 In 2021, the expected total urban population is 22.

88 Million with 200 cities with the threshold of

20,000 inhabitants.

By the end of 2007, about 40% of the total urban population were dispersed in 912 small towns with
a size of less than 20,000 residents. The rest of the population was distributed in 85 cities with an
average of 84,100 inhabitants (Addis Ababa included) or 51,900 inhabitants (Addis Ababa excluded).
Addis Ababa comprised 38% of the 85 cities’ total population and was at the top of the urban
hierarchy. In 2021, based on the CSA (2013) projection, the total urban population is expected to
reach 22.88 million in 200 cities with the threshold of 20,000 inhabitants.

 Addis Ababa remained top of the urban hierarchy.

In both pre- and post-reform periods, Addis Ababa was the only urban center with millions of
inhabitants and remained firmly at the top of the urban hierarchy. It will continue to do so until
2037 and probably beyond. Addis Ababa is 11 times larger than the second largest city in 2014
(MoUDHC, 2015). The excessive primacy causes an overstretched provision of public services and
make the city deficient to serve the labor market. This is partly exhibited by the fact that residents
seeking employment and services are caught up by a weak public transport system, congested
traffic, poor sewer systems and waste disposal management.

 Private investors preferred to invest around Addis Ababa due to the better quality of service and
infrastructure.

many private investors have preferred to invest in or around Addis Ababa due to the relatively
better quality of service and infrastructure. In fact, about 64% of the firms in Ethiopia are based in
and around Addis Ababa (Oqubay, 2019) suggesting the political favoritism has been giving Addis
Ababa a cost advantage. This suggests that Addis Ababa will certainly continue to dominate the
other urban centers and be the hub of economic and political decisions of the country for the
foreseeable future. Strong metropolitan primacy in many cases is the spatial equivalent of inequality
of power, wealth, and status.

 Industrial parks, universities and the construction of stadiums are among the core economic
activities implemented based on political decisions

the current investments in industrial parks led by the government and economic growth corridors
are expected to bring remarkable growth rates in the economy. Ethiopia’s structural transformation
is very slow mainly due to the slow growth of the production sectors (like industrial sector and
agriculture) and rapid growth of the service sector, leading to inflationary processes. Rapid
urbanization with slow structural transformations is going to exacerbate the negative externalities
such as poor quality of education and health services; urban poverty; and weak public transport
services. Most cities in Ethiopia have low density but demonstrate urban sprawl (Gebre-Egziabiher
and Yemeru, 2019). This leads to inefficient mobility within the cities and affect the costs and rents
of residential and business properties (World Bank, 2019). A properly planned and managed
urbanization plays a crucial role in eradicating poverty and improving quality of life by providing
better education and health services and improved infrastructures with equitable access to all.