View of Addis Ababa, the capital of Ethiopia

Ethiopia A country facing big challenges

Ethiopia had been making good progress on achieving sustained improvements in the living conditions of its people. However, the rate of economic growth, which had been continuously high for a number of years, has dropped significantly as a result of the COVID-19 pandemic and of internal violent conflict. The large landlocked country in East Africa is still one of the world's least developed countries. On the current Human Development Index (HDI), Ethiopia ranks 175th out of 191 countries.

The country is facing huge political and economic challenges – not just internal conflicts and the pandemic, but also a locust plague, recurrent droughts and floods in parts of the country, high foreign exchange shortages, and a very high inflation rate.

Tigray conflict

The continuing armed conflict in the northern region of Tigray, which began in November 2020, has now spread to the neighbouring regions of Afar and Amhara. At present, no end to the civil war is in sight.

The humanitarian situation is dramatic. 5.2 million people in Tigray (90 per cent of its population) and nearly two million people in neighbouring regions are in need of humanitarian aid. Some 400,000 people are facing famine-like conditions. The conflict is also having a severe impact on the country's budget. Ethiopia's credit rating has been downgraded, and an International Monetary Fund (IMF) program that had only been launched in 2019 has been terminated prematurely.

German development cooperation with Ethiopia

In order to lend effective support to Ethiopia's course of reform, the German government concluded a “reform partnership” with Ethiopia in November 2019. The funding committed for that partnership at the end of 2020 (100 million euros) will only be disbursed if certain political criteria are met. They include the holding of general elections, steps towards a political solution to the Tigray conflict, and the investigation of human rights violations. Whether or not the reform partnership will be continued depends on the government's future course regarding the Tigray conflict and on its efforts to improve the humanitarian situation.

At present, all development projects in Tigray have been suspended, and so have some activities in parts of Afar and Amhara.

In the other parts of the country, the programme of Ethiopian-German development cooperation continues, in line with EU policy, so as to provide continued assistance to the people of Ethiopia to help them cope with current challenges. The focus of Germany's efforts is on economic policy reforms, efforts to strengthen the private sector, and the creation of decent jobs.

Ethiopian-German cooperation concentrates on the following core areas:

  • Training and sustainable growth for decent jobs
  • A world without hunger
  • Peaceful and inclusive societies

The focus of German activities, including with regard to planning for the future, is on grassroots-level measures for food security, efforts to increase resilience, and support for private sector development. In response to the crisis, cooperation in the core area of “Peaceful and inclusive societies” will be increased.

Other areas of cooperation

In addition to the activities within the core areas mentioned, Germany is also active in Ethiopia in the field of environmental protection and sustainable natural resource management.

And the BMZ is supporting Ethiopia in the fight against the COVID-19 pandemic by helping to implement the Ethiopian COVID-19 response plan, supporting measures in cooperation with the World Health Organization, and helping to mitigate the economic impact of the pandemic (support for the textile sector).

In addition, Germany is providing assistance for displaced persons living in Ethiopia and for local people in host communities. In order to improve the living conditions and economic opportunities of both groups, support is being provided, in particular, for activities concerned with food security, preventive health care, water and sanitation, and vocational training.