Urbanization Motif, COVID-19, and Economic Revival: Exploratory Research from Addis Ababa, Ethiopia

The COVID-19 pandemic had a significant shock to Ethiopia’s economy and society, particularly by paralyzing its urban centers and the mobility of its people. This chapter uses primary and secondary data to undertake an empirical examination of the cityscape urbanization process Addis Ababa, Ethiopia, faced in the first year of the outbreak. From an economic viewpoint, sub-city district differences are analyzed using the generalized method of moments estimator, the limited information maximum likelihood estimator, and an ordinary least squares regression model. These approaches show how elevated levels of urbanization during 2020 created a stagnation period throughout the city. This slump has worsened differently throughout the city over the past 2 years, resulting in significant problems in health services and tourism. These sectors have suffered greater losses when compared to the information and technology, entertainment, and internet-based industries. The findings indicate that Addis Abada’s city center recovered at a slower rate when compared to its outer sub-city districts. Besides the analysis from the control variables demonstrates that as actual cases increases by one unit, GDP per capital has a downbeat shock by 40.91% and communal spending has upbeat shock by 14.38%. The fundamental cause is that in places with higher urbanization rates, COVID-19 had a greater effect on personal resources and savings as well as communal services. On the other hand, in the sub-city districts many essential services and businesses remained open, i.e., for a longer period, during the first year of the pandemic. In the long term, these outer districts show signs of faster economic growth and appear to be more resilient in the post-pandemic period. From a policy perspective, this chapter examines how to improve Ethiopia’s urban economic resilience to reduce economic shocks, like COVID-19, with preparedness and proper mitigation strategies.