- Population growth
- 2.50 %
- GDP per capita
Italian Cooperation in the country
Development Cooperation relations between Italy and Ethiopia dates back to 1976, when the first bilateral agreement was signed for the implementation of development projects. From the second half of the 80’s until today, Ethiopia is one of the priority countries in the Italian Cooperation strategy and recipient country of a significant share of the Italian support, mainly through bilateral and multi-bilateral channels, but also through the multilateral one and through contributions to Civil Society Organizations.
The Italian commitment can be easily understood in light of the historical and economic ties that link our country to Ethiopia, as well as the strategic importance of Ethiopia in the geopolitics of the Horn of Africa, since it represents an important factor of stabilization.
On September 15th, 2017, our country confirmed its commitment to the socio-economic, sustainable and inclusive development of Ethiopia by signing the new 2017-2019 Cooperation Framework.
Ethiopia is experiencing a period of steady economic growth, mainly due to public investments and to the greater supply of agricultural goods and services. This allowed the country to significantly reduce its level of poverty. The Ethiopian economy remains predominantly based on Agriculture, which contributes to GDP for 36.7% and employs 77.3% of the labour force. Industry contributes up to 16% to GDP (and employs 7.5% of labour force) while the Services Sector represents 47.3% of the GDP and occupy 15.2% of the labour force.
In recent years, public spending for basic social services and pro-poor interventions have increased significantly. The percentage of people living below the poverty line has decreased in a considerable way and universal primary education has been almost reached. Maternal mortality decreased from 676 deaths every 100,000 pregnancies, in 2011, to 412 deaths every 100,000 pregnancies, in 2016. Even the coverage of drinking water supply in the national territory went up from 59% to 63.1%. Significant results have also been achieved in the nutritional field: the prevalence of children under the age of five suffering from chronic malnutrition has decreased from 67% to 40%, with positive repercussions also on the infant mortality rate.
Despite these progresses, the Human Development Index still ranks Ethiopia at 174th place out of 188 countries. Agriculture, heavily linked to the rains, is still particularly vulnerable, especially in an era marked by the negative effects of climate change. Moreover, although the young average age of Ethiopians may be a resource for the future (half of the population is under 14), the labor market cannot absorb all the potential workers, especially young people and women. Finally, Ethiopia is, at the same time, a country of transit, destination and departure of irregular migrants, also hosting a large community of refugees.
Recently, the Ethiopian Government has implemented various reforms to improve the provision of basic services and strengthen local participation in decision-making processes. It also promotes women's empowerment, both at the economic level, offering them economic opportunities, and at the political level, with larger female representation in decision-making bodies.
Strategic development document in the country
The Growth and Transformation Plan II (GTP) 2015/16 - 2019/20, the five-year action plan of the Ethiopian Government, which follows the Growth and Transformation Plan 2010/11 - 2014/15, reaffirms the Ethiopian ambition to become a middle-income country by 2025, pursuing rapid, broad and inclusive growth. In order to achieve this goal, Ethiopia intends to promote industrial growth and enhance the domestic and foreign private sector to achieve a real structural transformation of the economy.
In this context, the manufacturing sector, and in particular the labor-intensive light industry aimed at exporting, will play an increasingly dominant role in economic growth and job creation. Ethiopia expects sustained GDP growth (11%) for the next few years, maintaining macroeconomic stability (in particular the control of inflation and debt) and the development of economic policies (improvement of the business climate, development of small and medium-sized enterprises) and fiscal policies (with a target for revenues as 17% of GDP).
With regard to social development, in the coming years the GTP II aims at guaranteeing quality and equity in the provision of basic services, identified as education, health, water and sanitation, agriculture and rural roads; reducing regional, gender, education and income gaps.
Finally, the Ethiopian development plan intends to consolidate the mechanisms of public participation (citizens are conceived as owners and beneficiaries of the results of development) and to strengthen the democratic stability of the country.
The Italian strategy and the areas of intervention
The 2017-2019 Ethio-Italian Cooperation Framework, which envisages initiatives for a total amount of 125 million Euros, identifies three priority macro-sectors of intervention, with two cross-cutting components promoting gender equality / female empowerment and nutrition. The total resources allocated for the implementation of the Cooperation Framework is divided between 85 million Euros financed through concessional loans and 40 million Euros as grant. It represents a 25% increase in resources, compared to the previous 2013-15 Cooperation Framework.
The first macro-sector is agro-industry. It includes activities to improve agro-pastoral supply chains, development of industrial manufacturing capacity (agro-industry and leather) and strengthening resilience in arid and semi-arid areas.
The second macro-sector concerns access to basic services. It includes interventions in the water and sanitation, in health and nutrition and activities aimed at protecting the environment and managing natural resources in a sustainable way.
The third macro-sector aims at stemming irregular migration, through the creation of innovative initiatives for job creation and complementary to the Stemming Irregular Migration initiative in Northern and Central Ethiopia - SINCE funded by the EU Migration Trust Fund and implemented by Italy. The third macro sector also promotes good governance in the country through institutional support for the strengthening of statistical capabilities in collection and analysis of data and for the development of results-oriented policies based on reliable data. It also strengthens the institutional capacities of the regional vital registration offices in Ethiopia.
Beyond specific initiatives aimed at women's empowerment and nutrition, 5% of the budget of each initiative of the Cooperation Framework will be focused on activities for fostering gender equality and women empowerment.
The Cooperation Framework prefers a multi-sector approach, aimed at promoting the concept of integrated development. At geographical level, interventions are concentrated in some priority regions (e.g. Oromia, SNNPR and Afar). Some initiatives represent the second phase of successful recent programs (in the field of agricultural/agro-industrial development and in the provision of basic services), while others face new priorities, such as mitigation of the negative effects of climate change, by strengthening the resilience of the most vulnerable communities.
In implementing these initiatives, innovative partnerships will be promoted. In this regard, the AICS office in Addis Ababa will support the traditional collaboration with the Ethiopian Line Ministries and a greater involvement of the Public Executive Agencies. Furthermore, the strategic approach convoys its effort on a limited number of initiatives, however with significant financial allocations, for both an effective concentration of aid and an efficient management of activities.
Italian Cooperation has also established a fruitful dialogue both with civil society organizations and with the private sector.
The Italian Organizations of Civil Society (CSOs) play a priority role in Ethiopia, in defining the cooperation strategy of the AICS office in Addis Ababa and in managing development initiatives in the country. The widespread presence of Italian CSOs in the territory allows the implementation of initiatives aimed at improving the conditions of local populations, in collaboration with local partners and authorities, in various sectors such as Health, WaSH (Water Sanitation and Hygiene), Education, Rural Development. Through the direct management of funds, the Italian Cooperation entrusts the implementation of numerous development and humanitarian initiatives to various Italian CSOs.
Traditionally, the presence of the Italian private sector in Ethiopia is also significant, as proved by the existence, in Addis Ababa, of the Italian Business Community Association – IBCA. Italian operators, resident in Ethiopia, are over 200, engaged in small and medium-sized businesses, under Ethiopic law, and they operate mainly in the following sectors: trade, construction, mechanical, electromechanical, metalworking, footwear, leather goods, tourism, automotive components, typographies, carpentry, catering, plastics, agriculture and breeding. The main Italian companies operating in Ethiopia are: IVECO, present in the country with a joint venture between FIAT and the Ethiopian Government, called AMCE (Automotive Manufacturing Company of Ethiopia), SALINI Costruzioni, SIEMENS ITALIA, SELEX, and ENEL.
Alignment with the local government strategy and harmonization with donor community interventions
The quality of coordination between donors in Ethiopia is outstanding. Since 2004, the main forum for exchange and discussion between donors in the country is DAG (Development Assistance Group), which includes 30 bilateral and multilateral development agencies working with Ethiopia. It was created in 2001 with the aim of greater effectiveness in delivery of aid and in strengthening political dialogue with the Ethiopian Government. DAG is coordinated by two co-chairs and is governed by a 9-members Executive Committee (USAID, United Nations, DFID, World Bank, EU, African Development Bank - as permanent members - and Italy, Germany and Norway as non-permanent members). Italy is a non-permanent member of the Executive Committee for the biennium 2017-18. It also participates in the Effective Development Taskforce, a working group that promotes the implementation in Ethiopia of the global partnership for effective development cooperation. Finally, in Ethiopia, there are several Sector Coordination Forums, aligned with the intervention pillars of the Ethiopian five-year development plan, the Growth and Transformation Plan II - GTP II 2015/16 - 2019/20.
Italy, although not one of the main donors of the country, has the objective of working with high quality standards and with the highest level of participation and integration in the framework of coordination mechanisms. Italian Cooperation has played an active role in the exercise of European Joint Programming. Joint Programming is aimed at ensuring the harmonization of the cooperation strategies of the EU member States in Ethiopia and their alignment with the GTP II, the predictability of aid and transparency, avoiding overlapping or fragmented interventions, through a process of locally defined division of labor. Following a joint analysis of the Ethiopian social, economic and political context and of the national development plan, three priority intervention clusters were identified, with three cross-cutting sectors, such as gender, nutrition and migration, in which they intend to promote joint initiatives and/or a common approach, in dialogue with the government. The three priority clusters are:
- Job Creation;
- Management of natural resources;
- Good Governance.
Goals and expected results
The ultimate goal of the Italian Cooperation in the country is to support the Ethiopian Government to realize its sustainable and inclusive economic-social development agenda and become a middle-income country by 2025, in coordination with the donor community and promoting the “whole of country” approach.
In line with the priority sectors of the Ethio-Italian Cooperation Framework 2017-19, Italy intends to pursue these specific objectives:
- Contrast the root causes of irregular migration flows.;
- Support the efforts of the Ethiopian Government to improve the quality, productivity and competitiveness of the productive sectors (agriculture and manufacturing industry, in particular the labor-intensive light industry for export);
- Offer sustainable long-term solutions to the structural problems affecting the pastoral and agro-pastoral communities in the arid and semi-arid areas of the country;
- Ensure universal access to basic services and improve quality and equity in their delivery with consequent progress on the human development index;
- Improve the nutritional situation in the country;
- Promote women and youth empowerment, ensure their participation in development processes and enable them to equally benefit from development outcomes;
- Promote good governance and strengthen institutional capacities at the federal and local levels.
Therefore the expected results are:
- The business climate is improved and agricultural productivity is increased with positive repercussions on rapid industrialization process, dynamic expansion of market and exports;
- The resilience of local communities residing in areas regularly affected by drought and climate change is strengthened;
- Access to basic quality services, in particular water and sanitation, health and education is increased and geographical inequalities and gaps between rural and urban areas in the provision and quality of services are reduced;
- Chronic malnutrition (stunting) to 20% is reduced by 2020 and eliminated by 2030;
- New economic and employment opportunities, especially for women and young people, are created also thanks to a better offer of vocational training and market-oriented activities, with a consequent reduction in irregular migration phenomena;
- Good governance in the country is reinforced through institutional support for the improvement of statistical capacities at federal and regional level;
- Effective female participation in the processes of socio-economic development and democratization in the country is granted.
Aid in numbers
Italian development projects
Total funding used
What is it spent for?
The purpose/sector of destination of a bilateral contribution should be selected by answering the question “which specific area of the recipient’s economic or social structure is the transfer intended to foster”. The sector classification does not refer to the type of goods or services provided by the donor. Sector specific education or research activities (e.g. agricultural education) or construction of infrastructure (e.g. agricultural storage) should be reported under the sector to which they are directed, not under education, construction, etc. read more close
By means of?
The typology identifies the modalities that are used in aid delivery. It classifies transfers from the donor to the first recipient of funds (e.g. the recipient country, a multilateral organisation, or a basket fund). It does not track the end uses of the funds, which is addressed in the sector classification and to some extent through the policy objective markers. read more close