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European Union External Action

Ethiopia and the EU

The relations between the EU and Ethiopia are founded on the Cotonou Agreement, its Articles 8 to 13 define the bilateral political dialogue between the two parties, as well as in a set of other conventions and political commitments. The EU and Ethiopia look back on 40 years of constructive bilateral relations in areas as diverse as development cooperation, trade and economic development, consolidation of democratic institutions, regional peace and security and migration. Ethiopia is one of the EU's most important partners on the African continent, active in regional peace and security as well as on thematic international debates such as climate change. Against this background, in a Joint Declaration published on 20 October 2015 on the occasion of her visit to Addis Ababa, the High Representative / Vice President (HRVP) Federica Mogherini and Ethiopian Minister for Foreign Affairs Dr. Tedros Adhanom, stated the intention to "start a regular dialogue at foreign minister level, steering political dialogues that will include new areas of common interest and more regular meetings at ministerial level" under the title "Strategic Engagement".

In this engagement the two sides also affirm their commitment to the fundamental principles of sustainable development, democracy, human rights, good governance and the rule of law; regional cooperation and integration. Moreover, the two sides intend to enhance their cooperation to maintain the dynamic economic growth and the ambition of Ethiopia to join middle income countries on the basis of green and inclusive economic growth.

Joint programming

There are presently 21 EU Member States represented in Ethiopia, in addition to the EU and like-minded partners, such as Norway and Switzerland, constituting the EU+ group. In recent years, the EU+ group disbursed annually around € 1 billion of ODA, equivalent to roughly a quarter of total external aid to Ethiopia and about 10% of the country's annual budget. In this context, joint programming is not only about aid effectiveness, but most importantly, has a strong political and EU dimension: EU+ joint programming in Ethiopia could be considered as a deliverable and, at the same time, one of the instruments in support to the implementation of the wider EU-Ethiopia strategic engagement.

Ethiopia has been, since 2010, a pilot country for the fast-track initiative on division of labour and one of the aid effectiveness pilot countries since 2011. The EU institutions along with the 20 EU Member States then represented in Ethiopia and Norway (EU+) jointly analyzed the national development plan of Ethiopia for the 2011-2015 period (GTP) and signed in 2013, a EU+ Joint Cooperation Strategy for Ethiopia, one of the first joint documents in the ACP world. A 3-year roadmap 2013-2015 was implemented, including identification of several pilots in the areas of resilience, nutrition, health, migration, gender and green sector, where joint strategic analyses, mappings and eventually operations were prepared. Further alignment of national strategies with the Ethiopian programming cycle and increase the use of the Government aid information system, as well as publications of a EU-Ethiopia cooperation blue book and a joint calendar featuring EU+ cooperation with Ethiopia were also carried out. Eventually, the delegation of EDF funds to EU Member States was considered for the first time ever in Ethiopia among the NIP implementation modalities, with a view to facilitating increased division of labour. External consultants are assisting the process since 2015. An update of the mapping of EU Member States cooperation positions in Ethiopia, their willingness and ability to forward the process, has been recently carried out; seven priority sectors of cooperation have been identified and three strategic areas (jobs creation, governance and natural resources) for enhanced joint monitoring and assessment of results. The EU+ joint programming document is expected to be concluded and signed in 2016.

The European Union supports the efforts of Ethiopia to eradicate poverty, to foster inclusive and sustainable economic, social and environmental development while promoting human rights, democracy and other elements of good governance. Through development aid, it further contributes to the advancement of common goals though increased cooperation and dialogue with Ethiopia in the main areas of mutual interest, as identified in the EU-Ethiopia strategic engagement. Furthermore, European solidarity is being effectively and visibly ensured through rapid help and relief assistance to Ethiopian populations affected by crises.

EU support to Ethiopia exceeds € 2 billion for the period 2015-2020 and rests in five pillars:

  1.  Programmable development aid from the European Development Fund (currently 10th and 11th EDF), amounting to more than € 1 billion in programmes under implementation or in preparation (the largest EDF envelope in the ACP group) for the period 2015-2020 in thirteen areas of concentration;
  2. Non-programmable development aid from the different EU thematic instruments, such as civil society, local authorities, democracy & human rights, stability & peace, global funds and diverse facilities;
  3. Projects funded by the EU Trust Fund addressing the root causes of irregular migration, displacement of population and instability (Horn of Africa window);
  4. Humanitarian assistance managed by the European Humanitarian Office (ECHO), in areas of emergency aid, refugees support and resilience;
  5. Concessional loans of the European investment Bank (EIB) in water, energy and credit line facilities;

The EU endeavours to increase cooperation effectiveness and to honour its aid effectiveness commitments in Ethiopia. The Delegation is achieving the strategic objective to multiply the cooperation implementing modalities and use more efficient and effective ones, promoting the use of budget support and operations implemented through government channels. At the same time, blending of grants and loans and delegation of EDF funds to EU Member States are being considered for the first time ever in Ethiopia, with a view to facilitating increased division of labour. The engagement of the Delegation in the development partners' coordination and harmonisation process is strong, as proven by the continuous participation in the DAG (Development Assistance Group) coordination structures at different levels: Executive Committee, High Level Forums, Heads of Agency meetings and in practically all the different sector working groups, chairing a number of them.

Read more about Development and Cooperation

Sustainable development is a prerequisite for poverty eradication, social development and the creation of an inclusive, strong and diversified economy. The EU and Ethiopia engage to support and reinforce mechanisms aimed to promote decent work and the economic and social integration of vulnerable populations, paying particular attention to situations of extreme poverty and social exclusion. The two sides also look at ways of maximising the social and economic impact of development cooperation while ensuring sustainability, including through improved alignment of EU donors with the Growth and Transformation Plan II and Ethiopia's Climate-Resilient Green Economy Strategy. The EU works with Ethiopia to exchange information and best practice on issues related to education, vocational education and training and capacity building.

The EU Delegation works to facilitate the participation of greater numbers of Ethiopian students, university staff and researchers through Erasmus+ and Marie Skłodowska-Curie Actions, and to continue to work on the mutual recognition of academic degrees. The EU and Ethiopia promote the importance of science and technology, research and development, information communication technology and the transfer of know-how as a basis for sustainable development. The EU works to help create a strong economy that rests on its functional and structural diversification, the improvement of productivity and competitiveness, the promotion of Micro, Small and Medium-sized enterprises (MSMEs), an enhanced qualification of the human capital and a well-trained labour force who has the skills that are required on the labour market. The EU and Ethiopia also work together on private sector development and the improvement of the business climate.

Ethiopia is experiencing its worst drought in 50 years following two failed rainy seasons. Twenty % of the population is affected and more than 10 million people are in need of emergency assistance. This number could increase if the current spring rains are not providing some relief. Ethiopia is one of the countries most affected by the El Niño phenomenon, which has caused extreme weather conditions across the African continent.

In the most affected areas, 50 to 90% of crops were lost and hundreds of thousands of livestock have died leading to food insecurity, malnutrition and diseases. Nearly 550 000 people are internally displaced as a result of clashes over scarce resources, floods and more recently the worsening drought.

With 732 000 refugees, Ethiopia hosts the most refugees in Africa including Eritreans, Somalis, Sudanese and South Sudanese. The latter make up the largest refugee population, with many people fleeing the on-going conflict in neighbouring South Sudan. The European Commission provides assistance in all 24 refugee camps.

In 2016, the European Commission (ECHO and EU) have so far allocated € 190 million for immediate response to the El Niño-induced drought, and to support the refugees and internally displaced. In addition, € 100 million is allocated for the longer term resilience building in specific vulnerable areas and to increase the self-reliance of long term refugees.

Read more about Humanitarian aid in Ethiopia

Ethiopia and the EU share a vision for a peaceful, safe and stable Horn of Africa region, which is a precondition for the political, economic and social development of the region as a whole. Given Ethiopia's crucial stabilising role in the Horn of Africa, the EU and Ethiopia share information, perspectives and lessons learned, and consult each other on issues of common interest, such as conflict prevention and resolution in the Horn of Africa and the broader region; the role of IGAD; the African Peace and Security Architecture (APSA) and the African Peace Facility (APF). 

Countering terrorism and violent radicalisation

Ethiopia and the EU share a vision for a peaceful, safe and stable Horn of Africa region, which is a precondition for the political, economic and social development of the region as a whole. Given Ethiopia's crucial stabilising role in the Horn of Africa, the EU and Ethiopia share information, perspectives and lessons learned, and consult each other on issues of common interest, such as conflict prevention and resolution in the Horn of Africa and the broader region; the role of IGAD; the African Peace and Security Architecture (APSA) and the African Peace Facility (APF). 

 

The EU-Ethiopia dialogue on migration provides an effective tool to implement Article 13 of the Cotonou Partnership Agreement, the Common Agenda on Migration and Mobility (CAMM) signed in Valletta on 11 November 2015, and to implement and follow up the five priority domains of the Valletta Action Plan. The priority areas are: (1) better organising legal migration and fostering well managed mobility; (2) preventing and combating irregular migration and addressing smuggling and trafficking in human beings, including support for the victims and on return and readmission; (3) maximising the development impact of migration and mobility; and (4) promoting international protection of those in need of it. This also includes support to the large refugee  population in the country and the host communities. 

The EU believes that Ethiopia's sustainable development should be underpinned by continuous democratisation process. In this regard, Ethiopia and the EU are committed to the promotion of good governance, human rights and fundamental freedoms, as well as to the fight against corruption at the national, regional and international levels. Recognising that democracy is work in progress, the EU continues to work towards the consolidation of democratic governance and to the building up of a vibrant civil society, including social partner organisations, working together to address some vital areas of governance and human rights, including the reinforcement of a democratic political culture; freedom of the press and of association; protection and promotion of cultural diversity; to promote the development of relevant institutional capacity; international human and labour rights instruments and their implementation; transparency and accountability; fight against corruption; adequate social protection systems and social dialogue; as well as gender equality and women empowerment. The EU also works with civil society to encourage reciprocal accountability and to improve dialogue with the Government. 

Scientific predictions show that Ethiopia is and will be affected by climate change through: droughts, floods, strong winds, heat waves, frosts, pests and diseases affecting livelihoods and health of the people, livestock and the natural ecological systems. Climate change is exacerbated, among other things, by demographic pressure, poverty, natural resources degradation and lack of infrastructure. The impact of climate change is already being felt in Ethiopia.  Droughts and floods are common phenomena in Ethiopia, occurring with a frequency of every 3 to 5 years. Since the 1980s, Ethiopia has witnessed 8 national and various regional droughts and more than 40 floods. In many regions of the country, the frequency of these events has increased. Particularly the Northern part of Ethiopia has seen increasing temperatures and declining rainfalls.

Agriculture is the backbone of Ethiopia's economy on which most of the country's livelihood depends. It is also a source of raw materials for the industry sector. Yet the agriculture sector is most vulnerable to climate change since it is rain fed agriculture, relying entirely on traditional technologies.  The agriculture sector is also highly affected by land degradation resulting from human and livestock pressure and improper management practices, etc.

The Growth and Transformation Plan (GTP II) envisages a rapid economic growth to bring Ethiopia to the level of middle income countries by 2025 with a net zero GHG emissions. Improving agricultural productivity via agricultural diversification and intensification, and gradually moving into agro-industrial development path way is the general direction.  This ambitious economic growth in the country is in the short to medium term challenged by chronic vulnerability to climate and environment shocks, which make joint action between Europe and Ethiopia even more important. In this regard, implementing the country's Climate Resilient Green Economy Strategy, which aims at addressing the climate change challenges while pursuing sustainable economic growth, is a key priority for the government and the European Union.

The EU supports the Government on these sectors through different programs related to sustainable land management, conservation of natural resources, biodiversity, participatory forest management, climate change, etc.  . 

The EU promotes European culture and inter-cultural dialogue as a core part of EU Public Diplomacy, working hand in hand with the EU Member States and cultural institutes. In Ethiopia there is a four member European Union National Cultural Institutes (EUNIC) cluster made up of the "British Council", the French "Alliance Francaise", the German "Goethe Institute" and the "Italian Cultural Institute". A programme of European and Ethiopian cultural event, including a European Film Festival and a music festival are held annually. The EU Delegation reaches out to strategic audiences by organising a wide range of events and activities aiming at fostering engagement in two-way dialogues with young people, political figures, media, academia, business and civil society. These dialogues aim at promoting and explaining EU policies, raising awareness about EU issues and concerns and the importance of partnership, strengthening bridges by cultivating mutual respect and understanding based on shared values and interests.

The European Investment Bank (EIB) is the European Union's bank. We are the only bank owned by and representing the interests of the European Union Member States. We work closely with other EU institutions to implement EU policy. As the largest multilateral borrower and lender by volume, we provide finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of our activity is focused on Europe but we also support the EU's external and development policies. The opening of a new office in Addis Ababa in June 2016 illustrates the importance of both Ethiopia and the African Union for the EIB.

Our current modalities are:

Lending: The vast majority of our financing is through loans, but we also offer guarantees, microfinance, equity investment, etc.

Blending: Our support helps us unlock financing from other sources, particularly from the EU budget. This is blended together to form the full financing package.

Advising: Lack of finance is often only one barrier to investment. We can help with administrative and project management capacity which facilitates investment implementation.

We support projects that make a significant contribution to growth and employment in Europe. As part of our counter-cyclical approach, our activities focus on four priority areas:

  • Innovation and skills
  • Access to finance for smaller businesses
  • Environment and climate
  • Infrastructure

We raise the bulk of our lending resources on the international capital markets through bond issues. Our excellent rating allows us to borrow at advantageous rates. We thus are able to offer good terms to our clients. We generally finance one-third of each project but it can be as much as 50. This long term, supportive financing often encourages private and public sector actors to make investment which might not otherwise be made. All the projects we finance must not only be bankable but also comply with strict economic, technical, environmental and social standards. Our corps of 300 engineers and economists screens every project, before, during and after we lend. We work hard to be accountable to EU citizens.

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