Policy paper

UK–Ethiopia development partnership summary, July 2023

Published 17 July 2023

This was published under the 2022 to 2024 Sunak Conservative government

Introduction

The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature and global health. The Integrated Review Refresh (IR23) reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the SDGs. This Country Development Partnership Summary details how the IDS and IR23 will be put into practice with Ethiopia.

Country context

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In 1990 Ethiopia was the poorest country in the world. Economic growth averaging 7% per annum over the next 30 years, driven by significant public investment, resulted in strong progress in reducing poverty. The proportion of people in poverty fell from 34% in 2004 to around 27% in 2015, equivalent to 5 million people being lifted out of poverty. Infant mortality more than halved between 2000 and 2017, and a child born in 2016 was expected to live 13 more years than a child born in 2000. However, since 2018, Ethiopia’s progress and reforms have been disrupted by an extraordinary series of shocks (external economic shocks, climate shocks and internal conflict in the north of the country).

The combination of these pressures has slowed and, in some areas, partially reversed Ethiopia’s development progress. Ethiopia’s economy has faced declining government revenues, rising inflation (currently over 30%) and acute foreign exchange shortages. The worst drought in forty years, as well as internal conflict, has led to over 28 million people in need of humanitarian assistance, the largest number of any country in the world.

Conflict, droughts and floods are driving significant humanitarian needs. 4.6 million people are estimated to be internally displaced across Ethiopia. Over 20 million people are severely food insecure, including 11 million in drought-affected areas. Multiple disease outbreaks are ongoing, including cholera, malaria and measles. Nutrition trends are deteriorating, elevating mortality and morbidity risks. Conflicts in the bordering countries of Sudan and Somalia also threaten increased refugee flows.

Basic services such as health and education are under pressure. Ethiopia remains the twelfth poorest country in the world and the fourth highest for maternal and infant deaths. Over 40 million people have no access to clean water in Ethiopia and 68% of the population have no access to proper latrine facilities. Basic reading levels declined during the COVID-19 pandemic. Progress has been made across the health, education and water sectors in Ethiopia, but gains have been undermined by crisis.

While the peace process in the north of the country is progressing, the picture nationally is uncertain, with interspersed conflict across the country. The Cessation of Hostilities Agreement (CoHA) signed in November 2022 reduced violence and the scale of human rights violations in Northern Ethiopia. However, violence and unrest in other areas, especially Oromia and Amhara regions, bring new reports of human rights abuses. Restrictions on media, rights groups and civic actors are frequently imposed despite enabling legislation for these groups being introduced as part of political reforms in 2018.

Ethiopia is a huge and complex country in a challenging neighbourhood. At the same time as experiencing a major humanitarian crisis, political and ethnic tensions, it is also driving forward an ambitious reform agenda, investing in clean energy, aviation, roads, finance, basic services and telecoms. Its reform plans will open major opportunities for investment partnerships and Ethiopia is well placed to play a leading role on the international stage in the areas of climate and development.

If Ethiopia reduces conflict, it has the potential for rapid development, significant economic opportunity, and a return to its role as an anchor for regional stability. However, it will need to overcome significant challenges. Supporting Ethiopia in partnership to overcome and respond to the humanitarian crisis and development needs, build resilience to future shocks, and champion the empowerment, rights and freedoms of women and girls will be an essential part of our Strategy for International Development.

Why and how: the UK’s development offer

Ethiopia is one of the His Majesty’s Government’s (HMG) most important development partnerships. With a population of 117 million and a key regional player in the Horn of Africa, Ethiopia’s development path matters for a huge number of people across the wider region. It also has significant importance for the UK’s geopolitical, economic, humanitarian and security interests in East Africa and beyond. Ethiopia’s population and development potential also present enormous opportunity to become a cultural and economic partner for bilateral trade and investment.

The UK has historically been one of the largest and most significant development partners in Ethiopia. Since 2016 our bilateral ODA spend has averaged over £200 million per annum, putting us in the top tier of bilateral donors. We deliver on the full range of International Development Strategy priorities, combining our ODA with our expertise and international influence.

Our goals are to:

• meet critical humanitarian needs and speed up the recovery from conflict and drought
• support Ethiopia’s transition away from conflict and towards a more democratic and inclusive society, promoting women’s participation and defending UK values
• invest in human capital, building a healthier and better-educated society, ending preventable deaths, improving outcomes for women and girls and building resilience
• support economic stability and green, inclusive growth, creating a resilient and prosperous economic partner for the UK
• helping Ethiopia address illegal migration, terrorist and crime threats, which also help protects British nationals and domestic interests

These goals are underpinned by a strong focus on delivering tangible results, working in partnership with the government and local organisations in Ethiopia (see box 1).

Our ODA spending is delivered in tandem with targeted advice, policy influencing and coordination with international partners and is delivered by a cross-UK Government team including Home Office, the Department for Business and Trade (DBT), British Council, Ministry of Defence and the UK Health Security Agency (UKHSA).

Our approach is guided by 3 key pillars:

• effective use of aid, ensuring robust value for money and leveraging the full range of bilateral and central programmes
• high quality advice, bringing in-house expertise – including peer to peer support (eg HM Revenue & Customs, the Bank of England, the British Council, UKHSA ^{[footnote 2]}), the UK’s Centres of Expertise and independent expertise
• alignment with HM Government priorities spanning climate, women and girls, free trade, and with strong coordination with like-minded development partners, the UN and multilateral development-banks

Our work is also closely aligned with the Ethiopian government’s development strategies, including the Home-Grown Economic Reforms, Ethiopia’s Social Protection framework, the 10-year Development Plan, the Climate Resilient Green Economy plan and the Climate Resilient One Wash National Programme.

Box 1: the UK’s recent results in Ethiopia

• in 2022 to 2023, the UK humanitarian assistance in Ethiopia delivered results including reaching over 950,000 with critical medical supplies, provided treatment for 80,000 malnourished children and pregnant and lactating women, supported over 200,000 people with cash assistance, and supported education for 10,000 girls and boys
• since 2015, the UK has directly supported 1.2 million children to gain a decent education; helped to increase the percentage of births with a skilled healthcare professional from 28% to 50%, giving over 3 million people access to clean water or sanitation facilities and provided more than 2,000 schools and health facilities with access to water supply and improved latrine facilities
• a combined FCDO, DBT and British International Investment campaign helped deliver a $1 billion mobile telephone investment in Safaricom which will have transformative impacts for Ethiopia, bringing connectivity to tens of millions

Inclusion is at the heart of our work: we champion gender and disability inclusion across our portfolio, support marginalised groups and focus our interventions on how they can best support the poorest.

Who we work with

Partnership is at the heart of our work in Ethiopia. We work with:

• the government of Ethiopia in close partnership at both the federal and the regional level both in setting the direction of our work and directly supporting the government in delivering results. We work in all regions in Ethiopia
• multilateral organisations including the UN, IMF, World Bank, and the African Development Bank, where the UK’s voice plays an important role. UN agencies are also amongst our largest implementing partners, with capacity and systems to deliver at scale across Ethiopia
• other donors including through an active role in the Development Partners Group, which coordinates donor activity in Ethiopia
• NGOs, contractors and civil society in Ethiopia who deliver many of our programmes, particularly in areas that are harder to access. Our engagement with civil society strengthens accountability and facilitates civic engagement

For some sectors such as health, social security, education and water, the UK provides financial support for government-led service delivery that is linked to the achievement of specific results. This is the most effective way to deliver development results and improve partner governments’ ability to provide sustainable and resilient basic services. This support is subject to regular assessments under the UK’s Partnership Principles, covering Ethiopia’s commitment to poverty reduction, respect for human rights, public financial management, and freedoms for civil society, media and grass-roots organisations to speak out on behalf of poor and marginalised groups.

In regions where government service delivery has been severely compromised, for example in conflict-affected areas, we work through humanitarian partners such as UNICEF and World Food Programme (WFP) to support the restoration of basic service capacity and support communities to cope with the impact of shocks, while in parallel supporting planning for a return to government service delivery.

Key programmes

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The UK is an important donor in Ethiopia and our portfolio of bilateral ODA programming is among the UK’s largest in the world. UK investments are supported by targeted advice, policy influencing and coordination with international partners. In recent years, we have flexed our programmes to respond to successive shocks, whether COVID-19, economic, climate or conflict related. Following the signing of the Cessation of Hostilities Agreement in late 2022, we are again adapting our portfolio to capitalise on opportunities to support recovery and reconstruction and help ordinary people in Ethiopia feel the benefits of peace.

Through our humanitarian and resilience programming, we will provide vulnerable people affected by conflict and drought with access to lifesaving nutrition, water and health support with a particular focus on the needs of women and children. We are championing the use of cash-based approaches where appropriate and innovative humanitarian delivery models.  We are supporting the Ethiopian government to accelerate the restoration of basic services in crisis-hit areas, while also investing in building resilience to shocks in the longer term, for instance through our contributions to the government’s social safety net and our assistance to improve disaster risk management systems.

To build a healthier and better-educated society, we are using our human capital programming and advisory capabilities to improve government-led education, health and water, sanitation and hygiene (WASH) systems. Our investments prioritise women and girls. In line with the UK’s Ending Preventable Deaths strategy, we are focused on improving maternal and newborn care.  Our bilateral programme improves the health system, enabling global health funds to tackle low vaccination rates and specific diseases more effectively. Our support through UKHSA helps Ethiopia prepare, detect and respond to disease outbreaks and other public health threats. We are also working to ensure more girls receive a quality education, recognising regional gender disparities in education. Our education programme, supported by British Council, builds teaching and leadership capacity nationally. Our WASH programme is designed to promote the resilience of some the communities most affected by climate change in Ethiopia.

To support Ethiopia’s transition from conflict, our governance programmes support civil society and human rights’ defenders, women and girls and other marginalised groups to hold their government to account through a more open and active civic space. We are helping to build the capacity of civil society organisations in Ethiopia, so they are better able to play their part. Our peacebuilding program (HARP) is supporting the Ethiopian Human Rights Commission, helping survivors of gender-based violence in Tigray and promoting peacebuilding initiatives in the Somali region.

To further economic stability and inclusive green economic growth we are working closely with the government to support the reforms needed to return Ethiopia’s economy to sustainable growth. This includes technical support on macro-economic reform and tax revenue reform, critical to help lift short term constraints on Ethiopia’s growth. We are also supporting Ethiopia’s WTO accession, and improving the competitiveness of Ethiopia’s industrial parks, including better conditions for workers, the majority of which are women. We are using ODA funding to deepen Ethiopia’s financial market, and to increase Ethiopia’s ability to leverage access to more climate finance. We also actively promote deeper trade and investment links between the UK and Ethiopia, with key sectors including aviation, aggro-processing and energy. British International Investment also plays a central role in bringing development-focused UK investment to Ethiopia (see box 2).

Box 2: British International Investment (BII) in Ethiopia

BII, the UK’s development finance arm, is a major investor in Ethiopia, with a wide-ranging portfolio worth over £130 million spanning telecoms, manufacturing, financial services and logistics. BII has a long history as a pioneering investor in Ethiopia: it was one of the first development finance institutions in the country and was an anchor investor in the recent Safaricom Ethiopia investment. BII also has invested in the Berbera Port, which offers an additional maritime trade corridor for Ethiopia.

To address illegal migration and reduce crime and terrorist threats, our counter terrorism programming helps supports Ethiopia to identify and then build resilience against the drivers of violent extremism. We also work with the Immigration and Citizenship Service to build capacity to detect fraudulent documents and prevent inadequately documented passengers from travelling as well as supporting Ethiopia in tackling the underlying criminality behind immigration crime.

Box 3: Top 3 spending programmes in 2023 to 2024*

Ethiopia Crises to Resilience, £36 million

Alleviated the impact of conflict and drought on the poorest Ethiopians by addressing urgent humanitarian needs and building resilience to future shocks.

Ethiopia General Education Quality Improvement Programme for Equity, £13 million

Works to transform education system performance, producing better school leadership and more educated school leavers, especially disadvantaged girls and children.

Strengthening Climate Resilient systems for WASH in Ethiopia, £10 million

Improves access to water and sanitation services in drought-affected parts of Ethiopia.

*Indicative spend, subject to change

In addition to programmes implemented by the British Embassy in Ethiopia, the UK spends a significant amount of ODA through centrally managed programmes. They contribute to UK priorities for Ethiopia such as sexual and reproductive health, education, migration, global health, investment, trade and climate change. The UK accounts for a significant share of ODA spending in Ethiopia by multilateral development partners including the UN, World Bank and the African Development Bank ^{[footnote 4]}.

We take a dynamic and learning-based approach to monitoring which combines reporting from partners with field visits to observe first-hand what our programmes are delivering and ensure UK funds reach intended beneficiaries. Where beneficial, we evaluate our interventions independently to capture results and learning which is fed into strengthening future programming.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.

The department’s spending plans for the period 2022 to 2023 to 2024 to 2025 have been revisited to ensure HMG continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The Government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The Government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

It should be noted that these figures do not reflect the full range of UK ODA spending in these individual countries as they do not include spend delivered via core contributions to multilateral organisations, or regional programmes delivered by the FCDO’s central departments. Other UK Government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their Annual Report and Accounts and the Statistics for International Development.

In 2022 to 2023 the UK spent around £86 million in bilateral ODA in Ethiopia. Around 90% of this spend supported humanitarian efforts and women and girls (W&G). A significant portion of our humanitarian spend also prioritised support to W&G. Around 11% of our budget was spent in other areas including economic development and supporting governance, peace and human rights.

Ethiopia’s expected bilateral ODA budgets for financial year 2023 to 2024 and financial year 2024 to 2025 are shown below.

Allocated ODA budget for financial year 2023 to 2024	Indicative ODA budget for financial year 2024 to 2025
£89.2 million	£214 million

In 2023 to 2024 and 2024 to 2025, our bilateral spending will be focused on 3 areas (see Figure 4):

• our humanitarian response - responding to the world’s largest humanitarian crisis
• supporting the recovery of basic services such as health, education and WASH (the vast majority of which will directly support women & girls)
• supporting Ethiopia’s peace through governance, economic development and reconstruction and recovery efforts

In 2024 to 2025, our ODA budget for Ethiopia is likely to significantly increase compared to 2022 to 2023 and 2023 to 2024. This will enable us to scale up our humanitarian response, reinvigorate our support on basic services and invest in long-term reforms which will help create the conditions for a more peaceful and prosperous Ethiopia.

91% and 75% of our programmes are marked as including an element of promoting gender and disability inclusion respectively. In 2023 to 2024 and 2024 to 2025, these areas will continue to play a prominent role in our ODA portfolio.

Financial year 2023 to 2024 thematic breakdown

Figure 1. Breakdown of spend (from most to least): humanitarian; health, education and WASH; economic development; governance, peace and human rights.

Supporting information sources

• British Embassy in Ethiopia
• Devtracker
• figures in this publication drawn from recently available UN, IMF, and World Bank data as well as data and information held by the FCDO

1. Based on recent figures drawn from UN, World Bank and IMF sources at time of writing (May 2023) ↩

2. In support of the UK’s recently published Global Health Framework ↩

3. Spending estimates represent our best estimates at time of writing and are subject to change. ↩

4. Between 2017 to 2021 the ‘imputed’ or estimated UK share of multilateral ODA spending in Ethiopia averaged just under £200 million. ↩