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Ethiopia: African Development Bank’s New 2023-2027 strategy to help spur economic transformation

On 17 November 2022, the African Development Bank Group Board of Directors approved the  2023-2027 Country Strategy Paper for Ethiopia. The key objective of the Strategy is to support Ethiopia in expanding inclusive and sustainable growth through agro-industrialization, improved connectivity and competitiveness and reduced vulnerability to shocks.

The blueprint focuses on two priority areas: i. improving economic and financial governance for greater resilience, enhanced service delivery and private sector growth, and ii. developing quality and sustainable infrastructure to support Ethiopia’s agro-industrialization.

Under the first priority area, the Bank will support Ethiopia to strengthen institutional and human capacity in macroeconomic and financial governance, including monetary policies and debt management. A key focus is to improve the government’s capacity to deliver quality and equitable essential social services, promote transparency and accountability, and strengthen the resilience of institutions and services.

Specific results envisaged include increased access to essential services, improved economic opportunities for women and youth and an expanded role for the private sector in the economy. In particular, the share of the population with access to essential health services within a two-hour travel time is expected to increase from 60% in 2022 to 65% in 2027; the share of the population with access to safe drinking water is projected to rise to 63.5% from 58.5%;and that of the population with access to basic sanitation services to increase from 20% to 25%. Private investment as a share of gross domestic product is expected to increase from 24% to 28%, and the rate of youth access to credit facilities to increase from 25% to 30% (30% of them women).

Regarding the second priority area, the African Development Bank is planning to support the development of quality, sustainable and climate-friendly infrastructure. This will help expand agro-industrialization and value chains, improve connectivity and inclusion, diversify production and facilitate structural transformation. The development of high-quality infrastructure will reduce the cost of doing business, facilitate the movement of goods and people and increase productivity.

The Bank’s support will also help improve access to energy systems to meet domestic demand and strengthen regional connectivity. Investments will focus on constructing transmission and distribution lines as well as mini-grids. They will also support energy reforms and enhance human and institutional capacity for increased efficiency and quality of services.

The implementation of this pillar will contribute to increasing the proportion of cooperatives and farmers’ organizations linked to agro-industrial parks from 34% in 2022 to 40% in 2027; wheat production from 5.2 million tonnes to 6.5 million tonnes; and milk from three billion to five billion liters by 2027.

The share of households with access to electricity will rise to 50% of the population by 2027, from 44% in 2022. Energy exports will increase from 1,145 gigawatt-hours per year to 2,374 gigawatt-hours, mainly to Kenya and Djibouti.

Source African Development Bank Group

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