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How big is the hole? Suspension of USAID in Ethiopia

ethiopia usaidEthiopia is the largest recipient of USAID in sub-Saharan Africa. After receiving the money for 2023, Ethiopia has seen a suspension in the $1 billion in aid it receives. The funding cut has left the country in a vulnerable position, disrupting critical aspects of its healthcare system, including data management, medicine procurement, delivery, and workforce training and retention

Where the Suspension Has Hit Hardest?

The suspension of USAID funding has severely disrupted Ethiopia’s fight against diseases like malaria, HIV and tuberculosis. Around 5,000 health care workers lost their jobs, affecting vital services such as vaccinations, patient care and disease surveillance. The funding cut also threatens Ethiopia’s global “95-95-95” HIV treatment goals, with 503,000 people receiving care across 1,400 health facilities. Additionally, 10,000 data clerks responsible for managing HIV treatment have lost their jobs, further hindering the delivery and monitoring of care.

This could cripple efforts to combat HIV in the short to medium term, leaving many patients vulnerable. This has worsened the strain on the health care system, leaving it unable to provide basic services and hindering disease eradication efforts, deepening health poverty. 

With USAID support, Ethiopia launched a five-year health sector plan (HSTP-II) from 2020-2025 to improve health care. The plan aims to ensure quality, accessible health care, strengthen governance and leverage technology for reliable health data. A key challenge is the severe shortage of health care workers, with less than 100,000 staff members, far below the 445,000 necessary for universal health coverage. The plan’s success is crucial to expanding services and addressing this workforce gap.

The suspension of USAID funding has severely impacted Ethiopia’s HSTP-II, halting training programs and delaying the expansion of the health care workforce. Many NGOs have been hit hard by the suspension, including the Tesfa Social and Development Association (TSDA), which aids HIV patients with food, clothing and school supplies, according to The Guardian. The funding cut has crippled the organization, leaving those who depend on TSDA in even worse health and poverty. Staff layoffs and operational challenges have worsened the already dire situation for those relying on the organization’s support.

Solutions

The government has tried to enhance its support for local NGOs by trying to empower them by simplifying regulatory frameworks, in the hope this will enhance the operational efficiency and sustainability of NGO’s despite the budget constraints they are now facing. Following the advice of the Ethiopian Civil Society Organisation Authority, NGOs that did not rely on USAID funding are forming alliances with other local NGOs, enabling them to share resources, have joint fundraising efforts, and increase advocacy for policy changes to support the nonprofit sector during this challenging period.

NGOs such as the Mekedonia Humanitarian Association focus on supporting the critically disabled, elderly and mentally ill by providing housing, clothes and other vital amenities. Another organization is the Ethiopian Human Rights Council, which focuses on providing legal aid and investigating human rights abuses. These have turned out to be important practices for non-USAID-funded NGOs as it has provided support for these NGOs to allow them to continue their work during the period of the suspension.

Conclusion

The suspension of USAID has left Ethiopia’s health care system in an unprecedented crisis, affecting disease eradication efforts, health care workforce expansion and the operations of vital NGOs. The abrupt withdrawal of $1 billion in aid has crippled essential programs, forced widespread layoffs and disrupted Ethiopia’s ability to meet global health commitments. The impact on HSTP-II and organizations like the Tesfa Social and Development Association underscores how deeply intertwined USAID funding was with Ethiopia’s healthcare infrastructure.

Efforts to diversify funding streams, improve private sector involvement and empower local NGOs mark a shift towards long-term self-sufficiency, though the short-term outlook remains dire. Ultimately, while Ethiopia is making strides to mitigate the crisis, the loss of USAID has left an undeniable mark on its healthcare system. Whether the government’s measures will be enough to compensate for the loss of funding remains uncertain, but one thing is clear: The suspension has deepened Ethiopia’s health crisis, and the road to recovery will be long and arduous.

– Oliver Hedges

Oliver is based in Lancaster, UK and focuses on Global Health for The Borgen Project.

Photo: Flickr

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Initiatives Ensuring Access to Clean Water in Ethiopia

Clean Water in EthiopiaEthiopia faces a significant water crisis, with roughly 60 million of its 126 million citizens lacking access to safe drinking water. This issue is compounded by surface water pollution, resulting from the country’s rapid population growth, urbanization and inadequate waste management. However, several nongovernmental organizations (NGOs) and government agencies have implemented initiatives to ensure access to clean water in Ethiopia.

WaterAid’s Deliver Life Project

WaterAid works from a bottom-up approach to alleviate water contamination in Ethiopia through the “Deliver Life” project. WaterAid has shared this project with 128,259 people from 177 communities to help relieve water contamination and related illnesses. This initiative focuses on tackling dirty water, creating sanitary toilets and teaching good hygiene practices.

WaterAid’s project successfully provided 10 Ethiopian schools access and resources to address water contamination. This was achieved through the distribution of water points, water supply systems, gender-separated toilets and teachings on hygiene and menstrual hygiene. WaterAid also taught eight small businesses how to manage liquid and solid waste. Furthermore, they provided waste vehicles to help reduce the likelihood of water contamination from poor sanitation.

UNICEF and ONEWASH

The United Nations Children’s Fund (UNICEF) works with the Ethiopian government on the ONEWASH National Programme, a widespread national appeal to follow water, sanitation and hygiene (WASH). This collaboration targets water contamination by producing specific fecal and chemical contamination standards, sharing resources on hygiene practices and building water systems that prioritize cleanliness.

UNICEF and ONEWASH help prevent water contamination by improving hygiene standards and water cleanliness, reducing water-related disease and infection.

Water4Ethiopia

Water4Ethiopia fundraises to supply clean water sites in Ethiopia. Following funding, volunteers work with nonprofit organizations to find a clean-water site. The nonprofit organizations oversee the building and construction of springs or wells and ensure that local people are involved in the process from start to finish.

The wells and springs ensure that the local community has continuous access to clean water despite infectious diseases in the area. Water4Ethiopia has benefited more than 5,000 people to date.

City-Wide Inclusive Sanitation

The City-Wide Inclusive Sanitation (CWIS) project in Ethiopia strives to address water contamination and improve sanitation in four towns in Ethiopia: Sheno, Welenchiti, Maksegnit and Kebridehar. This approach ensures that all locals, even those from low-income backgrounds within these towns, can get clean water.

This is achieved through initiatives that tailor solutions to specific areas, such as analyzing which technologies will improve certain areas. For example, in smaller, rural settlements, CWIS implements on-site sanitation, whereas in cities, CWIS provides sewers. This program ensures that clean water is accessible for everyone, regardless of background, helping to reduce water contamination by improving access to a clean, fresh supply.

Rainwater Harvesting

The Ethiopian Ministry of Water and Energy has developed a method for collecting clean water using rainwater. Ethiopia’s lack of sanitary water sources means many people turn to ponds or rivers. These sources are often contaminated and cause illness. The rainwater harvesting approach is active nationally, reaching nearly 70% of the population.

It utilizes roof water, which is generally of decent to good quality, making it potable and much less likely to cause disease or illness than water from rift valleys. Approximately 4 million people now have access to clean water through rainwater harvesting. This brings the total number of Ethiopians with access to clean drinking water to just less than 75 million.

Conclusion

Ethiopia’s ongoing battle against water contamination is being addressed through various initiatives that improve access to clean water, sanitation, and hygiene education. Indeed, projects like WaterAid’s Deliver Life, UNICEF’s ONEWASH, and rainwater harvesting have benefited millions. Sustained efforts and collaboration will be essential in expanding these successes and ensuring safe water for all Ethiopians.

– Ella Dorman

Ella is based in Worcestershire, UK and focuses on Global Health for The Borgen Project.

Photo: Flickr

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Gender Wage Gap in Ethiopia

Gender Wage Gap in EthiopiaEthiopia, like many other countries across the world, faces a gender wage gap despite many measures being taken when it comes to economic growth and gender equality measures. The gender wage gap is the disparity in pay between men and women. It reflects systemic inequalities in opportunity and representation.

Root Causes of Ethiopia’s Gender Wage Gap

The gender wage gap in Ethiopia stems from women being concentrated in low-paying informal sectors and traditional societal norms that undervalue their economic contributions. These roles lack stability and benefits, leaving women with limited income and fewer opportunities to build financial security. Cultural expectations exacerbate the problem and reinforce a cycle where unpaid domestic labor and caregiving take more importance over professional development for women. Ethiopia’s gender gap reflects structural inequalities that restrict women’s participation and potential. Women face barriers such as limited education and norms in society, which undervalue their contributions.

Women in Ethiopia also face many challenges when accessing loans and financial services due to limited financial literacy.  The 2024 article: “Transforming the Lives of Women and Girls in Eastern and Southern Africa” states that women have “lower access to productive resources.” Overall, Ethiopian women have less access to vocational and training programs important for securing employment in higher-paying sectors like construction and technology. Current training programs fail to accommodate women’s dual work and caregiving responsibilities, which excludes them further.

Government and Organizational Efforts

The Ethiopian government is aware of the gender pay gap. Therefore, the government has been taking correct measures to help reduce gender inequality. According to the United Nations Development Programme (UNDP), a Gender Equality Strategy (GES) has been developed to “guide the country office on mainstreaming gender equality and women empowerment.” This gender strategy identifies priority areas and supports national efforts to get results. The government plans to build upon previous strategies to add to the policies the country already has in place. Current efforts to promote women’s education, access to credit and representation in decision-making are underway but require scaling up to achieve maximum impact. Local organizations and networks have also made many efforts to decrease the gender pay gap in Ethiopia. 

The Ethiopian Women Lawyers Association (EWLA) is one organization that is doing fantastic work. EWLA is a nonprofit organization founded by a group of Ethiopian female lawyers to promote Ethiopian women’s legal, economic, social and political rights. EWLA has provided legal assistance to more than 200,000 women (2023). More than five million women have benefitted from EWLA collaborative efforts until 2020.  EWLA has also been important in revising Ethiopian laws, such as family law and criminal codes, to align with women’s rights. The organization has also lobbied for gender-sensitive policies at governmental levels​. Furthermore, the organization works with grassroots Civil Society Organizations (CSOs) to address challenges such as gender-based violence, particularly in regions like Amhara and Afar​. EWLA’s priorities include finding sustainable funding and strengthening partnerships with other women’s organizations in the country. 

Opportunities for Improvement

The gender wage gap in Ethiopia reflects the gender wage gap across Africa. Factors such as cultural norms, education gaps and smaller economies play significant roles. However, reducing Ethiopia’s gender wage gap requires a multi-faceted approach. Expanding access to girls’ education can help break cycles of poverty and inequality.  Additionally, engaging communities to challenge stereotypes and fostering inclusive training programs can help women balance work and caregiving responsibilities. By implementing these strategies and building upon existing efforts, Ethiopia could make significant progress toward closing the gender wage gap and fostering economic growth.

– Ayat Aslam

Ayat is based in London, UK and focuses on Good News and Global Health for The Borgen Project.

Photo: Flickr

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Fight Against Malaria in Ethiopia

Malaria in EthiopiaEthiopia is still amid its long-lasting battle against malaria, which is one of its most persistent challenges. As of October 2024, Ethiopia has faced more than 7 million cases of malaria. Additionally, the country has dealt with more than 1,000 malaria-related deaths this year alone, indicating that the disease currently shows little sign of slowing down.

Causes

Malaria, a disease caused by the Plasmodium parasite, has historically been a significant threat to Ethiopia. One notable example is the devastating 1958 epidemic, which affected 3 million people in a 100,000-square-mile radius and resulted in an estimated 150,000 deaths. Ethiopia’s battle against malaria is deeply rooted in its geographic and climatic conditions. The severity of the 1958 epidemic was partly attributed to the harsh natural conditions of the area where the outbreak occurred, where the altitude range was estimated to be between 1,600 and 2,150 meters above sea level.

The country’s varied landscapes, from lowland plains to highland areas, create ideal environments for the Anopheles mosquito, which carries the malaria parasite, to thrive. Seasonal rains, especially in the western and southern regions, such as in and around the Gambella National Park, help mosquitoes breed, leading to spikes in malaria cases. Varying climatic conditions have made weather patterns less predictable, making it even harder to control the spread of the disease.

Combating Malaria in Ethiopia

Efforts to combat malaria in Ethiopia have evolved over the decades. The country has implemented various strategies, including widespread distribution of insecticide-treated bed nets (ITNs). Further measures include indoor residual spraying (IRS) and access to effective antimalarial drugs. Community health programs, such as the Health Extension Program, have played a crucial role in improving early diagnosis and treatment in rural areas.

Despite these efforts, gaps remain in reaching the most vulnerable populations, particularly in remote regions with limited health care infrastructure, such as the Benishangul-Gumuz state in northwest Ethiopia. Additional challenges are posed following the rise of insecticide resistance among mosquito populations and the potential for drug-resistant malaria strains. This underscores the need for sustained investment in research, developing new tools such as next-generation antimalarials and vaccines and adapting strategies to local contexts.

Ethiopia’s partnership with international organizations like the World Health Organization (WHO) and the Global Fund has been vital. However, the scale of the problem demands a coordinated and persistent effort from local and global stakeholders.

Final Remark

Addressing the socioeconomic factors contributing to malaria transmission in Ethiopia is equally essential. Poverty, inadequate housing and limited access to clean water and sanitation exacerbate the spread of the disease. Strengthening health systems, enhancing community awareness and promoting economic development are essential components of Ethiopia’s comprehensive approach to malaria elimination.

Maintaining a strong fight level for Ethiopia is paramount, as malaria looks like it will be around for a while. The disease is a health issue and a developmental challenge affecting education, economic productivity and overall well-being. By intensifying its efforts and leveraging innovations in public health, Ethiopia can move closer to a future free from the devastating impact of malaria.

– Joe Lockett

Joe is based in the Wirral, UK and focuses on Global Health for The Borgen Project.

Photo: Flickr

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Hunger in Ethiopia: Everything You Need to Know

Hunger in EthiopiaAccording to the World Food Programme (WFP), a staggering 55% of all children younger than 5 in Ethiopia suffer from hunger, highlighting the severe nutritional crisis facing the nation. In 2024, approximately 15.8 million people in Ethiopia required food support due to a complex interplay of factors such as rampant inflation, ongoing conflicts, severe droughts and the spread of diseases.

Ethiopia is currently grappling with one of the worst droughts in recent history, leading to widespread starvation and devastating consequences for vulnerable populations. The drought has destroyed crops and livestock, further exacerbating food shortages and pushing families into dire circumstances.

Many Ethiopians are also suffering from various diseases, with children particularly affected by hydrocephalus, a serious condition characterized by swelling of the brain due to the accumulation of spinal fluid. This condition can often be linked to malnutrition during pregnancy, underscoring the intergenerational impacts of food insecurity.

The Impacts of Conflict and Drought in Ethiopia

Conflict, drought and decreasing food support are endangering the lives of millions of Ethiopians and driving inflation to unprecedented levels in the region. While inflation in the U.S. and conflicts elsewhere contribute to the crisis, the situation is complex, with smaller issues, such as the availability of fuel for supply trucks delivering food and medicine, playing a critical role.

The disruption of supply chains due to fuel shortages has led to delays in delivering vital humanitarian assistance to affected communities. These delays have further strained the already limited resources available to those in need. Moreover, ongoing conflicts in various regions of the country have hindered access to agricultural land, preventing farmers from cultivating crops and worsening food scarcity.

Humanitarian needs in Ethiopia have tripled since 2015 and the country is experiencing its worst drought in decades, often described as the worst in a generation. This drought affects 8.1 million people, including approximately 2.5 million children, leading to water scarcity, food insecurity and severe disruptions in livelihoods. The consequences include rising food prices, increased malnutrition rates among children and the displacement of millions.

In southern and southeastern Ethiopia, an estimated 7.4 million people wake up hungry each day as the country grapples with its fourth consecutive failed rainy season. Drought, compounded by regional conflict, remains a significant challenge. These alarming statistics and health issues reflect the urgent need for comprehensive interventions to address not only immediate food needs but also the underlying causes of hunger and health disparities in Ethiopia.

What Is Being Done

Several organizations, including the United States Agency for International Development (USAID), are actively supporting Ethiopia through humanitarian assistance. In 2022, USAID announced $488 million to address various critical needs, including:

  • Emergency food assistance
  • Life-saving nutrition to treat malnourished children
  • Support for farmers to prevent livestock and crop loss
  • Aid for vulnerable populations
  • Assistance for farmers and agribusiness to build resilience
  • Provision of safe drinking water and emergency health care to mitigate disease exacerbated by hunger
  • Protection for women and children to prevent gender-based violence.

Summary

Ethiopia is facing a critical crisis as conflict, drought and hunger threaten millions of lives. However, several nonprofit organizations, such as USAID, are actively assisting the country in addressing these issues through humanitarian aid. With sustained support from both local and international organizations, Ethiopia has the potential to overcome these challenges and work toward a more stable future.

– Anthony Burt

Anthony is based in Kansas, USA and focuses on Technology and Politics for The Borgen Project.

Photo: Flickr

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Tourism in Ethiopia: A Promising Path to Poverty Alleviation

Tourism in Ethiopia: A Promising Path to Poverty Alleviation Ethiopia, often called the “Cradle of Humanity,” is rich in cultural heritage, historic landmarks and diverse natural landscapes. From the majestic Simien Mountains to the ancient rock-hewn churches of Lalibela, the country holds immense potential for tourism, which has grown steadily over the years. However, beyond its economic benefits, Ethiopia is actively exploring tourism as a powerful tool to alleviate poverty.

The Role of Tourism in Ethiopia’s Economy

Tourism in Ethiopia has made significant strides, contributing more than 6% to the nation’s Gross Domestic Product (GDP). The sector directly and indirectly employs more than two million Ethiopians, a number that continues to rise as the country attracts more international visitors. Ethiopia experienced a 48% increase in tourism over the past decade due to government efforts to improve infrastructure and market the country as a top destination.

The growth of the tourism sector is especially crucial in rural Ethiopia, where poverty is more pronounced. Tourism is seen as a pathway to economic diversification, providing new income opportunities, especially for women and youth, through job creation in hospitality, guiding, transport services and artisanal handicrafts. But for tourism to effectively reduce poverty, the benefits must flow to the poorest and most vulnerable members of society.

Government Policies

Recognizing the sector’s potential, the Ethiopian government has put in place several policies to align tourism with national poverty alleviation goals. The Growth and Transformation Plan (GTP)  identifies tourism as a key sector in driving economic growth and employment. It encourages investment in rural areas to spread the economic benefits beyond major cities like Addis Ababa. Infrastructure improvements, such as road networks and airports, are also part of the strategy to open up remote areas to tourists, helping locals benefit from tourism revenues.

Another important policy is the Sustainable Tourism Master Plan (STMP), which aims to develop sustainable, eco-friendly tourism that benefits local communities. The plan emphasizes the conservation of the environment and cultural heritage while promoting community-based tourism initiatives that ensure tourism revenue stays within the local economy.

Promoting Pro-Poor Tourism in Ethiopia

Several international organizations, nonprofits and local alliances are working on the ground to promote tourism as a means of poverty alleviation in Ethiopia. The World Bank has invested in projects like the Sustainable Tourism Development Project, which aims to create jobs and increase incomes for people living near key tourist destinations such as the Simien Mountains, Lalibela and Lake Tana. Similarly, the United Nations World Tourism Organization (UNWTO), through its Sustainable Tourism-Eliminating Poverty (ST-EP) initiative, works with the Ethiopian government to promote eco-tourism and community-based tourism projects that can directly benefit impoverished populations.

At a more localized level, the Ethiopian Sustainable Tourism Alliance (ESTA) focuses on empowering rural communities through community-based eco-tourism projects. ESTA provides training in hospitality and entrepreneurship, allowing local people to capitalize on tourism in their regions. These ongoing initiatives help locals set up guesthouses, provide guiding services, or sell handicrafts, ensuring that they can directly benefit from the growing number of tourists visiting the country.

SNV Ethiopia, a nonprofit development organization, also plays a significant role in fostering community-based tourism initiatives. SNV’s projects emphasize the empowerment of local communities, helping them build sustainable tourism businesses that offer authentic cultural experiences to visitors.

Initiatives for Local Communities

Several tourism initiatives have been developed across Ethiopia with a specific focus on alleviating poverty. Community-based tourism projects are among the most promising, particularly in areas like the Simien Mountains, where locals serve as guides, porters and lodge operators. In these projects, tourism provides a direct source of income for the community.

Looking Ahead

Ethiopia’s tourism sector holds immense promise, but challenges such as infrastructure limitations and a lack of community resources still need addressing. Expanding access to rural areas and enhancing local skills could be key to unlocking tourism’s full potential. Ensuring sustainable practices in tourism development can potentially protect Ethiopia’s rich cultural and natural heritage while continuing to foster economic growth. With targeted investments and a focus on inclusive development, Ethiopia is well-positioned to turn tourism into a driving force for poverty reduction and a better future for its citizens.

– Yuhan Ji

Yuhan is based in Cambridge, MA, USA and focuses on Good News for The Borgen Project.

Photo: Flickr

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TechnoServe and GENA: Improving Ethiopia’s Agricultural Exports

How GENA and TechnoServe Improves Ethiopia’s Agricultural Exports Ethiopia, one of Africa’s fastest-growing non-oil economies, provides significant opportunities for inclusive growth. Agriculture employs 85% of the workforce and contributes more than 45% to the country’s GDP, making it a critical sector. However, many smallholder farmers struggle to access markets due to limited infrastructure. In response, organizations such as TechnoServe and GENA are working to help Ethiopian smallholder farmers integrate into more formal and sustainable agricultural markets.

TechServe’s Role in Supporting Smallholder Farmers

For over a decade, TechnoServe has collaborated with farmers and the Ethiopian government to develop competitive agricultural market systems. This work focuses on enhancing farmers’ productivity by providing training in improved agricultural practices and creating sustainable sourcing opportunities with GENA, an Ethiopian investment group. Together, they aim to advance Ethiopia’s economy. 

The SERES Project

A significant example of this collaboration between TechnoServe and GENA is the Scaling Ethiopia’s Regenerative Export Sector (SERES) project, launched in 2021 by TechnoServe in partnership with the Norwegian Agency for Development Cooperation (NORAD). This project seeks to connect smallholder farmers with international markets and promote the production of sustainably grown crops such as fruits and herbs. SERES has enabled Ethiopian farmers to meet international quality standards. 

GENA’s Partnership

GENA is an Ethiopian agribusiness focused on exporting agricultural products. As part of the SERES project, the organization received funding to establish a rosemary collection center and drying facility in central Ethiopia. This facility provides a direct link between small-scale farmers and the organization. This ensures consistent supply chains meet international standards. Farmers who supply rosemary to GENA benefit from guaranteed prices and timely payments. 

Kadri Mohamed’s Story

A true success story to come out of this partnership is smallholder farmer Kadri Mohamed. TechnoServe reported that Kadri previously sold his rosemary crop to local traders. He faced long delays in receiving payments and would often receive prices lower than expected. Without guidance on sustainable farming, much of his crop would go to waste. The SERES project, in partnership with GENA, changed that. Kadri now sells his rosemary to GENA, receiving payments up to eight times higher than before and within just a few days. This allowed him to significantly increase his income from $190 to $350 annually, in turn improving his family’s life. With extra income, Kadri has been able to invest in his children’s education and secure his home with a lockable door, providing a safer environment for his family. 

The Broader Impact

The success of the SERES project illustrates the broader potential for smallholder farmers in Ethiopia and across Africa by integrating smallholder farmers into formal market systems and providing them with the necessary training and infrastructure. Through partnerships with companies like GENA, smallholder farmers can potentially access stable and profitable markets while ensuring sustainable agricultural practices that benefit the environment.

– Ellisha Hicken

Ellisha is based in London, UK and focuses on Technology and Solutions for The Borgen Project.

Photo: Flickr

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China and the World Bank Address Energy Security in Ethiopia

Energy Security in EthiopiaEnergy security is a constant concern for sub-Saharan African countries: out of the 20 countries with the largest energy deficits in the world, a staggering 18 are found in the region. At the same time, the area is home to about 80% of the global population lacking access to electricity.

Energy Security in Ethiopia

According to the World Bank, Ethiopia has the third largest energy deficit in Africa, with about half of the population unable to access reliable electricity. There is also a stark rural-urban divide: as of 2022, only 40% of rural households had reliable access to electricity, compared to 93% of urban households. Ethiopia has been making strides on this issue and recently expanded the electricity grid to cover almost 60% of towns and villages.

The main challenge, however, is the lack of adequate energy infrastructure rooted in a broader shortage of resources. Fortunately, several international actors have recently stepped up to help address Ethiopia’s energy gaps, including China’s Belt and Road Initiative (BRI) and the World Bank’s International Development Association (IDA).

China

China has been heavily involved in Ethiopia’s development for more than a decade now, reflected by the fact that Ethiopia is China’s second-largest debtor on the continent. Ethiopia was an early signee to China’s BRI, which has resulted in several multi-million dollar infrastructure projects in the country, including a flagship $5 billion railway from Addis Ababa to Djibouti.

Ethiopia doubled down on this partnership by joining BRICS+ in late 2023. This will grant the country access to BRICS’ multilateral financing institutions, thus paving the way for easier access to Chinese funding in the future. One program with particular appeal for Ethiopia is China’s “Africa Solar Belt” program, which aims to provide solar power to 50,000 African households. Ethiopia also plans to import more than 100,000 electric vehicles and 5,000 electric buses from China in the coming years in a bid to upgrade the country’s transportation infrastructure.

The World Bank

While China has often been Ethiopia’s main development partner, the country also cooperates extensively with the World Bank, primarily on financing. In the realm of energy security, the World Bank recently unveiled a program called Power Sector Reform, Investment and Modernization in Ethiopia (PRIME). This program provides Ethiopia with a “financing envelope” of $1.5 billion, disbursed in multiple phases in the next 10 years, to upgrade its energy sector.

The program focuses on investing in critical energy infrastructure and expanding electricity access more broadly. In an attempt to diversify and stabilize Ethiopia’s energy supply, PRIME will only invest in non-hydropower renewable energy sources since 96% of Ethiopia’s electricity is currently derived from hydropower. Almost all of the funding comes from the IDA, the World Bank’s fund for least-developed countries, with the remainder coming from a green energy trust fund, leaving none of the funding burden on Ethiopia.

Final Thoughts on Energy Security in Ethiopia

While energy security in Ethiopia remains an entrenched issue, the situation is improving: for instance, access to electricity has more than quintupled in the last two decades, rising from about 10% in 2001 to 55% in 2022, according to the World Bank. Furthermore, with Ethiopia’s new membership in BRICS+ and its 10-year financing deal with the World Bank, chances are good that energy security in Ethiopia will continue to improve.

– Kipling Newman

Kipling is based in Denver, CO, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Flickr

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Project Mano: Ethiopia Uses Bitcoin to Fight Poverty

Project ManoIn Ethiopia, 40% of the population still doesn’t have access to electricity, contributing to high unemployment, particularly among young adults. Without proper technological skills and access to electricity, people are less likely to find jobs. Nearly 4% of the country’s population is unemployed across both rural and urban areas. Ethiopia’s new initiative, Project Mano, aims to address these challenges by utilizing Bitcoin. The project focuses on Bitcoin mining facilities and substations to strengthen the country’s economy.

Project Mano

Project Mano aims to integrate intensive bitcoin mining into Ethiopia’s economy, powered by the country’s renewable energy resources, including the Grand Ethiopian Renaissance Dam (GERD), the largest dam in Africa. Led by the Russian bitcoin mining company Bitcluster, the project will support Ethiopia’s environmental goals of clean energy while also boosting technological infrastructure and growing the nation’s economy. If GERD is repurposed for bitcoin mining, it could generate billions of dollars annually for Ethiopia. At full capacity, the dam could power 200,000 similar machines, potentially yielding more than $2 billion per year.

Project Mano will establish a mining facility in Addis Ababa, strategically located near the GERD. Ethiopia’s climate is also a significant advantage for the facility’s construction. With temperatures ranging from 9°C to 24°C throughout the year, the country provides ideal conditions for bitcoin mining, as facilities are less likely to overheat or freeze. Additionally, Addis Ababa’s Bole International Airport, the largest on the continent, offers direct flights to most global capitals, making it a key transport hub and helping reduce the cost of importing equipment and materials.

The Benefits

Project Mano will offer significant benefits to Ethiopia’s population in the fight against poverty. Inflation remains high and the crises in Ukraine and Gaza have increased pressure on import prices. With 55% of the population unbanked, money circulation is limited, forcing the government to print more money and worsening inflation. One of Project Mano’s initiatives is to adopt Bitcoin as legal tender, allowing it to be used for purchases, employee salaries and taxes. Since bitcoin maintains its value, this could help reduce poverty by stabilizing Ethiopia’s economy and promoting fiscal security.

Furthermore, using the GERD for bitcoin mining will provide 24/7 electricity access, helping Ethiopia combat poverty. The “electrification” of rural areas will lead to the establishment of bitcoin mining substations, allowing remote communities to gain access to electricity while creating new tech-related job opportunities. This increase in employment will boost Ethiopia’s economy and significantly reduce the number of people struggling with food poverty.

Summary

Project Mano proposes bitcoin mining as a solution for securing a stable economy. It plans to establish a facility in Addis Ababa powered by Africa’s largest hydroelectric project and other renewable energy sources. The project aligns with Ethiopia’s renewable energy goals while having the potential to generate billions of dollars for the economy. By expanding technological infrastructure, bitcoin mining will create more employment opportunities, address the high unemployment rate among young adults and help alleviate food poverty. Additionally, the Bitcoin facilities present significant opportunities for foreign investment and access to foreign currency, improving the quality of life for average Ethiopians and stabilizing the economy on a larger scale.

– Chelsey Saya McLeod

Chelsey is based in Southampton, Hampshire, UK and focuses on Good News, Technology and Solutions for The Borgen Project.

Photo: Pexels

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$20 Billion in Funding to Boost Ethiopia’s economic recovery

Ethiopia's economic recoveryEthiopia, Africa’s second most populous country, has faced significant economic challenges recently, including a total debt of $28 million, a foreign currency shortage and the default of its $33 million Eurobond in 2023. In response to these pressures, the National Bank of Ethiopia (NBE) made a decisive move on July 29, 2024, by floating its currency to secure much-needed funding. This shift allows for free trade in the foreign exchange market, which the NBE believes will increase the country’s integration with the global economy.

The International Monetary Fund (IMF) and the World Bank have pledged $20 billion in funding in the next four years to support Ethiopia’s economic recovery and growth. This financial assistance aims to boost the financial sector, enhance investment and trade opportunities and advance the overall economy. The plan also focuses on reforming critical areas such as education, renewable energy, urban development and job creation, laying the groundwork for a more sustainable and prosperous future.

Why Does Ethiopia Need Funding?

The effects of the pandemic were felt worldwide and Ethiopia’s agriculture industry, the most significant contributor to the country’s gross domestic product (GDP), was no exception. Accounting for approximately 75% of the workforce and 80% of exports, the sector faced immense pressure as COVID-19 restrictions disrupted the food supply chain, limiting business operations and employment. These disruptions led to decreased crop production, particularly in rural communities, resulting in reduced household incomes, higher food prices and increased financial instability.

Additionally, tensions between Ethiopian and Eritrean forces escalated into the Tigray War from 2020 to 2022. Although a cease-fire agreement was eventually reached, the aftermath of the conflict left widespread devastation across Ethiopia, displacing many people and damaging critical infrastructure. The situation became particularly dire in the Amhara region, with communities deprived of access to food, water and health care. As a result, the area was declared an emergency zone in August 2023.

Relentless natural disasters have also severely impacted Ethiopia in recent years. In November 2023, heavy rainfall caused floods in parts of the Somali region. This year, floods struck several areas, including Afar, Central Ethiopia and Oromia in May and much of the Horn of Africa in June, leading to widespread damage and further displacement. Last month, two catastrophic landslides buried villages in the Gofa zone, marking the deadliest such events in the country’s history. Recovery efforts are ongoing, with humanitarian aid programs working tirelessly to rebuild and restore these devastated areas.

Ethiopia’s Economic Recovery

Since the announcement of the floating currency, Ethiopia’s birr has faced a sharp decline in value, immediately triggering a rise in inflation and widespread concern. In response, the government lifted import bans on more than 30 products that had been restricted since 2022. While this move could enhance Ethiopia’s competitiveness in the global market, the long-term benefits are yet to be seen.

Prime Minister Abiy Ahmed emphasized the importance of this shift, stating that it is “critical to relieving foreign exchange shortages, removing constraints to private sector investment and growth and aligning the prices of imported and exported goods and services with market realities.” The restructuring is expected to keep Ethiopia on track to becoming a middle-income country within the next several years.

Final Note

The $20 billion funding from the IMF and World Bank will help stabilize Ethiopia’s economic recovery by restructuring debt, boosting key sectors and supporting recovery from natural disasters and conflict. This aid is crucial for enhancing global competitiveness and advancing the country toward middle-income status.

– Tanita Love

Tanita is based in Chicago, IL, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Unsplash