View of Addis Ababa, the capital of Ethiopia

Ethiopia A rising nation facing big challenges

Ethiopia is making good progress on achieving sustained improvements in the living conditions of its people. This has become possible thanks to the enormous development efforts undertaken by the Ethiopian government, support from donor countries, and the level of economic growth that has been achieved in recent years. At present, Ethiopia still belongs to the group of the world's least developed countries. Its status as a strong stabilising force in the region and its enormous support for refugees are all the more remarkable.

Prime Minister Abiy Ahmed's government launched a comprehensive and far-reaching process of reform in 2018 in order to democratise the country and further advance economic development. The government's policy is very development oriented and is characterised by great determination to implement the country's ambitious national development strategy.

Germany supports this course. Negotiations are under way between Ethiopia and Germany on a reform partnership – a deepened form of development cooperation with reform-minded African partner countries within the framework of the G20 Compact with Africa initiative.

Development cooperation

Germany is currently supporting programmes in Ethiopia in the priority areas of sustainable economic development and vocational education, agriculture and food security, and conservation and sustainable use of natural resources (biodiversity).

The Federal Ministry for Economic Cooperation and Development (BMZ) also assists Ethiopia in its efforts to meet the needs of displaced persons. At the end of January 2021, the East African country was hosting about 800,000 registered refugees, mainly from neighbouring South Sudan, Somalia and Eritrea.

13-year-old Momina Ali from Ethiopia has to miss a day at school because she has to provide water for the family.

Impressive pace of reforms Internal link

When Abiy Ahmed, a reform-oriented policymaker, was appointed Prime Minister in April 2018, a sense of a new beginning emerged across the country. Abiy has been pursuing a fundamental transformation of domestic, economic and foreign policies at an impressive pace

Workers in a textile factory in Ethiopia, producing for a chain of shops that is widespread in Germany

Focus on development is bearing fruit Internal link

The Ethiopian government has extremely ambitious reform plans for modernising the state and reducing poverty. On the current Human Development Index (HDI), Ethiopia ranks 173rd out of 189 countries.

Danotek wind energy laboratory in Addis Ababa. Here, high-performance generators for wind turbines are developed, which are later produced in the USA and Europe.

Focus on industry and agriculture Internal link

From 2007 to 2017, Ethiopia saw economic growth rates between 8.6 and 12.6 per cent. Ethiopia wants to achieve the status of a middle-income country by 2025.

Still image from the video: Coffee and honey from the forests of Ethiopia
Video: Coffee and honey from the Ethiopian forests

German development cooperation with Ethiopia

thiopia is one of Germany's development cooperation partner countries, meaning that there is a programme of close cooperation based on intergovernmental agreements. 

In 2017, the German Development Ministry (BMZ) pledged a total of 215.6 million euros in new commitments to Ethiopia. This includes funding under transitional development assistance, the special ONE WORLD – No Hunger initiative and the special initiative on displacement. 

In 2018, a further commitment of 158.5 million euros was made.

Development cooperation focuses on the following three priority areas:

  • Sustainable economic development and vocational education
  • Agriculture and food security
  • Conservation and sustainable use of natural resources (biodiversity)

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.

German Development Minister Gerd Müller and Abiy Ahmed, Prime Minister of Ethiopia, visiting a construction site in Addis Ababa in August 2018

German Development Minister Gerd Müller and Abiy Ahmed, Prime Minister of Ethiopia, visiting a construction site in Addis Ababa in August 2018

German Development Minister Gerd Müller and Abiy Ahmed, Prime Minister of Ethiopia, visiting a construction site in Addis Ababa in August 2018

Reform partnership

In order to support Ethiopia's course of reform, the German government entered into negotiations with the government in Addis Ababa on the establishment of a reform partnership. Through the reform partnerships, Germany is making a contribution to the G20 Compact with Africa initiative, which has the purpose of increasing private investment and creating jobs in participating African countries.

Based on close interministerial consultation within the German government, the BMZ wants to focus on the following areas of cooperation with Ethiopia:

  • Financing of reforms in cooperation with the World Bank and France so as to improve the political, legal and economic environment
  • Support for the private sector through activities under the Special Initiative on Training and Job Creation, support for Ethiopia's industrialisation strategy, improvement of environmental and social standards in the textile industry
  • Transformation of the agricultural sector, efforts to strengthen selected value chains
  • Governance – support for fair parliamentary elections in 2020, support for sustainable land use, regulation of land rights
Vocational school in Mekele (Ethiopia)

Skilled workers for Ethiopia's economy Internal link

The purpose of Germany's development cooperation with Ethiopia is to support the government's reform policy, strengthen the private sector, especially Ethiopia's SMEs, and improve opportunities for young people. Skilled and educated workers are urgently wanted in the technical and engineering fields in particular. So far, candidates often do not have the right skills or qualifications. Germany is helping Ethiopia improve the quality of vocational education and make it more practice-oriented.

Drip irrigation on a field in Ethiopia

Soil protection and better harvests Internal link

The Ethiopian government has set itself the goal of guaranteeing long-term food security for the country's people. To achieve this, land management will need to be improved. The conservation and sustainable use of land, forests and water, improved cultivation methods and effective erosion control are helping to reduce the widespread soil degradation that exists in the country, i.e. the loss of soil fertility. This will enable farmers to significantly increase the size of their harvests.

Papaya tree in Mahoni, Ethiopia

Using natural resources responsibly Internal link

Ethiopia is home to a great variety of animals and plants, and lies within two areas which are considered biodiversity hotspots of global significance (Horn of Africa hotspot and Eastern Afromontane hotspot). However, biological diversity has dwindled dramatically. As the population is growing rapidly, natural resources are overexploited, protected areas are used as pastureland, and forests are cut down for firewood. In order to protect the remaining biodiversity, the government has designated 14 per cent of the country's territory as protected areas.

Tram in Addis Ababa, Ethiopia

Tram in Addis Ababa, Ethiopia

Tram in Addis Ababa, Ethiopia