and Job Creation Agency which established One Stop Centers in woredas/kebeles.

Finally, the third component is the institutional strengthening and project management. This component will support the development and strengthening of project systems for targeting, monitoring and evaluation (M&E) and MIS, payments, and citizens’ engagement (CE). It will also finance capacity building (human resource, training, administrative, and physical capacity) and strengthening program management (coordination, financial management (FM), procurement, and safeguards).

The program will provide help for those living below the national poverty line through conditional and unconditional safety net transfers. Conditional transfers will benefit able-bodied persons by engaging them in public works, training programs aimed at job or self-employment opportunities, and similar conditions. Unconditional transfers will benefit the chronically ill, the elderly and people with disabilities persons.

Moreover, the program document elaborates that: "The direct support transfers will be provided to extremely poor households among the poor that have no capacity to supply labor. Appropriate safety net transfer values, which provide meaningful impact on the welfare of beneficiaries based on a thorough analysis of the market situation, will be determined. The level of both conditional and unconditional transfers will be linked to the cost of a basic food basket in urban areas. The UPSNP will closely monitor urban food prices to ensure that purchasing power is maintained and adjustments are made as necessary....."

"Technical Assistance (TA) will be designed to increase the skills required to either: (i) secure and hold wage-employment or (ii) engage in productive self-employment. TA activities to support wage-employment may include: technical/vocational training, training in key behaviors required for success in the workplace (“soft skills” such as team work, basic workplace values, organizational ethics etc.), training and facilitation in accessing labor market information, and support in getting a job. TA activities to support self-employment may include customized training in business plans formulation, implementation and monitoring; continuous coaching and mentoring; financial literacy and awareness; community savings promotion and investment; and desired basic skills development aligned to the specific livelihood option chosen by the program clients."

In numerous regards, poverty is the breeding ground for political and social turmoil that can transform into an unmanageable change. Wide based development, albeit basically a financial issue, is likewise a definitive condition for peace, stability and national security. In that capacity, it strengthens the prospects for achieving monetary development goals. Notwithstanding guaranteeing that most of the populace profits by the improvement, a need thought for wide based development is that fundamental consideration given to the circumstance of individuals who are unable to benefit from the development process.

Indeed, taking care of the urban poor is not an auxiliary work but an integral part of Ethiopia's socio-economic stride and development paradigm. After all, Ethiopia's progressive paradigm dictates towards not living anyone behind. Besides solidarity and compassion, there are also economic and social benefits such a program provides. Its application will contribute immensely to political and social stability of the country.