An image of the country's flag.

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 outcomes in practice has been mixed and livelihoods of the poor and disadvantaged have sometimes been threatened.


Sustained agricultural growth is fundamental to Ethiopia‘s future. As analysts have pointed out, however, ―what to do about land and land tenure remains a sticking point which urgently needs to be tackled‖ (Gebreselassie, 2006). Donor organizations engaging with Ethiopia as it pursues its CAADP Compact and more detailed sector investment plans need to be sensitive to issues of property rights and resource governance issues that could, if left untended, disrupt the positive trends toward pro- poor economic growth and disenfranchise millions of Ethiopians.

  • Continue to support the various levels of government to design and implement measures that increase security of tenure for smallholder land-users while allowing them to consolidate, expand, or better manage their agricultural plots. Several areas of support would be relevant: further develop and harmonize the legal framework at federal and regional levels to strengthen property rights in land and natural resources; continue to support the formulation and implementation of appropriate land policies and legislation in pastoral areas and broadening of land use rights by removing restrictions on transfer of land use rights; support rights awareness campaigns to improve landholder understanding of the rights they hold; improve the capacities of land administration authorities to demarcate, register land and store and manage land records; certification initiatives that promote joint titling and other measures that establish a clear claim to land on issued certificates; exploring methodologies for documenting land rental markets and facilitating other ways of effecting land transfers; and promoting female participation in kebele Land Administration Committees. Donors, including USAID, might also usefully evaluate the outcomes of prior certification efforts supported to see where improvements might be made that would result in greater agricultural productivity and household incomes.
  • Support efforts to improve coordination among different institutions and levels of government with overlapping responsibility for administering tenure for specified resources. The need for coordination exists at multiple levels— coordinating the flow of land rights information between regional and federal levels, coordinating donor interventions to minimize conflicting demands on weak government capacity and to improve efficiency, and providing training and capacity building at all levels of government and private sector to help service delivery. Donors. including USAID, could assist with policy development and program coordination, development of management information systems, and training and capacity development.
  • Promote and support national and regional initiatives to strengthen and protect pastoralist use and access rights to both water and land resources. Greater transparency in the processes of leasing land to foreign investors is needed, especially where seasonal access to pastures and water by livestock owners are likely to be involved. Donors, including USAID, could help the Government of Ethiopia to set up such systems, using better GIS and communication tools. Donors should also continue to explore methods for establishing effective communal tenure over common-use properties, including pastures, water sources, and forested areas.
  • Provide support with decentralization and federal restructuring to improve resource governance. This could include devolving authority for forest management and expanding participatory forestry pilot programs, providing support to the Ministry of Mines and Energy and Regional Mining Bureaus to expand and strengthen mining permitting and monitoring systems and procedures, providing support to the Ministry of Water Resources to Integrated Water Resource Management initiatives, particularly those that expand and strengthen the participation of traditional water-user groups, and providing support for programs designed to strengthening local government and community capacity to manage conflicts, through training of mediators and provision of support for local institutions and community- government cooperation. Donors, including USAID, could assist with institutional change management, decentralization and devolution of authority, and programs and systems to improve transparency and participatory decision making on the use of natural resources.


Ethiopia is a large, ecologically diverse country with a rapidly growing population of more than 80 million people living in nine regions and two chartered cities (Addis Ababa and Dire Dawa). Following the defeat of the Derg regime that ruled the country from 1974 to 1991, the Federal Democratic Republic of Ethiopia was formed, with the regions largely defined on the basis of ethnicity or ―nationality.‖ Ethiopia‘s economy is heavily dependent on agriculture, with more than 80% of the population said to rely in whole or in part on the production of crops and livestock and more than 40% of GDP coming from that sector. Coffee and livestock dominate exports, and, although Ethiopia‘s floriculture sector has grown significantly in recent years, Ethiopia continues to run a negative trade balance. Ethiopia has no known economically viable oil or gas resources and, although its highland areas and rivers feed the Blue Nile as it flows north to Egypt, its use of this water for hydropower generation and irrigation is still limited, in part by the decades-old agreements with neighboring Sudan and Egypt. However, this has been changing in recent years. The Government of Ethiopia (GOE) in early 2011 announced that it is building the Millennium Dam on the Blue Nile that is capable of generating 5250 MW of electricity. Its plan is to boost power production from the current 2000 MW to 10,000 MW in the next 5 years. Similarly, GOE plans to increase irrigated acreage substantially as elaborated in Section 2.

Property rights have been a continuing source of controversy. Current property rules have evolved from the imperial period, which started in the mid-19th century and continued up to 1974. As the imperial regime expanded, it incorporated different approaches to land tenure, most based on usufruct that were in use in different areas of the country. In 1942, however, Emperor Haile Selassie returned from exile and established rules that led to the emergence of private property, a system that resulted in more powerful landlords and a deprived peasantry.

The 1975 overthrow of the Selassie regime by the Derg provided usufruct rights to large numbers of rural families while declaring all land to be the property of the state. Ethiopia‘s current tenure system reflects long-standing and competing historical themes, including feudal traditions and the effects of military rule to rectify feudal injustices. The prevailing constant, regardless of the form of governance, has been significant control by the state over the allocation and use of land. Continuing government resistance to private ownership of land is in part, a legacy of the injustices experienced under the feudal tenure system prior to 1974 (Crummey 2000).

The civil war that ended in 1991 with the defeat of the Derg reduced forced participation of farmers in agricultural collectives, but otherwise largely maintained the property rights regime. Debate has raged throughout the tenure of the Federal Democratic Republic regarding the appropriateness of this approach to property rights, with many arguing that the economic benefits of a more ―privatized‖ approach to property would encourage investment in productivity-enhancing technologies and infrastructure and would, therefore, be of benefit to the country and others arguing for the social equity associated with the current approach. As a result, the question of land policy is highly politicized and characterized by fundamental ideological differences and assumptions being put forward by these various stakeholders.

In recent years, the government has undertaken two programs to expand productive land use: resettlement and long-term leasing to investors. The resettlement initiative was launched in 2004 through administrative decisions taken by regional governments and was intended to encourage farm families from the crowded highlands of Amhara and Tigray regions to move into the lowlands along the Sudan border to reduce their food insecurity and to improve livelihoods. While it was, in principle, a voluntary program, this program echoed the forced replacement carried out during the Derg years, and attracted considerable criticism both from the international community and many within Ethiopia. The more recent initiative to make ―unused‖ land available on long-term leases to foreign investors has also been controversial. Leases to foreign investors have so far been granted for more than 600,000 hectares (or 1.4% of land suitable for rain-fed agriculture, according to the FAO). Chinese investors are moving into sesame production, and there is an Indian venture focused on tea, biofuel, sugarcane and cotton. The transparency of theses leases, the reports of evictions of current residents, and fears that these leases will drive future conflict are all concerns (IFAD 2009; Deininger 2011).