The African Development Bank (AfDB), through the African Development Fund (ADF), has approved a $4.3 million grant to fund capacity building within Ethiopia’s finance ministry.

It is understood that the bank, through the grant, aims to assist the country tackle declining growth and other economic challenges.

AfDB said in a statement that the grant will support capacity strengthening of the government of Ethiopia in research and policy analysis, underpinned by a well-managed public investment programme.

‘It will support Ethiopia’s goal of developing a cadre of government staff with stronger capacity in research as well as policy analysis and formulation to facilitate the implementation of the country’s ten-year development plan and homegrown economic reform agenda’, the statement on the bank’s website read.

‘The project will support capacity strengthening of officials in the Ministry of Finance, the National Bank of Ethiopia, Ministry of Development Planning and the recently established Capital Markets Authority’.

Ethiopia has recorded robust economic growth over the last decade. However, this expansion is under risk due to emerging macroeconomic challenges.

Gross domestic product grew at an average of 7.8 percent annually between 2016 and 2021, compared to the average of 10.2 percent annually recorded between 2011 and 2015.

Also, the Covid-19 pandemic, conflict and a desert locust invasion further slowed growth from 8.2 percent in 2019 and 2020 to 6.3 percent in 2020 and 2021.

In addition, the Russia-Ukraine war and associated sanctions have had adverse impacts, resulting in higher prices for fuel, wheat, and cooking oil.

Photo source: David Stanley