Birhanu Haile AGEZEW & Gabor ERDEI
With about 135.9 million people (2025), Ethiopia is the second most populous nation in Africa after Nigeria, and one of the fastest-growing economies in the region, with a GDP growth rate of 9.2% growth in 2024/25. However, it also remains one of the poorest, with a per capita GDP of $ 979. Illiterate rate is still very high: 60.4%, only 16 countries behind Ethiopia on this list. Barriers such as poverty, rural isolation, underfunded schools, and political instability continue to constrain literacy development (https://www.iicba.unesco.org/en/ethiopia). HDI 180 in the world rank out of 193 countries. Ethiopia's HDI value for 2023 is 0,497, which puts the country in the Low human development category (HDRU 2025). Between 2000 and 2023, Ethiopia's HDI value changed from 0,293 to 0,497, a change of 69.6 percent.
In the period of 2000 and 2023, Ethiopia's life expectancy at birth changed by 16,4 years, expected years of schooling changed by 5,0 years and mean years of schooling changed by 0,9 years. Expected year of schooling is 9.2 years, yet the mean year of schooling is 2.3 years.
Ethiopia's GNI per capita changed by about 241.1 percent between 2000 and 2023. Considering all these positive aspects, the country is still in the low categories in many aspects of economic and social factors and indicators (UNESCO 2025).
Ethiopia's state-led development model improved infrastructure and living standards. Outcomes include expanding access to nearby potable water to 60 million more people, doubling electricity access, and a 64% increase in child vaccinations. Between 2004 and 2016, these advances helped reduce the poverty rate from 39% to 24%, but the model relied on overvalued currency, unsustainable debt, and regulations that limited private investment. The approach hurt competitiveness, fueled inflation, and drained resources. It did not boost productivity enough to transform the economy or provide jobs for 1.8 million new job seekers annually, and poverty increased from 27 to 32% (2016-2021) (UNESCO 2025).
Human capital levels have stayed low, and 70% of the workforce depends on agriculture. Global trade integration remains limited, and growing budget constraints reduced social and capital spending. Multiple crises (war in Ukraine, Tigray conflict, droughts, economic imbalances) led to a debt default in 2023. Living standards deteriorated further amid double-digit inflation, and the Tigray conflict displaced 3 million people, resulting in large humanitarian and reconstruction needs ($20 billion). About 15 million people are still reliant on food aid (BTI 2026).
The government embarked on comprehensive macroeconomic reform in July 2024, shifting to market-determined exchange rates, removing selected current account restrictions, and introducing a new interest-rate based monetary policy framework. Reforms are supported by IMF and World Bank financing, and G-20 debt relief. While the official and parallel exchange rate spread has narrowed from over 100%, it has persisted at around 15% with occasional spikes with remaining market inefficiencies, including surrender requirement on exporters incentivizing continued use of the parallel market. Ethiopia needs to sustain reforms to translate economic improvements into tangible benefits for people: higher earnings, more productive jobs, and better public services (BTI 2026).
This study examines the effectiveness of adult education, so we won’t go into detail about how adult education has developed and changed over the past decades. However, we should note that in the past decades, numerous domestic and international initiatives were launched for the purpose of adult education, aiming to strengthen Ethiopia's economic development and reflect in social changes. Such work was carried out by the World Bank or the DVV International office (DVV International 2024). The results related to these initiatives have been presented in numerous publications over the past period (Assefa, Y. et al. 2022). However, our work specifically examined the effectiveness of adult education.
In the context of dynamic technological environment, where it calls for adaptable work force, adult education programs have got an increasing demand as a strategy for expediting national development. In a broader sense, it is not merely a tool to address literacy and numeracy issues; it is rather an important strategy of acquiring knowledge, skills and competencies to function in day-to-day activities of citizens (Panagiotopoulos et al., 2018; UNESCO, 2016). It is evident that this sector of education, due to its functional orientation, has become a central to promote productivity particularly in emerging economies.
At global level, there is an increasing demand for functional adult education programs because of the dynamism of labor market structure. This implies that the importance of life long and continuous education programs are capitalized to stay fitted in the system of the labor market. As mentioned, due to the ever-changing labor market structure resulted because of technological advancements and requirements of the economy, one needs to stay updated in terms of knowledge and skills acquisition to remain competent and productive (ILO, 2019). Report from OECD showed that adult education programs are highly related to higher returns and earnings and stronger national development as these countries included adult education programs into their growth models (OECD, 2019). In a nutshell, adult education programs play tremendous role both in enhancing one’s own productivity, which simultaneously increases earnings and strengthens the development of human capital and economic growth, which consequently resulted in national development.
In developing nations, adult education programs have been associated with basic development goals like issues of illiteracy (mainly reading, writing and arithmetic), gender issues and poverty reduction strategies (UNESCO, 2019). The report by UNESCO further highlighted that adult education and learning are important for social, economic and political improvements. The World Bank (2020) also noted that the development of necessary skills among adults has significant importance in economic and structural transformation.
In the continent of sub-Saharan region, adult illiteracy remains one among the top challenges of socio-economic development endeavors. Substantial portion of the population remain unable to read, write and perform arithmetic. Despite the existence of slight variations from nation to nation, illiteracy rate remains lower than the global average, which is about 13 percent (UNESCO, 2025) and falls at around fifty percent in most nations (UNESCO, 2025; Mtandi, 2024; Stata, 2023) considering the fact on the ground, The African Union, in its agenda 2063, plaid attention to adult education and lifelong learning as one of the foundations to human capital development and societal transformation (African Union, 2015). The initiatives for lifelong learning and adult education programs in the continent in general and the sub-Saharan region in particular is needed to bridge the gaps in basic literacy, develop vocational and entrepreneurial skills, to better function in adults’ day to day activities and align with broader national development goals.
Ethiopia has been implementing a wide range of adult education initiatives in the forms of integrated functional adult literacy (IFAL) non-formal training to bridge illiteracy rates and improve livelihood and productivity among adult citizens who missed the opportunity to formal basic education (MoE, 2018). The implementation of adult education programs in the country contributed to improving the livelihood of several households in terms of enhancing agricultural productivity, easing adoption to agricultural tools, and reducing harmful traditional practices among others (Oljira & Hailu, 2021; Awgichew & Seyoum, 2017). Regardless, the program is suffering from structural and administrative challenges such as limited access, poor organizational structure, stakeholders’ hesitation, unclear curriculum, poor facilitators’ motivation, and unqualified trainers (Desalegn et.al, 2021; Negassa, 2019; Awgichew & Seyoum, 2017).
Even though, there is extensive body of research on the implementation, practice, status, challenges and livelihood outcomes of adult education programs in Ethiopia at micro level, for example (Olijira & Hailu, 2021; Desalegn et.al, 2021; Negassa, 2019), there is limited empirical studies on the relationship between adult education and economic growth and its link to the broader national development. Some studies like Belina (2022) assessed the contribution of integrated functional adult literacy for livelihood improvement using qualitative study. Despite it coming up with a foundational finding that adult education enhances livelihood and increases income, it lacks methodological rigor to draw a valid conclusion. Besides, as the study was conducted in specific areas of the country, it makes it difficult to capture a holistic image of IFAL and its contribution to socio-economic development at country level. These gaps, therefore, underline the importance of conducting research of macroeconomic analysis how adult education is linked to the broader national economic goals. Accordingly, this study addresses this research gaps by assessing the macro level analyses of adult education program in Ethiopia and its effect on economic growth.
As mentioned in the introduction section, there are several studies on adult education exploring its implementation, status and challenges for implementation in the existing body of literature. However, empirical studies that consider the measurable effect of adult education on economic growth in Ethiopia are scares. Considering bridging these gaps, this study formulates the following research questions.
What are the trends of enrolment, years of schooling and graduations of adult education and training program in relation to GDP growth?
What is the effect of adult education and training on GDP growth in Ethiopia?
As far as the relationship between education and development is concerned, there exist various theories and models that highlight the links between the two, specifically, with economic growth. Among others, human capital theory is among those theories that remain as a central framework for researching the relationships between education and development (Becker, 1964; Lucas, 1988; Romer, 1990). They conceptualized education as investment to improve productivity with the acquisitions and accumulations of important knowledge, skills and talents for growth. In this context, the notion of life-long and adult education has a tremendous stake in the accumulation of human capital that facilitates growth and development. Therefore, this research is based on the assumptions of human capital theory that specific educational variables like enrolment rates, graduation rates and years of schooling can be associated with economic growth measured by GDP per capita. Specific to the variables included, UNESCO (2019) in its report on its global report on adult learning and education revealed that enrolment and year of schooling have a quantitative advantage to increase human capital development, while turning into GDP growth heavily depends on the acquisitions of relevant skills and graduation quality of adult learners. Hence, this justifies the appropriateness of the inclusion of the variables into this empirical study.
Even though there are several research on the study of education-economic growth in general, direct empirical studies on the study of adult learning and economic growth are scares. Some of them affirm the importance of adult education programs in the accumulation of human capital, which in turn promotes growth and productivity (Aker et al., 2024; Stauvermann, 2018). The findings of individual studies from African countries on adult learning showed that it promotes livelihood practices, economic productivity and helps to manage other socio-economic problems (Davis et.al, 2012). They further noted that meaningful engagement in adult learning programs increases agricultural productivity and household income by more than 50 percent among farmers in east Africa.
Specific to the Ethiopian context, some few studies have been conducted in relation to the socioeconomic impact of integrated functional adult literacy program. A study by Todo & Takahashi (2011) showed functional adult literacy program increases adult’s biennial income by 60 to 160 USD at grassroot level. A national level evaluation study also reported a positive effect of integrated functional adult literacy program on the livelihood of adult participants of the program. Similarly, Olijira and Hailu (2021) reported that the program positively impacted socio-economic status of the participants. From the above premises, the program has a strong social and economic impact at micro level. However, some scholars doubt the effectiveness of the education program in addressing economic challenges at national level mentioning policy, practice and strategy gaps in implementing it. At national level, according to a policy document and a meta- analysis study, IFAL is constrained due to lack of resources, institutional capacity and poor cooperation among stakeholders, which hinder the micro level socio-economic gains into measurable economic indicators (Assefa et al., 2022; UNESCO, 2016).
This study employed longitudinal study to assess the relationship between adult education and economic growth in Ethiopia. A longitudinal is a study that repeatedly collects data over time to establish a cause-and-effect relationship between variables (Shah et al., 2023). It exclusively relied on the analysis time series data collected from 2011 to 2023 from different sources, mainly from WDI, 2024 and FDRE ministry of education annual statistical abstracts. it utilized both descriptive and inferential statistics in its analysis including means, St. Deviations and linear regression to observe any statistical significance on the effect of the explanatory variables on the dependent variable. In terms of variables, adult education enrolment rates 25+, graduation rates and years of schooling were used as explanatory variables, whereas GDPPC was used to measure economic growth.
Where:
Yt: Economic growth at time t measured by GDPPC
X1t: Adult education enrolment rate at time t
X2t: Graduation rate of adult learners
X3t: Population average years of schooling
c: The constant term
b1, b2, b3 are coefficients of each independent variable, and
et: Error
The model was estimated using ordinary least square (OLS) method, and level of significance was determined using p-values at 0.05 precision.
This part of the study mainly discusses the major findings of the analyses from the data. It mainly comprises two elements. In the first place, the summary statistics and graphical output of the trend analysis of each variable is discussed followed by the estimation of the effect of each variable on economic growth.
In figure 1, the enrolment and graduation trends of adult education program, which contextually called integrated functional adult literacy program, is presented. As to enrolment, the pattern clearly shows a fluctuating trend during the period covered. During the initial years, enrolment has increased at an increasing pace, which indicates a rapid growth of participation of adult in integrated functional adult literacy programs. The trend reached its peak during the years between 2014 to 2016, despite a slight downward sloping that was observed in 2015. A continuous downward shift was observed in the enrolment trend of the education program between the years 2017 to 2022. In 2023 there was a renewed upward shift of enrolment trends, which indicates a recovery of possible growth in adults’ education participation. Pertaining graduation rates, the pattern revealed the existence of steady trend, especially in the first 8 years between 2011 to 2017/18. In the years 2017/2018, graduation rate reached its highest point followed by a down trending pattern in the years 2020 and 2021. Afterwards, there seems to be a promising trend of growth in the graduation rates.
Figure 2 revealed the trend of GDP per capita growth spanning the years 2011 to 2023. The trend evidently indicated GDP per capita growth was fluctuating over those years between 3 to 8 percent annually. However, after the year 2021 onwards, there is a sustained growth on the GDP per capita per annum.
Figure 3 similarly shows the summary statistics of the variables included in the study, which revealed the mean, standard deviation, the minimum and maximum observations. Regarding GDP per capita growth, the dependent variable, the mean score (M=5.9, SD=1.659) shows, over the 13 years, the average growth of GDPPC was 5.9 percent with possible deviation of around 1.7 percent. On the other hand, the maximum value indicated that over the years, GDPPC ranged between 2.92 to 8.05. Regarding enrolment rate, the mean value (M=0.035, SD=0.019) shows the average adults participating in adult education programs accounts about 3.5 percent, which shows significant number of adults still do not access it. Likewise, the mean scores (M=0.49, SD=0.85) and (M=0.85, SD=0.128) for graduation rate and average years of schooling respectively depict that only 49 percent of the total enrolled adults reached graduation and completed successfully the training program. While the remaining 51 percent do not complete the training, which revealed the existence of higher dropouts arising from socioeconomic and political reasons.
Note: Dependent Variables: GDPPC * indicates statistical significance
The above figure shows the effect of adult education and training programs on GDP Growth. As can be seen clearly three explanatory variables, namely, enrolment rate, graduation rate and years of schooling were used to predict the effect of AEP on economic growth, measured by GDPPCG. The standardized coefficients (β=.158, p>0.05) for adult enrolments, (β=1.029, p<0.05) from adult graduation rate and (β=-.130, p>0.05) for years of schooling show that enrolment rate and years of schooling are not statistically significant, which reflects there is no strong evidence to conclude that these variables have effects on GDP growth. On the other hand, graduation rate has a strong statistical significance, meaning that it affects GDP growth.
The current study investigated the link between integrated functional adult literacy program and economic growth in Ethiopia. The study employed a multiple regression model to estimate the effect of the independent variables over the dependent variable. It revealed that enrolments and years of schooling were not statistically significant in predicting the relationship between adult education program and economic growth. On the other hand, graduation rates had a strong and statistically significant effect on economic growth. This relationship further means that adults who successfully complete their study program in the integrated functional adult literacy tend to be more productive than those who didn’t. it also shows that completion rate has more importance in converting the functional knowledge and practical skills acquired into their daily activities and eventually into meaningful socio-economic outcomes. All in all, it underlined the importance of improving the program efficiency and effectiveness, beyond a mere increase the participants to better support economic growth. Therefore, these findings may imply that policy initiatives should be in place to prioritize not only enrolments but also the program’s efficiency and effectiveness. Monitoring and evaluation should also be developed to make sure that adult learners complete the program courses successfully.
Even though the findings of the current study are informative, it is subject to numerous limitations arise due to several reasons. Initially, the estimation was based on thirteen years of data collected from secondary sources which may not fully provide long range casual relationships between adult education and economic growth. Secondly, even though it is proper to use the indicators as proxy to measure adult education, the data quality and availability in some cases may pose a challenge. Besides, it would have been worthwhile if a range of educational and economic related variables were included. Thirdly, the specified model and its estimation technique may not fully capture the casual relationships between the explanatory and response variables treated in the study. Therefore, one who reads this study needs to consider these limitations in interpreting the findings. The authors highly recommend further research using wide range of data and advanced econometric techniques.
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