Countries like Ethiopia are placing rural areas at the centre of their national development efforts. With almost 80% of its total population residing in rural areas, and a similar share of employment in agriculture, Ethiopia has made rural development a priority in its development agenda. Starting in the mid-1990s, Ethiopia has implemented a series of reforms focusing on promoting agricultural development coupled with unprecedented public investment in pro-poor sectors. As a result, Ethiopia has achieved a two-digit economic growth rate and reduced rural poverty by half. However, as is the case of many countries in the region, Ethiopia is confronted today with a series of challenges that call for a revision of the existing policy framework for rural development.

Since the mid-1990s, Ethiopia has implemented a series of successful strategies to promote economic growth and social progress, and improve rural population well-being. These reforms have led Ethiopia to experience sustained growth between 2004 and 2018, with an average annual growth rate of gross domestic product (GDP) per capita of 7.4%, outperforming most sub-Saharan African countries. Moreover, large government investment has been directed at improving agricultural productivity, as well as addressing the multiple needs of rural populations. As a result, between 2000 and 2016, the share of rural population considered poor decreased from 45% to 25%.

The Rural Development Strategy Review (RDSR) of Ethiopia studies the rural-urban transformation process of the country, along with the evolution of rural development strategies, and identifies potential areas of reform. This overview summarises the main results and recommendations of the RDSR. It recognises the large and continuous efforts of the Government of Ethiopia (GoE) in promoting rural development and highlights the increasingly important roles of intermediary cities. Ethiopia’s socio‑economic landscape is fast changing, governed by three main transformations: economic, demographic and spatial. These transformations will bring both challenges and opportunities. However, the current framework for rural development, the Agricultural Development-Led Industrialisation (ADLI) strategy, may not be capable of fully addressing these challenges and reap on the benefits of rising opportunities. Thus, this report calls for a shift in paradigm, and updating of the current strategy, in order to maintain Ethiopia’s successful economic path and promote an inclusive rural-urban transformation.

Ethiopia has achieved sustained economic growth since early 2000s, which led to significant poverty reduction and an overall improvement in well-being in rural and urban areas. The growth was led by a series of structural reforms which started in mid-1990s, and promoted the Agricultural Development-Led Industrialisation (ADLI) strategy. Today Ethiopia’s socio-economic landscape is changing governed by three main trends: an economic, a demographic, and a spatial transformation. This chapter analyses the ways in which these changes are shaping Ethiopia’s rural-urban transformation. It highlights that these three transformations will have a significant impact in rural areas. Moreover, it also highlights that, although Ethiopia’s structural reforms have led to large improvements in rural and urban well-being, the poverty gap between the two territories is now widening. Addressing rural development will require strategies that account for these transformations, and consider the inherent linkages between rural and urban areas.

Ethiopia is urbanising at an unprecedented rate and intermediary cities are at the centre of its urbanisation process. The growth of Ethiopia’s intermediary cities can foster rural transformation and facilitate the development of a more balanced urban system. However, the potential for rural-urban transformation depends on creating strong reciprocal linkages. This chapter analyses a number of Ethiopian intermediary cities, and their roles in facilitating rural development. It highlights that Ethiopia’s intermediary cities serve as market hubs for rural goods, act as key destination for rural migrants, and provide employment opportunities. However, it is argued that some of the linkages between rural and urban areas remain weak, limiting the scope for rural-urban transformation. It calls for development of stronger knowledge base on Ethiopia’s intermediary cities and their roles for rural development, as well as better co-ordination between rural and urban policies in order to promote an inclusive rural transformation process.

Rural development is at the centre of Ethiopia’s national development agenda. Indeed, the Government of Ethiopia has put considerable efforts and resources in establishing an explicit rural development strategy, as well as launching a series of sectoral programmes targeting the multidimensional needs of rural areas. This chapter reviews the evolution of Ethiopia’s rural development policies since 1991. Moreover, given the growth in Ethiopia’s urbanisation, and its catalyst role for rural development, it also reviews the progression of Ethiopia’s urban policies and their interactions with rural policy. It highlights that, although national development plans are evolving and recognising the role of urban areas for structural transformation, rural and urban policies remain fragmented. It argues that fragmented policies can limit the scope for stronger rural‑urban linkages. Thus, the chapter calls for better co-ordination of urban and rural policies in order to reap the benefits of Ethiopia’s ongoing changes and facilitate rural-urban transformation.

Ethiopia is now at a critical moment of its rural-urban transformation process. Ethiopia’s fast changing socio-economic landscape brings a series of new challenges and opportunities. This chapter builds on the analysis of Ethiopia’s rural-urban transformation (Chapter 1), the role of intermediary cities for rural development (Chapter 2), and the evolution of rural policy (Chapter 3), as well as the extensive consultations held with key Ethiopian government representatives, academic and international experts. It highlights the need for a shift in paradigm towards rural development strategies and argues that the ADLI should be updated in order to effectively address Ethiopia’s future development challenges. To this end, four main areas of reform are proposed: a new approach to agricultural development; mobilising resources and scaling up investment to improve the well-being of rural populations; enhancing co-ordination between rural and urban policies; and complementing the existing policy framework with a territorial approach.