“My salary isn’t enough to buy 25 kilos of teff,” says Asres Mekonnen, a 45-year-old mother of three and the sole breadwinner of her family of five.
Asres scrapes together a living through intermittent work as a dishwasher at Shalla 17/17 Park Restaurant, near Addis Ababa’s Atlas area in Bole, and by taking on occasional laundry jobs whenever she can. Her income, however, is precarious; stability—elusive.
“I can’t even say I have a stable salary because my work isn’t full-time—it’s seasonal,” she says. She earns 3,000 birr per month.
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Teff, the staple grain of Ethiopian households, has become prohibitively expensive for families like hers. Asres’s modest earnings cannot even buy a quarter of a quintal. Her grocery list is stripped down to essentials: onions, tomatoes, potatoes, pasta, and edible oil.
To stretch her limited income, she shops at the Fana Bole Consumers Cooperative Association, a government-subsidized market known locally as “Shemachoch.” Here, prices are marginally lower: tomatoes sell for 43 birr per kilo, carrots for 36 birr, avocados for 58 birr, potatoes for 40 birr, and bananas for 55 birr. In private markets, the same items cost significantly more: 65 birr for tomatoes, 45 birr for carrots, 80 birr for avocados, 55 birr for potatoes, and 65 birr for bananas, according to The Reporter Magazine’s observations.
The cooperative sources its products directly from farmers’ unions, cutting out brokers and helping keep prices lower.
Yet, even with these savings, Asres finds herself on the losing end of an unrelenting economic squeeze. She paints a bleak picture of her family’s struggles. “My youngest daughter is in fourth grade, another daughter failed grade 10, and my eldest works as a waiter by day while attending night school,” she says. “My husband is critically ill and unemployed. You can imagine the economic hardship we are enduring.”
Asres’s struggle is far from unique. Across Addis Ababa, lower-income families grapple with a relentless rise in prices that devours their earnings. Many households spend a disproportionate share of their income on food, transportation, and medicine, leaving them particularly vulnerable to price hikes.
“The price of everything has gone up, but my income hasn’t changed. We’re struggling to put food on the table,” says Meselech Amdie, a 61-year-old mother of five and a pensioner.
With a monthly pension of 3,113 birr, she has watched helplessly as inflation erodes its value. “Five liters of edible oil used to cost 1,000 birr. Now, it’s 1,400 birr in just two months,” she says, lamenting the unpredictability of the market.
Even Ethiopian civil servants are feeling the strain. A 42-year-old nurse at Tikur Anbessa Hospital, recalls when her 12,000-birr monthly salary covered private school tuition for her children and a relatively balanced diet. Today, she struggles to afford the basics.
“I had to pull my children out of private school and enroll them in a more affordable public institution. We’ve cut back on meat and dairy. Sometimes, we even skip meals,” she confesses.
Her family typically purchases 50 kilos of teff, which lasts just under a month. But soaring food prices have made even that a challenge. “Last month, I paid 6,000 birr for 50 kilos of teff—1,200 birr more than the month before,” she says. In 2023, a quintal of teff was 7,000 birr. Today, it’s more than double that, reaching 15,000 birr.
The rising cost of teff has forced her family to make painful sacrifices, cutting back on other essentials, like clothing. “I can’t remember the last time I bought new clothes,” she says.
Her story echoes those of many middle-income families. What was once a stable existence has now become a daily battle to adapt, sacrifice, and survive, as financial security slips through their fingers.
A report by the Ministry of Finance and the Civil Service Commission paints a stark picture of the country’s grim economic reality. Of Ethiopia’s 2.4 million civil servants, nearly half—1.1 million—nearly 48 percent—earn less than 6,000 birr per month, placing them below the extreme poverty threshold. A little over 945,000 government employees earn between 6,000 and 10,000 birr, placing them just below the poverty line. Only about 253,000 civil servants take home more than 10,000 birr monthly.
Meanwhile, the streets of Addis tell their own story. In bustling areas like Megenagna, 4 Kilo, 6 Kilo, and Bole, an increasing number of children, lactating mothers, and elderly individuals are seen begging for their next meal—a haunting signal that poverty is deepening at an alarming rate
Food security is often measured by caloric intake, a fundamental yet elusive benchmark for many Ethiopians. According to the World Food Programme (WFP), a person needs 2,100 calories per day to be considered food secure. WFP frequently employs this calorie threshold when assessing food security worldwide, taking into account factors like access to food and dietary diversity. This isn’t just about energy; it’s about a proper balance of proteins, fats, and carbohydrates, alongside essential vitamins and minerals. Yet for countless families, meeting this daily requirement has become a near-impossible challenge.
As the cost-of-living soars, even those once considered financially stable—like pensioners and middle-income earners—find themselves struggling to afford essentials. And they are not alone. Once-comfortable households are now caught in the grip of financial hardship.
Take Getachew Birhanu, a father of three working for an international NGO. With a seemingly robust salary of 110,000 birr per month, one might assume he is insulated from the economic turmoil. But reality tells a different story. Despite his six-figure salary, he says he is finding it increasingly difficult to maintain his family’s standard of living.
“Everything is skyrocketing—rent alone is 25,000 Birr, school fees eat up another 25,000 Birr, and the cost of basics keeps climbing—making life incredibly tough,” he said.
Even Ethiopia’s elite are voicing their concerns. In an interview with The Reporter Amharic, Haile Gebreselassie, the legendary long-distance runner turned entrepreneur, spoke candidly about the financial burden many Ethiopians now face.
“We are all mourning in silence, too ashamed to admit to one another how much life has beaten us,” he said. “Workers who once lived comfortably on a 15,000 birr salary are now struggling. Even those earning 40,000 birr find it hard to stay afloat due to skyrocketing school fees and other living costs.”
The crisis extends beyond individual struggles—it affects the nation as a whole.
A January 2025 report by Business Insider Africa ranked Ethiopia first among African nations with the highest cost of living. The cost-of-living index, which gauges the affordability of essentials such as food, housing, and healthcare, has soared dramatically. Families, once able to budget beyond survival, are now funneling every last cent into basic necessities, with no room for savings or even modest comforts.
Economists such as Elizabeth Warren and Amelia Warren Tyagi, in their book “The Two-Income Trap: Why Middle-Class Parents Are Going Broke,” discussed the ideal budgeting scheme for monthly household expenses. They recommend that households allocate 30 percent of their income for rent and 10-15 percent for food. While this formula may work in economies with stable income levels, Ethiopia’s economic reality presents a different challenge.
An economist who spoke to The Reporter Magazine explained that when the bulk of an individual’s earnings is consumed by rent, food, and basic expenses, it signals an economy where purchasing power is rapidly eroding.
“For instance, if a person earns 10,000 birr but cannot afford rent or a quintal of teff, it is a clear indicator of a high cost of living,” the economist noted.
When it come to inflation, Zimbabwe has long been known for its runaway inflation, and 2024 was no exception. Bloomberg reported that its annual inflation rate surged to 55 percent in March 2024, up from 47 percent in February. Similarly, Sudan, devastated by war, remains one of the most inflationary economies on the continent, with inflation soaring to 198 percent in November 2024.
In contrast, Ethiopia’s inflation rate currently stands at 19.9 percent, according to the National Bank of Ethiopia. On paper, this seems far better than Zimbabwe or Sudan. Yet, paradoxically, Ethiopia remains one of the most expensive countries to live in, where the cost of basic goods and services is crushingly high.
An economist who spoke to The Reporter explained this contradiction. “Although inflation in Sudan and Zimbabwe is higher than in Ethiopia, the average income and purchasing power in those countries might be relatively better.” He elaborated, “For instance, if someone earns 5,000 birr in Ethiopia, the cost of living would be significantly higher than in Sudan or Zimbabwe.”
He added, what matters is not how much you earn, but how much you can purchase with your income.
In Ethiopia, stagnant wages and soaring costs have left millions struggling. While other nations grapple with inflation, Ethiopia faces a deeper crisis: a widening gap between earnings and expenses, making survival an uphill battle.
Despite economic reform efforts, studies indicate that absolute poverty is on the rise. A policy brief released by the Ethiopian Economics Association in November 2024 revealed that between 2015/16 and 2021/22, absolute poverty notably increased in several regional states of Ethiopia, particularly in South Ethiopia, Somali, Oromia, and Amhara regions, as well as in Dire Dawa city. The rise in poverty was most pronounced in rural areas, where poverty rates jumped from 23 percent in 2015/16 to 33 percent in 2021/22—a sharp increase that underscores the growing vulnerability of rural communities. In contrast, the absolute poverty rate in Addis Ababa remained relatively stable, emphasizing the uneven distribution of economic growth and the stark rural-urban divide in poverty levels.
A joint study by Oxford University and the United Nations Development Program (UNDP) paints an even bleaker picture.
As of 2024, 72 percent of Ethiopians live in poverty, exacerbated by unemployment. The crisis is not just about low incomes; it is about deprivation on multiple fronts. Millions lack access to healthcare, education, and basic necessities.
Nearly 27 percent of Ethiopians experience nutritional scarcity and 68 percent lack access to clean cooking fuel. The report highlights that Ethiopia is among the five countries with the highest numbers of people living in poverty—86 million—alongside India (234 million), Pakistan (93 million), Nigeria (74 million), and the Democratic Republic of the Congo (66 million). These five nations account for nearly half (48 percent) of the global poor.
The economic distress is not just reflected in statistics but also in public sentiment.
A 2024 survey by Afrobarometer reveals a growing sense of economic despair among Ethiopians. Around 65 percent of respondents described the economic situation as “fairly bad” or “very bad,” a sharp increase from 44 percent in 2020. This sentiment aligns with a 64 percent increase in the number of individuals who believe economic conditions have worsened in the past year. However, there is a small glimmer of hope, with 42 percent of respondents believing the economy may improve in the coming year.
Apart from economic reforms and other prevalent economic factors, continued political fragility across different parts of the region remains a serious challenge to Ethiopia’s economy. Infrastructure destruction severely hinders access to essential services such as healthcare and education, thereby exacerbating multidimensional poverty. The Tigray conflict serves as a prime example of such devastating consequences.
Atlaw Alemu(PhD), an economics lecturer at Addis Ababa University, points out that ongoing conflicts are worsening the crisis by straining agricultural production and transportation networks. These supply-side challenges are further compounded by increased government spending, which injects more money into the economy, driving up demand while the supply of goods remains inadequate. Additionally, rising fuel prices are central to the increasing cost of goods and services across various sectors. “The shortage of foreign currency, despite the floating exchange rate, has led to higher fuel prices, which in turn affect the cost of many other products,” Atlaw explained.
However, the ruling Prosperity Party seems to see a different country than the one many citizens experience daily.
At its second Congress held in February 2025, Vice President Adem Farah remarked, “Over the past five years, while prioritizing economic growth, the party has also focused on enhancing education standards and successfully implementing initiatives in health and other sectors.” Adem, who also serves as Head of the Democracy System Building Coordination Center with the rank of Deputy Prime Minister, emphasized that these efforts demonstrate the party’s dedication to national development and improving Ethiopia’s standing on the global stage.
Atlaw stressed that stabilizing prices requires a peaceful nation and reduced transportation costs. He also advocates for adjustments in monetary policy, a focus on manufacturing exportable goods with lower logistics costs, and the establishment of sustainable agricultural systems.
The struggles of individuals like Asres, Meselech, and the nurse reflect a broader crisis facing millions of Ethiopians who are battling soaring costs of living. Without substantial policy changes, the situation is set to deteriorate further. The government, in collaboration with international partners, must urgently address the root causes of poverty, rising costs, and inequality. Above all, ending ongoing conflicts—which exacerbate economic hardship and claim countless lives—is paramount for any hope of a stable future. Only then can Ethiopia offer its citizens a life beyond mere survival.
