@AfDB_Group – Page 3 – Ethiopian Business Review

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The Trump administration is proposing to eliminate its USD 555 million commitment to the African Development Bank’s (AfDB) primary development fund, a move that could significantly disrupt development financing for Africa’s low-income countries. According to Black Star News, the proposal—submitted to the U.S. Congress—suggests that Washington will halt all contributions to the fund starting next year, arguing that the fund is “not currently aligned” with the administration’s priorities.

This sudden shift not only threatens the AfDB’s resource planning but may also trigger a fundamental recalibration of the bank’s development strategies. The AfDB is nearing the end of its current USD 8.9 billion funding cycle and was aiming for a major USD 25 billion replenishment. The U.S., a key player since 1976 and the bank’s second-largest shareholder, has been instrumental in sustaining the fund. While other donor countries have also reduced contributions, the scale of the proposed U.S. cut is unprecedented.

The decision comes at a pivotal time for the bank, with leadership elections scheduled for later this month. The incoming president will now face the daunting task of navigating a funding shortfall and rebuilding donor confidence amid growing development demands across the continent.

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The International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, has appointed Ethiopis Tafara as its Vice President for Africa.

In this leadership role, Ethiopis will oversee IFC’s strategic investment and advisory operations across Africa. He will lead a team of nearly 800 staff members and manage a growing portfolio currently valued at USD17 billion, aimed at boosting job creation and accelerating private sector development in key sectors including infrastructure, agriculture, manufacturing, finance, and telecommunications.

A U.S. national of Ethiopian origin, Ethiopis brings extensive experience from previous senior roles within the World Bank Group. Most recently, he served as Vice President, Chief Risk, Legal & Sustainability Officer for the Multilateral Investment Guarantee Agency (MIGA). He also previously held the position of Vice President and General Counsel at IFC.

“Africa is an increasingly important voice on the global stage,” said Ethiopis. “Though challenges persist, the opportunities are even greater. The continent’s private sector and entrepreneurs are more dynamic than ever before.”

Born in Ethiopia and raised between Ethiopia and Italy, Ethiopis is fluent in Amharic, French, Italian, Spanish, and English. He holds a Juris Doctor (JD) from Georgetown University Law Center and an AB degree from Princeton University. His expertise spans capital markets, corporate law, governance, compliance, and risk management.

Welcoming the appointment, Makhtar Diop, Managing Director of IFC, stated:

“I am thrilled to welcome Ethiopis to this role. His deep and long-standing commitment to Africa’s development and his unique skillset are well-suited to support the continent’s development pathways.”

Ethiopis will be based in Nairobi, Kenya, and succeeds Sérgio Pimenta, who recently retired after nearly three decades of service at IFC.

In the 2024 fiscal year alone, IFC delivered record investment levels across 45 countries in Africa, including 30 classified as low-income or fragile and conflict-affected situations (FCS).

Dashen Bank has made history by becoming the first private bank in Ethiopia to secure a Trade Finance Guarantee Facility Agreement worth USD 40 million from the African Development Bank (AfDB). The agreement was officially signed this morning at Dashen Bank’s headquarters, marking a major milestone for both the bank and Ethiopia’s financial sector.

The signing ceremony was attended by key representatives from Dashen Bank and AfDB. Asfaw Alemu, CEO of Dashen Bank, expressed pride in securing this facility, noting that it is the first of its kind to be extended to a private bank in Ethiopia. He emphasized that Dashen Bank is honored to serve as a bridge to bring this significant opportunity to life. Asfaw further highlighted that the agreement symbolizes strategic alignment that helps unlock Africa’s full potential. He attributed the successful securing of this facility to Dashen Bank’s rigorous due diligence, operational soundness, and progress in governance, underscoring the bank’s strong strategic direction.

Dr. Leandre Bassole, Deputy Director General of East Africa at the AfDB, expressed the agreement’s importance, calling it a pivotal milestone in strengthening the partnership between the AfDB and Ethiopia’s financial industry. Bassole noted that the agreement will play a significant role in advancing inclusive, private sector-led growth in Ethiopia, emphasizing that it marks the first direct trade finance guarantee facility the AfDB has provided in the country.

This facility will enable Dashen Bank to facilitate import and export trade finance requirements, thereby enhancing the bank’s capacity to support critical sectors of the Ethiopian economy. It is expected to significantly bolster trade finance by providing guarantees to confirming banks for non-payment risks arising from trade finance instruments such as letters of credit issued by Dashen Bank. This initiative responds to the challenges faced by Ethiopian banks, which have been constrained by inadequate credit lines from international confirming banks, limiting their ability to support clients effectively.

The facility is also expected to promote intra-Africa trade, aligning with the African Continental Free Trade Area (AfCFTA) agenda. It will help address the financing gaps in critical sectors and support the import of essential goods such as fertilizers, pharmaceuticals, solar energy panels, and agricultural machinery, all crucial for Ethiopia’s development.

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The European Investment Bank (EIB) is considering financing Ethiopia’s planned new international airport, a move that signals deepening engagement in the country’s infrastructure ambitions. The announcement followed a high-level meeting between Ethiopia’s Finance Minister Ahmed Shide and EIB Vice President Ambroise Fayolle, where both sides reaffirmed their commitment to intensify development and investment cooperation.

During the discussion, Minister Ahmed Shide expressed appreciation for the EIB’s sustained backing of Ethiopia’s priority areas, particularly SME financing, water and sanitation, and women’s entrepreneurship development. These sectors are widely seen as pivotal to the country’s economic and social transformation.

Fayolle reaffirmed the Bank’s commitment to supporting Ethiopia’s long-term development goals, noting that EIB is now exploring options to contribute to the financing of the planned international airport, which is expected to serve as a major logistics and investment hub for the Horn of Africa.

Both parties agreed to deepen their collaboration, with additional sectoral discussions expected during the upcoming visit of senior EIB officials to Ethiopia.

The Ethiopian Enterprise Development (EED) has announced that it successfully disbursed over ETB 6 billion in operational loans to 1,209 small and medium-sized manufacturing enterprises (SMEs) during the first nine months of the 2024/25 fiscal year. The funds are part of the government’s ongoing efforts to strengthen and expand the country’s industrial base.

Abdulfatah Yusuf, Deputy Director General of EED, shared these figures at a press briefing, highlighting the positive impact these loans have had in enabling local enterprises to scale operations, improve efficiency, and create jobs. The loans are aimed at helping SMEs overcome financial barriers, particularly for those that are working to expand their production capacity or upgrade their technology.

Additionally, EED facilitated the distribution of machinery worth over ETB 4.3 billion to 889 enterprises through its lease financing services, further enabling the growth of manufacturing capabilities across Ethiopia.

This support comes at a time when the country’s manufacturing sector is experiencing a resurgence, with the creation of 151,726 new jobs and the establishment of 2,752 new enterprises in the first nine months of the fiscal year. The government’s industrial development agenda also emphasizes import substitution, with 1,451 enterprises producing 902,191 tons of proxy products, saving the country an estimated $1.6 billion in foreign exchange.

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The International Monetary Fund has lowered sub-Saharan Africa’s economic growth projection for 2026 to 4.2%, down from its October forecast, citing mounting global policy uncertainty and tightening external conditions. Abebe Aemro Selassie, Director of the IMF’s African Department announced following the release of the IMF’s Regional Economic Outlook for Sub-Saharan Africa, April 2025.

“This fragile recovery now faces a new test,” said Abebe. “Just when policy efforts began to bear fruit, the region’s growth trajectory was overtaken by a sudden realignment of global priorities.”

According to him, growth is expected to ease to 3.8% in 2025 before edging up to 4.2% in 2026—both figures revised downward due to external shocks including weakening demand from advanced economies, softer commodity prices, and tighter international financial markets.

Abebe warned that if global financial conditions tighten further or trade tensions worsen, sub-Saharan African economies could see reduced investment, higher borrowing costs, and deeper fiscal strain.

He also flags a likely decline in Official Development Assistance to the region, further straining vulnerable populations already facing elevated inflation and limited fiscal buffers. “High debt levels continue to constrain many countries’ ability to fund essential services and development priorities,” Abebe added.

To navigate these headwinds, he said that the IMF is urging countries to focus on resilience-building policies—strengthening domestic revenue mobilization, improving public spending efficiency, and reinforcing fiscal frameworks to manage debt sustainably. The Fund also recommends governance reforms, regional trade integration, and private sector development as central to creating jobs and sustaining long-term growth.

“A prosperous and stable sub-Saharan Africa is not only critical for the continent—it is a strategic pillar for global prosperity in the decades ahead,” Abebe said, highlighting Africa’s demographic advantage as a future driver of global labor supply and consumption demand.

Since 2020, the IMF has disbursed more than USD65 billion to countries in the region, including over USD8 billion in 2024. Alongside financial support, the Fund continues to provide technical assistance and policy guidance as countries grapple with internal vulnerabilities and global disruptions.

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The Ethiopian Ministry of Agriculture has announced sweeping progress in its nationwide soil and water conservation efforts, with more than 21,000 streams rehabilitated and over 3.7 million hectares of land physically developed as part of a broader strategy to combat climate change and bolster agricultural productivity.

The initiative, which has been underway since the start of the fiscal year, is part of a larger plan to develop 4.6 million hectares through integrated watershed management and sustainable land use practices. The campaign, spearheaded under the slogan “Our Soil Resources for Our Prosperity,” has mobilized millions of Ethiopians in a coordinated push toward environmental resilience and food security.

Speaking at a high-level seminar evaluating this year’s progress, Professor Eyasu Elias, State Minister of Natural Resources Development, emphasized that the program is critical in mitigating the effects of climate change while laying the foundation for a production-led green economy.

“Our integrated watershed development works are being carried out across all regions, engaging communities to protect and restore land while enhancing agricultural productivity,” he stated. “This is not just about conservation—it’s about transforming livelihoods and ensuring sustainable growth.”

The campaign has seen unprecedented public participation, with over 19.9 million citizens contributing 30 to 60 days of labor per year in soil terracing, afforestation, and gully rehabilitation. According to Chief Executive of the Natural Resources at the Ministry of Agriculture, Fanose Mekonnen, the collective effort represents an estimated ETB 16 billion in mobilized manpower, showcasing the scale of Ethiopia’s community-driven development model.

In addition to new developments, the ministry has prioritized renovating and upgrading past conservation projects, rehabilitating an additional 589,000 hectares of previously degraded land. Efforts also include monitoring tree nurseries, identifying new afforestation sites, and preparing millions of planting pits to ensure long-term ecological benefits.

The Ethiopian Investment Commission (EIC), in collaboration with the Ministry of Finance (MoF) and the Development Partners Group, is gearing up to host the 3rd edition of the Invest Ethiopia 2025: High-Level Business Forum, slated for May 12-13, 2025, at the Skylight Hotel in Addis Ababa. This prestigious event will bring together an impressive mix of 700 global investors, business leaders, policymakers, and entrepreneurs, offering a dynamic platform to explore Ethiopia’s untapped investment opportunities.

During a press conference unveiling the event, Dr. Zeleke Temesgen Boru, Commissioner of the EIC, alongside Semereta Sewasew, State Minister of Finance, Dr. Léandre Bassolé, Deputy Director General for the East African Region at AfDB, and Ashley Mulroney, the Canadian Embassy’s Representative, reinforced the forum’s significance in setting the stage for future investment flows into Ethiopia. Aimed at catalyzing the country’s economic growth, the forum is expected to attract USD 3 billion in investment over the next few years.

The forum is not just a platform for dialogue but a robust opportunity for business leaders to dive deep into Ethiopia’s evolving investment climate. As Dr. Zeleke emphasized, Ethiopia’s strategic geographic location, coupled with its affordable and reliable electricity, positions the country as an attractive destination for foreign direct investment (FDI). “Ethiopia offers investors unparalleled access to regional and global markets, with proximity to the Middle East and other key trade hubs,” he remarked. “Furthermore, the government’s commitment to providing tax incentives and fostering a business-friendly environment makes it an ideal location for long-term investments.”

The forum also seeks to showcase the government’s commitment to fostering a private-sector-driven economy. Over the past few years, Ethiopia has actively worked to create an environment that is both conducive to investment and supportive of entrepreneurship. The strategic reforms implemented to date are now set to serve as the backbone for attracting further capital.

The previous Invest in Ethiopia Forum in April 2023 saw an impressive turnout of 750 foreign investors, with an estimated USD 1.6 billion in investment commitments. These engagements helped Ethiopia secure a USD 3.9 billion FDI influx in the 2023-2024 fiscal year.

Ashley Mulroney, representing the Development Partners Group, highlighted the importance of collaboration between the government, private sector, and development partners in Ethiopia’s investment ecosystem. She noted that while global economic challenges like inflation and trade disruptions continue to affect emerging markets, Ethiopia’s macroeconomic stabilization efforts and structural reforms are proving resilient.

She emphasized the need for investment to focus on inclusive growth, with particular attention to youth, women, and underserved communities. This commitment to fostering inclusive development is crucial as Ethiopia looks to tap into its demographic dividend and address the needs of its rapidly growing population.

The expansion into sectors like telecom, banking, and logistics is another critical focus of the forum. Ethiopia’s recent shift to a market-based exchange rate system has been instrumental in creating a more competitive environment for international investors. Dr. Léandre Bassolé, Deputy Director General for the East African Region at AfDB, stressed that Ethiopia’s opening up of key sectors signals a serious commitment to market liberalization and private-sector involvement. “The government’s macroeconomic reforms and efforts to liberalize essential sectors such as telecom and banking show Ethiopia’s dedication to building a modern, open economy,” Dr. Bassolé remarked.

Ethiopia’s investment journey has been significantly shaped by China’s increasing role in its development, with over 4,500 Chinese-led projects currently operating in the country. However, despite the significant strides made in promoting investment, security challenges continue to pose risks to Ethiopia’s business environment. The ongoing instability in certain regions, coupled with disruptions in supply chains, is affecting investor confidence and escalating operational costs. Dr. Zeleke acknowledged these challenges, urging a balanced perspective on the situation. “While peace is crucial for investment, the perception of instability often outweighs the reality. We must work together to ensure stability, both on the ground and in the global perception,” he said.

Ethiopia and Uganda have elevated their bilateral relations to unprecedented levels with the signing of eight comprehensive cooperation agreements during the 4th Joint Ministerial Commission session in Addis Ababa, according to an exclusive report by Soft Power News. The landmark agreements, covering aviation, energy, water resources, and agriculture among other sectors, establish a new framework for enhanced economic integration between the two nations.

The aviation sector emerged as a major beneficiary, with three distinct agreements including a Bilateral Air Services Agreement that promises to revolutionize regional connectivity. Other significant MoUs address industrial cooperation, energy collaboration, and technical exchanges in agriculture and fisheries – each designed to create tangible economic benefits for both countries.

Dr. Gedion Timotheos, Ethiopia’s Minister of Foreign Affairs, framed the agreements as critical tools for addressing shared challenges. “From Nile water management to regional security through IGAD, these accords strengthen our capacity to solve transnational issues,” he remarked. The minister emphasized the potential for joint infrastructure projects and knowledge transfers to accelerate economic development.

Uganda’s Foreign Minister, Hon. Gen. Odongo, characterized the session as a “strategic leap forward” rather than mere diplomatic routine. Noting the six-year interval since the last JMC, Odongo revealed that technical teams had been working throughout the period to prepare the ground for these ambitious agreements. “We’re not just maintaining relations – we’re building an economic bridge between East Africa’s hinterland and the Horn,” he stated.

In 2024, trade volume between Ethiopia and Uganda reached USD 5.46 million. Dr. Kassahun Gofe, Ethiopia’s Minister for Trade and Regional Integration, said the new agreements would deepen the existing friendship between the two nations and upgrade their trade cooperation framework.

Dr. Kassahun also highlighted that the MoUs will boost efforts to expand market share, strengthen private sector collaboration, and create a more conducive environment for doing business. He further noted that the two countries have agreed to cooperate on trade promotion, exchange of trade-related information and technologies, and support regional economic integration efforts.

Importantly, both nations have also committed to working together in mobilizing regional trade and investment potential through the implementation of the African Continental Free Trade Area (AfCFTA), signaling their intent to play a leading role in broader continental integration.

The Ethiopian Embassy in Djibouti has announced that the Tana Nesh Ferry has set sail on its inaugural journey from Dorale Ferje-Bezou Port in Djibouti to Gorgora in Ethiopia.

The 38-meter vessel, with a capacity for 200 passengers, represents a significant investment in regional infrastructure. Its journey along the Dikil-Galafi route is expected to take approximately seven days, with arrival in Gorgora, Ethiopia, anticipated within three months.

The embassy emphasized the comprehensive safety measures implemented for this historic crossing, including the deployment of two tugboats and technical support teams. Special arrangements have been made to manage electrical infrastructure along the route, ensuring safe passage.

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U.S. Plans to Withdraw USD555 Million From AfDB Fund

IFC Appoints Ethiopis Tafara as Vice President for Africa

Dashen Bank Becomes First Private Bank in Ethiopia to Secure Trade Finance Guarantee from AfDB

European Investment Bank Eyes Support for Ethiopia’s New International Airport

Ethiopia Disburses Over ETB 6 Billion in Loans to Manufacturing SMEs

IMF Cuts 2026 Growth Forecast for Sub-Saharan Africa to 4.2%

Ethiopia Reclaims 3.7 Million Hectares Through Nationwide Soil and Water Campaign

Invest In Ethiopia 2025 Forum to Drive USD 3 Billion in FDI

Eight Strategic Deals Launch New Chapter in Ethiopia-Uganda Relations

Ethiopia and Djibouti Open New Maritime Route with 200-Passenger Ferry Service