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Mr.Bereket Kebede

Assisted By:

Elias Kedir and Almaz Bekele


A rapid rate of urbanisation has become one of the distinctive features of economic development in the 20th century.  Even though there is some trend in highly developed countries towards de-urbanisation (people moving out to small towns and rural areas), in the developing world urbanisation seems to continue unabated. Between 1950 and 1976, the urban population in the developing world was growing by around 12 million per year; this number has increased to 60 million in the 1990s.  Projection to the year 2015 indicates that the world urban population will pass the 4 billion mark (Koch-Weser, 1996).  The increase in the number of people living in the urban centres of developing countries will also be accompanied with changes in composition of the population and types of economic activities.  The average age of people living in urban areas is expected to decline (changing the type of facilities required), urban population density will increase and the population will start spreading to secondary centres.  Patterns of economic activities are also expected to be significantly changed with accelerated globalisation and expansion of informal sectors (Koch-Weser, 1996).

The rapid rate of urbanisation is expected to overwhelm the availability of public resources, if it has not already done so.  For example, even though the proportion of city dwellers without water and sanitation dropped as a percentage of total urban population, the absolute number of people without adequate sanitation rose by 20 million between 1980 and 1990 in the developing countries (World Bank, 199?).  Deterioration in public services occurred at a time when developing countries are devoting between 2-5% of their GDP, which is not insubstantial, for the provision of urban services (World Bank, 199?).  These developments underscore the immensity of the problem on the one hand and on the other, the low level of efficiency in the provision of public services by governments and the corresponding important role the private sector can play.

In Ethiopia, the level of urbanisation is very low even compared to other developing countries; it averaged around 9.5% between 1970-75 and increased to 11.7% between 1980-85 (IMF, 1999) and was only 14.5% in 1998 (projection from Population and Housing Census of 1994).  The long run growth rate in urbanisation seems to slow down; the annual growth rate which was around 6% in the 1960s has now declined to around 3.5% (Mengistae, 1998).

The composition of the urban labour force is also changing.  Open unemployment is increasing; for instance, in Addis Ababa it was 18.5% in 1984 but increased to 30.9% in 1994. The share of the public sector from total employment in general and wage employment in particular is falling; in Addis Ababa it was 37.2% and 24.6% for 1984 and 1994 respectively.  In addition, self-employment (particularly in the informal sector) is high and increasing (see Mengistae, 1998).

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