@foreignaid – Ethiopian Business Review

Ethiopia and the European Union (EU) today signed a major €240 Million (USD266.7 million) grant agreement under the 2024 Annual Action Programme (AAP-2024), reinforcing their five-decade-long strategic partnership. The agreement, inked at the Ministry of Finance, targets critical development areas, including agribusiness expansion, digital skills training, post-conflict recovery, and governance reforms.

The funding will support agribusiness initiatives to enhance productivity and create jobs for smallholder farmers, while also strengthening digital skills within Technical and Vocational Education and Training (TVET) institutions to drive economic growth. Additionally, the program will bolster democratic institutions, restore basic health services in conflict-affected regions, and provide psychosocial support for survivors of gender-based violence. Another key focus is improving economic opportunities for displaced populations through integrated solutions and boosting private sector engagement in vital value chains.

Finance Minister Ahmed Shide hailed the EU’s support as pivotal in addressing Ethiopia’s pressing challenges. “This financing package is crucial for stimulating private sector investment, modernizing our tax and customs systems, and enhancing services in agribusiness, health, and education,” he said. “It reinforces our longstanding partnership and contributes significantly to our ongoing reforms.”

The minister also stressed the importance of regional integration under the EU’s Global Gateway Initiative, highlighting the Horn of Africa’s untapped potential for economic cooperation. “As we navigate evolving economic landscapes, our focus on regional cooperation is more critical than ever,” he noted, referencing collaborative frameworks like the Horn of Africa Initiative (HOAI).

EU Ambassador to Ethiopia, Sofie From-Emmesberger, underscored the agreement’s broader significance, stating, “The AAP 2024 reflects our collective commitment to advancing sustainable development in Ethiopia. This is not just a financial agreement; it is a manifestation of our shared values and goals for a prosperous future.”

Ethiopia and France have solidified their ongoing economic partnership with the signing of a significant financial agreement aimed at advancing Ethiopia’s reform agenda. The agreement, concluded between Ethiopia’s Ministry of Finance and Agence Française de Développement (AFD), signals a critical step in supporting Ethiopia’s economic transformation through both budgetary and technical assistance.

The deal includes a USD27 million budget support package, with USD11.34 million already disbursed in December 2024, alongside a USD4.07 million grant for technical assistance. On December 21, 2024, Ethiopian Finance Minister H.E. Ahmed Shide and AFD CEO Rémy Rioux finalized the budget support agreement, while today’s technical assistance agreement was signed by State Minister of Finance H.E. Dr. Eyob Tekalign and AFD Country Director Mr. Louis-Antoine Souchet.

This agreement focuses on strengthening Ethiopia’s Homegrown Economic Reform (HGER) 2.0 through strategic reforms in key sectors. The technical assistance will be managed by the Ministry of Finance and the National Bank of Ethiopia, with a strong emphasis on financial sector reforms, restructuring State-Owned Enterprises (SOEs), refining Public-Private Partnership (PPP) regulatory frameworks, and implementing sectoral reforms across multiple agencies.

State Minister of Finance Dr. Eyob Tekalign expressed that this partnership represents a significant milestone in Ethiopia’s reform journey. He explained that while the budgetary support will provide vital fiscal space, the technical assistance would play a pivotal role in enhancing the country’s Public-Private Partnerships, improving governance within SOEs, increasing financial sector competitiveness, and strengthening institutional capacity for effective policy execution.

Dr. Eyob further acknowledged AFD’s ongoing support, highlighting the flexibility of the technical assistance program, which accommodates multiple partners and ensures value for money.

In a similar vein, Mr. Louis-Antoine Souchet, AFD’s Country Director, reaffirmed his institution’s commitment to Ethiopia’s reform agenda. He emphasized that this collaboration was a reflection of France’s sustained investment in Ethiopia’s economic sustainability and public sector efficiency. AFD, he added, would continue to foster peer-to-peer exchanges and knowledge-sharing between French and Ethiopian institutions, ensuring successful reform implementation and long-term economic resilience.

Ethiopia Secures USD266.7M EU Funding for Agribusiness & Digital Skills

Ethiopia and France Sign USD30.8 Million Agreement to Accelerate Economic Reform