USAID country Profile: Property Rights and Resource Governance: Ethiopia
Ethiopia's economy and the well-being of its more than 80 million citizens depend on the productivity of its natural resources, principally land and water that are used for production of crops and animals that provide more than 40% of Ethiopia's GDP. Governance of these resources is shared between the federal government and nine ethnically based regional governments. The decentralized approach to government further extends public sector oversight and involvement to district (woreda) and local (kebele) levels. Government programs continue to substitute for market incentives in many areas of the Ethiopian economy. This has resulted in strong regulation of individual property rights, development and investment patterns constrained by public financial and organizational capacity, and a close relationship with international donors that provide significant assistance resources. In many areas, successive attempts by central authorities to demonstrate and exercise control over tenure relations has disrupted the role of customary institutions in land administration and allocation. Given Ethiopia's history, there is continuing lack of clarity or assurance regarding the rights of peasants, pastoralists, women and others to manage, access, or use land, forest, water, and mineral resources upon which they depend for their livelihoods. Average farm sizes in Ethiopia are small with more than 85% of farming households operating less than 2 hectares and, in 2000, more than 40% having 0.5 hectares or less. Since the 1980s, Ethiopia has, been a major recipient of emergency food and cash assistance from the international community. Access to land is a critical issue for millions of farm households. Highly variable rainfall patterns have resulted in recurrent drought and crop/livestock loss, while in good years markets have been unable to absorb surplus production. Establishment of the Ethiopian Commodity Exchange is now helping to absorb this surplus by streamlining marketing and facilitating warehousing, financing and open price discovery via auction. Since 2005, Ethiopia has achieved strong rates of GDP growth, in part due to good weather conditions, and because of the significant attention government has dedicated to boosting agricultural productivity, exports, and rural investment through public investment in roads, irrigation, and market facilities. Certification of land use rights has been tested and expanded to millions of households nationwide generally with positive results, although critics believe that more must be done to enhance tenure security and stimulate greater economic investments at the local level. Further, the federal government has had success in attracting foreign investors to the agricultural sector. This success has been controversial as it touches on the core issues of property rights and resource governance that are important to so many Ethiopians. Long-term leasing of land and water resources to foreign investors has been criticized for having ignored the property rights of local communities, especially to pastureland and seasonal water sources. While such investment holds promise for increasing agricultural productivity, job creation, management knowhow and capital, achievement of these.