The Ethiopian Construction Works Corporation (ECWC), one of the state-owned enterprises under Ethiopian Investment Holdings (EIH), has overhauled its leadership and board structure, with the reshuffle marking the latest in a series of corporate reforms across government-owned firms.

The decision includes the replacement of the corporation’s Chief Executive Officer and all board members; a move that officials say follows a comprehensive review of the company’s governance and financial standing.

Yonas Ayalew, who led the Corporation for seven years, has been relieved of his position and appointed as a state minister under the Office of the Prime Minister.

According to documents reviewed by The Reporter, the changes were made under the direction of EIH, which oversees the performance and management of state-owned commercial entities.

The board overhaul also removed former chair Aisha Mohammed, minister of Defense, and her deputy Alemu Sime (PhD), minister of Transport and Logistics.

Other outgoing board members include Abdissa Yadeta, head of Secretariat at the Transport Ministry; Abreha Adugna (PhD), a state minister of Water and Energy; Lemma Gudissa (PhD), deputy director for academic affairs at the Ethiopian Civil Service University; Afework Nigussie, deputy manager at the Information Technology Park Corporation; and Muluneh Aboye, vice president for risk and compliance at the state-owned Commercial Bank of Ethiopia.

Their replacements include Yetmgeta Asrat, a state minister at the Ministry of Urban and Infrastructure Development, who now chairs the board; Berhanu Tesfaye from the Prime Minister’s Office; Helina Belachew, CEO of the Ethiopian Railway Corporation; and Wubshet Jekale, a professor at Addis Ababa University.

Additional appointments have been made from the audit, finance, and investment sectors, including five members drawn from EIH and independent institutions. One-third of the new board now represents independent bodies, according to officials.

Robel Tsegaye, former deputy CEO of the Ethiopian Engineering Corporation, has been appointed as ECWC’s new chief.

Brook Taye (PhD), Chief Executive Officer of EIH, confirmed the board and management reshuffle was carried out as part of a broader reform plan. Speaking to The Reporter, he said the change reflects the end of a major institutional restructuring phase led by outgoing CEO Yonas.

“Yonas has been serving for about seven years. He has now completed that assignment and has been transferred to another post,” Brook said. “We are very, very grateful to him.”

Brook recalled that when Yonas assumed the leadership of ECWC, the institution was in financial and administrative distress.

“When Yonas came in, the Corporation was in a very difficult state. It had serious corporate governance problems, was burdened with huge debts, and was entangled in unresolved and outstanding issues,” he told The Reporter. “He managed to correct those issues, set the institution on the right path, and now the company is profitable.”

The EIH head explained that despite its improved profitability, ECWC’s previous debt exposure had depleted its capital base. As a result, the Corporation received government approval for recapitalization, allowing it to begin paying dividends to both the holding company and the government by end of current fiscal year.

ECWC is one of the state-owned developers involved in large public construction projects. Most recently, it signed contracts valued at 67 billion Birr as part of the Chaka Housing Development Project, a 72-billion-Birr public-private partnership set to construct more than 4,100 housing units in Addis Ababa.

The project, initiated in July 2025, includes multiple private and public developers, such as Ovid Real Estate, ICE Housing Development Consortium, and ECWC. It is implemented through a 70/30 financing structure, with ECWC handling a portion of the civil works on 24 hectares of land.

According to the Ministry of Finance, ECWC was selected for the project due to its prior experience completing eight residential buildings valued at more than 800 million Birr.

“It was selected for this project because of its experience and partnership with private housing developers,” Abebe Gebrehiwot, head of the PPP department at the Ministry of Finance, said at the time.

However, ECWC has also faced criticism for project delays. In January 2025, The Reporter cited correspondence from the Ethiopian Engineering Corporation (EEC) noting that ECWC had finalized less than a fifth of a 65-kilometer road project linking Alaba and Wato despite taking more than double the contractual period. EEC attributed the delays to management inefficiencies, while ECWC representatives cited right-of-way issues and denied resource shortages.

Despite such challenges, EIH now lists ECWC among its profit-making subsidiaries. The corporation is expected to make its first dividend payment to the holding company and the federal government by the end of the current fiscal year, according to Brook.

“The Corporation will begin paying dividends—that is the tangible measure of reform,” he said. “When a state enterprise pays back into the system, it demonstrates sustainability, accountability, and operational maturity.”

EIH executives say oversight mechanisms have been strengthened, and a third of the Corporation’s new board members now come from independent bodies.

EIH expects the new CEO, Robel Tsegaye, to continue down the reform path. Robel, who previously served as deputy CEO of the Ethiopian Engineering Corporation, is credited with building its construction division from scratch.

Data obtained from EIH indicates that under Robel’s watch, EEC reported 8.9 billion Birr in revenue for the 2024/25 fiscal year, exceeding its annual target by 17 percent and the previous year’s figure by 81 percent.

It reportedly completed 111 design projects, 272 supervision and contract administration assignments, and 53 construction projects during the reporting period.

The long-standing dispute, according to inside sources, boiled over when ECCSA demanded that AACCSA pay monthly rent for the offices it leases within the building, which also houses the offices of seven other chambers of commerce from around the country.

AACCSA and the other tenant chambers had been subject to a discounted rate (40 percent of market value) for a year, following a decision from the ECCSA board to begin charging rent in 2024.

However, AACCSA’s inability or refusal to pay rent has forced the Ethiopian chamber to seal its offices and bar its staff from entry, according to Sebsib Abafira, who was elected ECCSA president in July 2024.

He alleges that AACCSA violated the terms of its lease agreement with ECCSA, and justified his organization’s move to seal the office space as a valid legal decision.

ECCSA decided to begin charging rent in an attempt to cover costs associated with administering the building, including taxes and other expenses, according to the President. Prior to the move, AACCSA had no obligation to pay rent on the basis of a past agreement between the leadership of the two chambers.

Sebsib says the Addis Ababa Chamber and the other chambers housed within the property had been paying their rent regularly before AACCSA allegedly decided to cease payments.

A source who has served on the boards of both chambers told The Reporter that AACCSA’s objection to paying rent stems from a past decision from the Ministry of Trade granting ECCSA property rights but obliging it to accommodate other chambers of commerce within the building.

The long-serving board member views the dispute as a stain on the reputations of both chambers, and criticizes ECCSA’s unilateral decision to begin charging rent as being misguided.

The dispute with ECCSA comes as a blow to the Addis Ababa Chamber, whose plans to erect its own headquarters in the capital have made little progress.

In 2013, AACCSA unveiled the design plans for a headquarters its leaders estimated would cost upwards of 100 million Birr to construct at the time. However, a plot of land allotted to the Chamber has since been reclaimed by the Addis Ababa City Administration owing to a failure to begin construction on time.

Sources say the Chamber has filed a request for another plot and is awaiting a response from the City Administration. In December 2023, Chamber leadership told The Reporter that the planned headquarters project was expected to have a price tag in the billions of Birr.

In a letter issued on October 29, 2025, the Authority instructed no less than 100 domestic and international civil society organizations to register their assets with its offices before November 23.

Among the organizations cited in the notice are Mekedonia, Deborah Foundation, the Ethiopian Orthodox Church Development and Christian Aid Commission, Catholic Aid, Full Gospel Believers Development Commission, and the Amhara Development Association.

The letter, signed by Deputy Director Fasikaw Molla, emphasized that CSOs have the legal right to own, manage, and transfer assets under the Civil Society Organization Proclamation.

However, it states that the Authority is also mandated to monitor and regulate these organizations, which includes maintaining a record of their assets to ensure that public resources are used for their intended social purposes.

The Authority argues that the lack of comprehensive data on the resources within the civil society sector necessitated this registration initiative. 

“Gathering accurate information will enable the Authority to strengthen transparency and accountability in the sector,” it reads.

Meskelu Menberu, head of fund and asset management at the Authority, told The Reporter that the registration process will proceed in phases, with the largest CSOs expected to declare their assets in the first phase.

While CSOs are already required to report their activities, financial records, and asset registry annually under the provisions of the CSO proclamation, Meskelu says there is a need to compile more in-depth information than the details provided in the annual report.

“We’re focusing on CSOs with [greater] capacity first,” he said, citing that 30 local CSOs and 70 international organizations are obliged to register their assets by next month.

An additional 100 CSOs will be expected to register before the end of the fiscal year, according to Meskelu.

The first batch of CSOs are expected to verify their assets and submit the information to the Authority via email before the deadline in three weeks’ time.

Meanwhile, officials at the Ministry of Justice are busy drafting an amendment to the CSO proclamation, which was only ratified by Parliament six years ago. Sources say they seek to revise a dozen key articles concerning registration procedures, daily operations, accounting and reporting standards, and administrative measures.

Officials at the Authority and the Ministry claim the revisions are necessary to enhance regulatory efficiency and ensure that CSOs operate in alignment with national legal and financial accountability frameworks.

However,  the proposed amendment follows more than a year of heightened government pressure on CSOs in Ethiopia, which has prompted international watchdogs and domestic observers alike to raise the alarm over what they see as an increasingly narrow civic space in the country.

In July 2024, the Authority announced its decision to revoke more than 1,500 CSO licenses for failure to meet new criteria and guidelines for registration. Less than six months later,  it suspended three prominent organizations—the Association for Human Rights in Ethiopia (AHRE), the Centre for Advancement of Rights and Democracy (CARD), and Lawyers for Human Rights (LHR)—for “lacking political neutrality.”

Two months ago, Amnesty International cautioned that “repressive” provisions in the draft amendment from the Justice Ministry could further constrict the country’s civic space.

Among them is a provision that would effectively end self-governance by allowing the government to hold a majority on the boards of CSOs. A statement issued by the watchdog also warns against provisions restricting funding for political advocacy and election monitoring, and granting the Authority the power to suspend or deny CSO registration.

The monthly publication indicates that the government raised 53.35 billion Birr from two auctions during the month, while the bulk of debt holdings remained concentrated among the Commercial Bank of Ethiopia, the National Bank of Ethiopia (NBE), and pension funds.

The bulletin, issued on October 28, 2025, provides a detailed snapshot of market activity up to the end of September and outlines the issuance plan for the second quarter of the 2025/26 fiscal year.

It reveals a domestic debt market that is both expanding and adjusting to investor sentiment favoring short-term instruments.

Two T-bill auctions held on September 3 and 17 generated total bids worth 56.46 billion Birr—almost six percent more than the 53.35 billion Birr offered, according to the report.

“Demand continued to favor short-term securities, with the 28 and 91-day bills oversubscribed due to stronger investor appetite for short maturities,” it reads.

On the other hand, the 364-day bill was significantly undersubscribed at only 36 percent, confirming a persistently weak appetite for longer tenures amid expectations of stable short term yields.

The Ministry document outlines that between July and mid-September 2025, T- bill yields displayed mixed movements across maturities, attributing the pattern to expectations of stable short-term yields and caution over longer-term commitments.

The 28-day rate fell from 15.8 percent to 12.6 percent, the 91-day rate saw a similar three-percentage-point decline to 15.3 percent, the 182-day rate dropped from 19 percent to 15.4 percent and in contrast, the 364-day rate rose from 15 percent to 20 percent.

The Ministry’s Debt Management Division observed that the bid-to-cover ratio for longer maturities has shown gradual improvement over the quarter, suggesting better alignment between issuance strategy and market preferences.

The report notes that net issuance reached 19.7 billion in the first quarter of the budget year. The government raised a total of 164.4 billion Birr through T-bill auctions over the three-month period. After deducting 126.1 billion Birr in refinanced maturities and 18.6 billion in rollovers, the net issuance amounted to 19.7 billion Birr.

The cumulative net issuance figure represents 11.4 percent of the annual net-issuance target of 172.9 billion, indicating the amount required to finance the funding gap by treasury is slightly below expectations.

Officials view the quarter’s performance as evidence of a “positive market response” and a “gradual improvement” in investor participation across maturities.

As of September 30, 2025, Ethiopia’s total domestic debt stock stood at 2.56 trillion Birr, marking another milestone in the country’s evolving debt landscape.

Treasury bonds dominated the composition, accounting for 79 percent of the total, while T-bills represented 11.3 percent. The remainder consisted of medium-term Development Bank of Ethiopia (DBE) instruments and other obligations, according to the Ministry.

The Commercial Bank of Ethiopia (CBE) held the largest share with about 43 percent of total domestic debt. It is followed by the NBE (26.3 percent) and pension funds (19.3 percent). Other financial institutions and insurers held the remainder.

Within the T-bill segment alone, 182-day and 364-day maturities made up 38 percent and 37 percent, respectively, of outstanding bills.  Pension funds and CBE each accounted for about 38.5 percent of total holdings, reinforcing their dominance as the primary buyers of government securities.

Other financial institutions accounted for 15.9 percent, insurance companies held 5.5 percent, and other institutions, including Ethiopian Investment Holdings, represented 1.7 percent, according to the report.

Looking ahead, the Ministry of Finance plans to issue 243.05 billion Birr in Treasury bills during the second quarter of the 2025/26 fiscal year—lasting from October 1 to December 24, 2025.

The planned volume is designed to refinance maturing obligations, meet domestic borrowing needs, and manage market liquidity, according to the Ministry. Auctions will continue on a biweekly basis, offering maturities of 28, 91, 182, and 364 days, maintaining the structure established in the first quarter.

The bulletin emphasizes predictability and transparency as guiding principles for issuance, aiming for “smooth refinancing of maturing obligations and consistent market operations.”

Ethiopia’s electoral process has long been intertwined with its turbulent political history. The 2018 political transition ignited hopes for democratic renewal, following decades of tightly controlled politics. However, those hopes have since dimmed under the weight of conflict, fragmentation, and authoritarian drift. The postponed 2021 elections—which were not held in some regions—exposed the logistical, political, and security obstacles that still haunt the country’s path toward genuine democratic governance. Today, as the next polls approach, many of those same challenges remain unresolved or have even deepened.

The foremost challenge is security. The government’s determination to hold elections nationwide collides with a sobering reality: large parts of Ethiopia remain insecure or under the shadow of conflict. In Amhara, persistent clashes between federal forces and local militias have disrupted governance and daily life. In Oromia, armed insurgencies and counterinsurgency operations continue to claim lives and displace civilians. The Somali and Benishangul Gumuz regions face intermittent instability tied to political grievances and border tensions. Meanwhile, parts of Tigray are still struggling to recover from the devastating war and its humanitarian aftermath. Conducting elections in such conditions is not simply a logistical problem—it is a matter of legitimacy and safety. Ballot boxes and voter cards mean little when citizens cannot move freely, when polling stations risk attack, or when displaced populations are excluded.

Political fragmentation and lack of consensus are also contributing factors. Ethiopia’s political class remains bitterly divided. Opposition parties are fragmented, many have faced restrictions or intimidation, and some operate in exile. Accusations of harassment, arbitrary arrests, and limited media access persist, undermining the credibility of the political process. The National Election Board of Ethiopia (NEBE), once hailed as a symbol of reform, now faces mounting criticism from opposition groups who accuse it of bias and lack of independence. Without a broad-based political agreement on the rules of engagement, the next elections risk deepening divisions rather than healing them. Institutional weakness further compounds the problem. Effective elections require functioning local administrations, professional security forces, and a judiciary capable of resolving disputes fairly. Yet many local governments are paralyzed by insecurity or political interference, while the justice system struggles with credibility and capacity. The NEBE itself faces resource constraints, logistical hurdles, and the daunting task of registering tens of millions of voters—many of whom live in areas affected by displacement or poor infrastructure. Unless these institutions are strengthened and insulated from political manipulation, the credibility of the process will be in serious doubt.

Equally serious is the erosion of public trust. Ordinary Ethiopians, weary of conflict and political instability, increasingly doubt whether elections can bring meaningful change. Cynicism is spreading as citizens see promises of reform overshadowed by violence, repression, and unfulfilled pledges. In regions where armed groups or local elites hold sway, voters may feel coerced or disempowered. If people perceive elections as predetermined or irrelevant, voter apathy could undermine participation, while contested outcomes could trigger renewed unrest.

Still, postponing elections indefinitely is not a viable solution either. Doing so risks entrenching authoritarianism and feeding the narrative that democratic processes must wait for “perfect conditions” that may never come. Ethiopia must, therefore, strike a difficult balance: upholding the constitutional timeline while ensuring that the process is credible, inclusive, and secure enough to reflect the people’s will. That balance will require both political courage and pragmatic compromise.

Meeting these challenges requires taking a host of essential, enabling steps. To begin with the government must attach priority to peacebuilding as an electoral prerequisite. National elections cannot succeed against the backdrop of open conflict. A serious effort must be made to secure ceasefires or negotiated arrangements in conflict-affected regions, allowing for safe voter registration and campaigning. Peace should not be treated as a separate track from the elections—it must be integrated into the electoral roadmap. Engaging community elders, religious leaders, and civil society organizations in local peacebuilding is sure to help reduce tensions and create minimal conditions for participation. Efforts to address security concerns can only succeed where political dialogue is revived and institutionalized. The National Dialogue Commission offers one potential forum, but it must be empowered and inclusive. Bringing together ruling and opposition parties, regional representatives, and civic groups to discuss electoral conditions, security arrangements, and confidence-building measures is critical. A pre-election political pact—covering issues like equitable media access, guarantees for freedom of assembly, and releasing jailed political party leaders/members—could go a long way toward restoring trust.

Furthermore, it is paramount to ensure the independence and strengthen the capacity of the NEBE. This includes assuring adequate funding, transparency in voter registration, and impartial recruitment of local election officials. The NEBE should collaborate closely with regional administrations, civil society, and international partners to enhance transparency and build confidence. Establishing a credible conflict-resolution mechanism for electoral disputes before the polls will also be essential to prevent post-election violence. Efforts to strengthen the electoral board need to be complimented by measures aimed at protecting civic space. A free press, active civil society, and open debate are indispensable to any democratic process. As such the government ought to refrain from using security laws to stifle dissent and instead view criticism as part of a healthy political ecosystem. Media outlets must be allowed to cover the elections freely, and civic groups should be empowered to conduct voter education, observation, and monitoring activities.

Prime Minister Abiy’s insistence on holding the 2026 elections as scheduled may reflect a commitment to constitutional continuity. But timelines alone do not define democracy—trust, fairness, and peace do. Unless Ethiopia addresses its security crises, political polarization, and institutional fragility, the upcoming elections could deepen instability rather than consolidate progress. Ethiopia stands at a crossroads: it can either turn the 2026 elections into a genuine step toward reconciliation and renewal, or it can risk repeating the cycles of exclusion and conflict that have marred its past. The choice is clear—and the work must begin now.

An investigation by the Commission of Inquiry on Tigray Genocide (CITG) has revealed the extent of the catastrophic damage to Tigray’s education system, describing a near-total collapse of learning infrastructure and human capital following the two-year war and blockade.

The report estimates that the education sector alone sustained USD 5.38 billion in damages and losses—the largest toll among all social sectors assessed.

“Education faced a near-complete breakdown with over 1.2 million children out of school, enrollment declined by more than 80 percent, and 14,000 teachers and education leaders did not return to school,” the report states.

According to the findings, schools across the region were “systematically targeted, looted, or repurposed” during the conflict that began in November 2020.

The assessment, based on data from 1,926 education institutions and 659,675 households, paints a grim picture of a once-thriving system dismantled by warfare and siege conditions.

CITG contends that learning was lost on a generational scale.

According to the document, before the war, Tigray’s education system was nearing universal coverage, with high enrollment, gender parity, and strong teacher retention. But the report documents that more than 80 percent of schools were rendered nonfunctional, with thousands of classrooms destroyed and vital teaching materials lost.

Across primary, secondary, and higher education institutions, destruction ranged from burning and looting to deliberate repurposing of classrooms for military use.

“Across all sectors, the level of damage is dominated by complete destruction, followed by high-level damage, where most losses were catastrophic and largely unrecoverable,” notes the Commission.

The report attributes 56.3percent of the educational damage to the Eritrean Defense Forces (EDF), followed by 24.6 percent to the Ethiopian National Defense Forces (ENDF) and smaller shares to Amhara forces and other groups.

While rural schools were disproportionately hit, even higher education institutions including Mekelle, Axum, and Adigrat universities suffered crippling losses of laboratories, libraries, and dormitories.

CITG also noted that teacher training colleges were not spared. These institutions suffered an estimated USD 91 million in damages, with entire campuses burned or looted.

The Commission contends that the destruction was neither incidental nor contained. It draws parallels between assaults on education and the broader pattern of attacks on civilian infrastructure.

The Commission maintains that the methodology, based on the UN-ECLAC Damage and Loss Assessment (DaLA) and UNESCO’s Damage and Risk Assessment Framework, underscores that the impacts were measured in both physical destruction and long-term service loss.

“Losses far exceed visible damage,” the report reads. “The prolonged siege and blockade lasting more than two years, led to widespread service disruptions and lasting setbacks in health, education, and cultural continuity”.

Even schools that survived the fighting faced severe constraints during the blockade: no salaries, no textbooks, no food for school programs.

Many teachers fled or were displaced. Without electricity or internet, students missed years of instruction. The Commission warns of “intergenerational setbacks” in literacy, learning outcomes, and social mobility.

“Nearly half a million households (496,030) reported not having a functional access education service in their areas, and 4.2 percent had access during siege and blockage. From the results of the study, more than three quarter of the households (78.6 percent) with at least one school-aged child (7-18) were not attending formal education in their respective areas during the time of siege and blockage,” reads the report.

The document stated that after nearly three years of protracted war, millions of children were/are now estimated to no longer be attending schools and are left without access to learning spaces.

The breakdown in education was also followed by assessments of the wider humanitarian collapse. The report’s health chapter details an almost total system failure. It noted that maternal mortality soared from 186 to 840 per 100,000 live births, immunization coverage dropped from 100 percent to 20 percent, and less than 30 percent of hospitals and clinics remained functional.

The war also erased decades of community health progress, according to CTIG.

“Only 30 percent of hospitals, 17 percent of health centers, 11.5 percent of ambulances, and none of the 712 health posts were functional,” reads the report.

With more than 5.2 million people in need of emergency food and medical assistance, children bear the brunt of malnutrition, trauma, and preventable disease compounding the educational crisis. Many students, unable to access school feeding programs, dropped out permanently, notes the Commission.

The war’s effects reached far beyond classrooms and clinics. Tigray’s cultural heritage, from ancient monasteries to archaeological museums, also suffered devastating losses. The CITG estimates USD 1.6 billion in damage to cultural and religious sites.

“Heritage sites aged centuries were destroyed, erasing cultural identity and disrupting intergenerational links,” reads the report.

The EDF was again identified as the principal perpetrator, responsible for 38 to 40 percent of the damage to churches, mosques, and historical buildings.

Social welfare institutions, too, were targeted. The report documents USD 278 million in damage to cooperatives and community-based associations such as Edir and Equb — traditional systems of mutual support that once anchored Tigray’s resilience.

Their destruction, the Commission warns, “weakened long-established social and cultural fabric… eroding trust and collective capacity for recovery”.

The Commission’s findings frame the destruction of education not merely as collateral damage, but as part of a systematic undoing of society.

It calls for international recognition of the educational collapse as a human rights issue and urges “substantial investment and capacity-building to ensure sustainable recovery and resilience across Tigray’s social system”.

Despite massive reconstruction needs, the report also identifies resilience at the community level — teachers reopening makeshift schools, parents pooling scarce resources, and local organizations documenting losses for restitution.

“Bridging this gap will require more than reconstruction, it demands justice, institutional rehabilitation, and the restoration of social trust as prerequisites for recovery and reconciliation,” the Commission concludes.

The company reports processing more than 128 million interoperable P2P transactions, which include account-to-account and wallet-to-account transfers, valued at nearly 578 billion Birr over the year. EthSwitch registered less than 120 million interoperable ATM cash withdrawals valued at 156 billion Birr over the same period.

“The landmark moment reflects not only EthSwitch’s success in driving digital payment adoption but also signifies a broader national shift toward a more cash-lite, digitally empowered economy,” wrote CEO Yilebes Addis in the company’s annual report.

When EthSwitch was established in 2011 as a share company owned jointly by commercial banks, microfinance institutions, and the National Bank of Ethiopia (NBE), digital transactions in Ethiopia were virtually nonexistent.

The firm introduced ATM interoperability five years later and followed that up with point of sale (PoS) interoperability in September 2020, allowing anyone with a payment card to use PoS machines issued by any commercial bank to conduct a digital transaction.

It was not until late 2021 that EthSwitch officially availed a national integrated payment system that allowed for the instant transfer of funds from one financial institution to another.

EthSwitch has enjoyed a consistent growth in P2P transactions in the years since. In 2021/22, the operator recorded under 2.1 million P2P transactions valued at nearly 20 billion Birr. Two years later, EthSwitch processed 49.7 million transactions valued at 271 billion Birr.

The past year was a busy one for EthSwitch. The company acquired a new 12-storey headquarters in Kazanchis and finalized the construction of a “tier-3 equivalent” data center at the headquarters of Zemen Bank, also located in the same Addis Ababa neighborhood.

The switch operator’s data was previously handled in a data center on the premises of the NBE’s headquarters.

“EthSwitch also advanced national initiatives by serving as the central integration point for the Fayda Digital ID, enabling secure, centralized authentication for the financial sector,” reads the CEO’s message.

The 2025 Rule of Law Index published by the World Justice Project (WJP) ranks Ethiopia 132nd out of 143 nations globally and highlights what it describes as a “rule of law recession” that has seen more than two-thirds of countries on the list exhibit a judicial decline over the past year.

WSJ, founded in 2006 under the American Bar Association, reports that Ethiopia’s overall rule of law score decreased by 2.4 percent in this year’s index. Regionally, it fared only slightly better, ranking 30th out of 34 countries in Sub-Saharan Africa.

The data reveals a particularly troubling performance in several areas, including the fundamental rights and ‘open government’ categories, in which Ethiopia ranks near bottom.

The report directly links these declines to “a worldwide expansion of authoritarian trends” and cites “shrinking civic space” as a key characteristic of the regression.

The non-profit found that Ethiopia is among the over 70 percent of countries where crucial freedoms have eroded.

“Freedom of opinion and expression declined in 73 percent of countries, including Ethiopia,” with similar regressions noted for freedom of assembly and civic participation, according to the report.

“An expansion of authoritarian trends is the primary force behind the rule of law recession, with deep declines in factors measuring constraints on government powers, open government, and fundamental rights,” reads the WJP report.

The integrity of checks and balances has also been seriously weakened, according to the organization.

It highlights that judiciaries are losing ground to executive overreach, with rising political interference across justice systems, a trend that includes Ethiopia. More broadly, according to the report, civil justice weakened in 68 percent of countries, reflecting longer delays and greater government interference.

Globally, the top-ranked countries are Denmark, Norway, and Finland, while Venezuela sits at the bottom. The findings underscore a heightened risk to democracy worldwide, with Ethiopia’s rankings illustrating the profound challenges it faces in upholding the rule of law for its citizens.

Ethiopia watched in incredulity last week as the European Union and Egypt launched the second phase of a seven-year cooperation program in what that the Ministry of Foreign Affairs has described as a “deeply disappointing and problematic” move by Brussels to deepen its involvement in the long-running dispute over the use of Nile Waters.

The new Multi-Annual Indicative Programme (MIP) 2021–2027 elevates Cairo as the EU’s primary partner in North Africa, linking European investment and migration policy to Egypt’s stability and energy infrastructure.

The updated programme, unveiled in Cairo earlier this week, includes additional billions of Euros in funding. Although it was presented as part of a broader regional vision linking North Africa and Europe through renewable energy, green hydrogen, and climate adaptation, its geographic scope has tilted heavily toward Egypt and touches sensitive Ethiopian interests, particularly water governance and energy trade.

A joint statement issued by Cairo and Brussels on October 24, 2025, echoed Egypt’s colonial and monopolistic claims on the Nile, with the EU appearing to take a clear position on the dispute with Ethiopia for the first time.

“Recognizing Egypt’s heavy reliance on the Nile River in a context of its water scarcity, the EU reiterates its support to Egypt’s water security and the compliance with international law, including concerning the Ethiopian Dam. The EU strongly encourages transboundary cooperation among riparian countries based on the principles of prior notification, cooperation and ‘do no harm,’” it reads.

The programme comes less than two months after Ethiopia inaugurated the Grand Ethiopian Renaissance Dam (GERD) and, according to the Ethiopian embassy in Brussels, “shows a complete disregard for the views and interests of other riparian countries.”

The embassy noted that the River Nile, shared by eleven riparian countries, cannot be treated through a bilateral framework that ignores nearly half a billion people in Sub-Saharan Africa.

“It is regrettable that the EU decided to undermine Ethiopia in a bilateral platform with Egypt,” reads the embassy’s response, accusing Brussels of adopting a “biased and hostile position” contrary to the spirit of its long-standing partnership with Addis Ababa.

Analysts speaking with The Reporter say the deal, while framed as development cooperation, carries strategic undertones that could tilt regional influence in favor of Cairo at a sensitive moment in the Horn and Nile Basin politics.

The Ethiopian statement marked one of the country’s sharpest diplomatic responses toward the European Union in recent years. It said the EU’s position contradicted international water law, particularly the principles of equitable and reasonable utilization enshrined in the UN Watercourses Convention (1997) and the Nile Basin Cooperative Framework Agreement (CFA).

 “The EU’s distorted take on international law is deplorable,” it reads, adding that the bloc’s statement runs counter to the very frameworks it has supported elsewhere in Africa.

The statement further noted that Europe’s approach ignored its own history as an observer in the African Union–facilitated negotiations on GERD—talks in which EU representatives had witnessed all parties’ concerns and interests firsthand.

A Horn affairs expert speaking with The Reporter anonymously echoed the country’s sentiments.

“What the bloc did last week was like shooting your own foot. The EU has long anchored itself as a strong ally of regional integration. How does siding with one and accusing the other about a matter of this magnitude cement its longstanding argument? It might not look like it from an outsider’s perspective but Ethiopia has many allies, especially in this continent,” the expert said.

Ethiopia’s government has spent more than a decade promoting its image as a driver of regional connectivity. GERD was marketed not merely as a national project, but as a continental one, a source of affordable electricity for the region and a symbol of African self-reliance.

The EU’s new deal with Egypt, however, pours fresh funds into Cairo’s National Water Resources Plan 2037 and irrigation modernization efforts, without reference to transboundary cooperation in the Nile Basin. For officials in Addis, this silence cuts deep.

“It is difficult to see how the EU can claim to support regional integration while financing projects that reinforce unilateral control of shared waters,” says an Ethiopian analyst who requested anonymity. “The same Europe that preaches partnership in Addis signs deals in Cairo that exclude upstream voices.”

This week, Prime Minister Abiy Ahmed appeared before Parliament and delivered an address that resonated far beyond domestic politics. The PM reiterated his administration’s “Two Waters” policy, which revolves around GERD and the Nile, maritime access, and resource sovereignty.

Abiy’s words offered a window into the country’s growing frustration.

“Our demand is not new or emotional,” he told lawmakers. “It is a question of national existence, a matter of survival.”

On maritime access, the Prime Minister reiterated that “the manner in which Ethiopia lost its access to the sea was illegal and unjust,” adding that “Ethiopia can no longer remain in the status quo of being a ‘geographical prisoner.’”

He insisted, however, that any resolution would be peaceful.

”We don’t believe that war and conflict are necessary to achieve this. That is why we have been waiting patiently for five years,” said Abiy.

Experts argue that the timing of the EU–Egypt deal appears to sharpen Ethiopia’s frustration over what officials describe as “selective engagement” by external actors.

While Egypt is portrayed as a stable partner in the Mediterranean, Ethiopia’s broader development agenda, they argue, continues to be viewed through a crisis lens.

Under MIP 2021–2027, the EU commits hundreds of millions of Euros between 2021 and 2024 to projects in green transition, water management, and economic resilience.

The plan positions Egypt as Europe’s anchor state for investment and migration control — a gateway for renewable energy trade, digital connectivity, and climate cooperation across the southern Mediterranean.

Some analysts argue that the EU issued the joint statement in an attempt to sideline Ethiopia or other riparian countries from shared resources as a result of Europe’s apparent conviction that only Egypt can offer the predictability, scale, and access it desires in a turbulent region.

To Ethiopian observers, that logic is precisely the problem. By prioritizing predictability over partnership, the EU risks alienating countries that are equally vital to Africa’s integration but less convenient to manage.

The deal’s omission of Nile Basin cooperation, in particular, is glaring. Ethiopia’s USD five billion GERD remains Africa’s largest hydroelectric project, designed to serve multiple countries through power exports.

Yet, in the EU’s water-governance portfolio for North Africa, Ethiopia is nowhere to be found.

“This is not simply a funding decision,” argues an Ethiopian water policy expert. “It’s a diplomatic statement that Europe’s engagement on transboundary resources stops at Egypt’s borders.”

The EU–Egypt partnership also extends to migration control. This is another area where Ethiopia feels its leverage slipping. The joint statement on migration and security places Cairo at the center of Europe’s southern containment strategy, tasking Egypt with managing irregular flows toward the Mediterranean.

Through this arrangement, the EU channels funding for border management, surveillance, and asylum-system development, which were priorities that once formed the core of EU cooperation with the Horn of Africa under the EU Emergency Trust Fund for Africa.

For Ethiopia, the reallocation is tangible. Between 2016 and 2021, EU migration funding helped support reintegration programs, job creation for returnees, and local development projects in migration-prone areas like Amhara and Tigray. Those channels have since dried up.

“Europe is outsourcing migration control northward,” said the Horn affairs expert. “We used to be part of the conversation. Now Egypt is the conversation.”

The shift has strategic consequences. With the EU’s attention fixed on North Africa, the Horn’s voice in shaping migration policy is fading, just as irregular flows from Ethiopia and Sudan to Libya are surging, analysts contend.

Energy cooperation is another pillar where Ethiopia’s ambitions collide with the EU’s Cairo-centric vision. Under the MIP, Europe plans to invest in Egypt’s Integrated Sustainable Energy Strategy, emphasizing renewables, hydrogen, and electricity interconnection with the Mediterranean.

Projects like the MEDUSA, a major high-capacity fiber optic initiative linking Southern Europe and North Africa, set to land in Port Said by 2027, epitomize this new alignment. Europe’s future energy corridor to Africa now runs through Egypt—not the Horn.

Ethiopia, meanwhile, has staked its economic future on becoming a renewable energy exporter, leveraging hydropower from the GERD and other dams. Officials had hoped the EU members would view the Horn as a key green-energy hub.

However, experts point out that the optics instead suggest that Europe is doubling down on existing trade corridors rather than building new ones across the continent.

“The EU talks about a green partnership with Africa, but its investments follow the same old geography, the Mediterranean first, Sub-Saharan Africa later,” said one analyst who spoke to The Reporter anonymously.

The irony is sharp. Ethiopia, whose entire development narrative rests on green growth and clean energy, now finds itself overlooked in favor of projects in Cairo.

Relations between Ethiopia and the European Union have been fragile since the northern conflict in 2020. Though ties improved after the Pretoria Agreement, tensions remain over humanitarian access, governance reforms, and accountability.

Following the peace agreement, there has been a “warming up” of relations, with high-level meetings between EU officials and the Ethiopian government. A significant development was the signing of a ‘Global Gateway’ Partnership Agreement in October 2025, which aims to boost cooperation and investment in key sectors.

While the EU suspended direct budget support to the Ethiopian government during the peak of the war, it continued humanitarian aid to the population. European aid to Ethiopia, once exceeding a billion Euros annually, has not fully recovered. Addis Ababa’s access to comparable funding mechanisms has diminished, particularly as the EU redirects attention to the Sahel and the southern Mediterranean.

Since the 2022 peace deal, the EU has gradually reinstated development financing, focusing on post-conflict reconstruction, health services, education, and food security. This includes a 240 million Euro grant under the 2024 Annual Action Programme (AAP-2024) in April 2025, and a 90 million Euro financing agreement for AAP-2025 in October 2025. These funds target development in areas such as agribusiness, digitalization, and the restoration of basic services in conflict-affected regions. 

Against this backdrop, the EU–Egypt partnership feels to many Ethiopians like a diplomatic downgrading. It contrasts sharply with the EU’s earlier role as a mediator and developmental ally during Ethiopia’s reform years between 2018 and 2020.

A senior foreign relations expert puts it bluntly: “Europe once said it wanted a strong, integrated Africa. Today, it is investing in a divided one.”

For many Ethiopians, at the heart of the matter also lies a contradiction between Europe’s rhetoric and its regional conduct. The EU’s New Agenda for the Mediterranean and its Economic and Investment Plan for the Southern Neighbourhood frame the Union as a partner for African integration, inclusive growth, and shared prosperity.

Yet, the geographic concentration of funding being overwhelmingly in North Africa reinforces rather than bridges Africa’s north–south divide, according to observers.

In Ethiopia, this is seen as hypocrisy. Officials recall how European diplomats routinely call for “African solutions to African problems.” But when it comes to the Nile, Europe funds one side’s adaptation and leaves the other’s aspirations unaddressed.

“The EU’s credibility as a promoter of regional integration is at stake,” says a political expert speaking anonymously. “If integration only means connecting North Africa to Europe, then what is Africa’s role?”

For Addis Ababa, the EU’s move comes at a delicate time. Ethiopia is reasserting its regional leadership, expanding ties with the Gulf, and seeking new maritime and trade outlets through the Red Sea.

Abiy Ahmed’s recent parliamentary remarks capture the urgency of that quest.

“We did not build our maritime [capacity] to put it in a glass of water,” said the Prime Minister, as he held up a glass half-full of water in front of lawmakers.

Analysts note that the Prime Minister’s insistence on peaceful means is both a reassurance and a warning: Ethiopia will not abandon its pursuit of access to the sea, but it prefers diplomacy over confrontation.

Still, they contend that Ethiopia’s room for maneuver is narrowing. With Eritrea unyielding, Djibouti heavily commercialized, and Somalia entangled in its own crises, Ethiopia needs credible partners.

Europe, once viewed as a bridge to consensus, now appears aligned elsewhere.

The EU’s partnership with Egypt is also reshaping continental diplomacy. Foreign relations experts note that Egypt’s dual identity as both Arab and African allows it to operate in two arenas at once, a flexibility that Addis Ababa, despite hosting the African Union, cannot easily replicate.

“If Europe channels more investment and policy coordination through Egypt, the African Union itself could feel the ripple. Egypt’s influence within continental institutions may rise, while the Horn’s strategic weight could diminish,” said one analyst.

This dynamic is not lost on Ethiopian policymakers. Despite the strong language, the Ethiopian statement concluded on a constructive note, saying the country “looks forward to engaging the EU and its member states to rectify the gross and wrongful positions reflected in the ‘Joint Statement.’”

In diplomatic terms, analysts say that this suggests Ethiopia is not seeking confrontation but recalibration, a signal that dialogue remains open, provided Europe acknowledges Ethiopia’s rights and contributions.

Observers note this balanced assertiveness could mark a turning point in Ethiopia’s diplomacy with the EU, combining principled firmness with an invitation to reset the relationship.

As the EU–Egypt partnership deepens through 2027, Europe’s engagement with Africa appears increasingly defined by geography, migration, and security interests rather than shared development vision.

For Ethiopia, the challenge will be to navigate this changing landscape—protecting its interests on the Nile, maintaining strategic partnerships, and asserting its leadership within the African Union.

A central goal of the PBF initiative is to improve the quality and coverage of health services, particularly in underserved rural and pastoral areas where access has traditionally been limited and service quality low. By shifting the focus from funding inputs to rewarding verifiable results, the government hopes to increase efficiency and ensure that resources generate greater value.

Ethiopia launched its PBF pilot program in 2015 as part of a broader healthcare reform effort. The pilot project began in the Borana Zone of the Oromia region with support from Cordaid, a Dutch NGO, and the Embassy of the Netherlands, to provide a direct response to the systemic weaknesses of the traditional input-based financing model that had dominated the sector.

The introduction of PBF into Ethiopia’s health system was driven by the need to enhance staff motivation through financial and non-financial incentives linked to performance. The approach was designed to counteract the lack of incentives in the previous structure, strengthen institutional capacity, and align the health system more closely with national development priorities.

Officials see PBF as a key mechanism for aligning health system goals by directly linking financial payments to high-priority areas such as maternal and child health. It has become an essential tool in Ethiopia’s broader strategy to achieve sustainable improvements and ensure that funding delivers measurable results for the population.

Dereje Duguma (MD), the state minister of Health tasked with overseeing health services and programs, was among the officials who attended the symposium. A graduate of the medical school at Mekelle University, Dereje joined the Ministry after completing a graduate program in international public health at Università degli Studi di Parma, Italy in 2013.

The State Minister contends that Ethiopia’s decade-long engagement in PBF has registered successful results. The Reporter’s Abraham Tekle caught up with Dereje to discuss Cordaid’s contribution to Ethiopia’s health sector, the benefits of the PBF project model, perspectives on changes in the global health ecosystem, the decline in financial aid and strategies to address the resulting gaps, among other key issues. EXCERPTS: 

The Reporter: The symposium’s theme was ‘From Local Change to Global Impact.’ What were its main objectives and what contributions have Cordaid and the government of the Netherlands made to the Ethiopian health sector?

Dereje Duguma (MD): Cordaid has been one of the longstanding partners supporting Ethiopia’s health sector for many years, as well as in other African countries and globally. During today’s event, the organization highlighted its decade-long contribution to improving healthcare services across various parts of Ethiopia.

As part of its broader project plan, Cordaid selects health institutions, provides financial support to help them deliver better services, and empowers healthcare workers to serve their communities more effectively. The main purpose of this support is to strengthen the health sector by ensuring equitable and improved services, particularly in remote areas, through better financing mechanisms by mobilizing resources from aid providers, communities, and governments to enhance healthcare delivery.

Our observations show that Cordaid’s initiatives have achieved notable results in the selected areas. Health professionals also have demonstrated increased motivation aligned with the benefits they receive. Moreover, data management systems have improved, reaching the family level within these communities. Their work has also contributed to reducing maternal and child mortality.

The PBF pilot project was one of the main discussion points. How has the Ethiopian health system benefited from the project model?

We’ve registered amazing achievements in terms of PBF in the landscape of the health sector over the past decade. The scale-up went from the Borena zone to many zones across different regions. Oromia, Amhara, Southern Ethiopia, Somali, and others have joined the scale-up. One of the things we have achieved is increasing the number of patients, especially outpatients, and I think this will be able to help the community in high-risk areas.

The second improvement has to do with the quality of the healthcare system. By quality, I mean availability and training, and we have especially motivated people in that specific area. The report received by the Ministry of Health is positive and there is an accountability framework, so it will be verified by a third party.

For example, maternal mortality has declined in areas where PBF is implemented. And also, communicable diseases have been presented in the controls in those areas. Another important thing that I’ve seen is the motivation of our healthcare workers, where staff retention has improved because they receive benefits and incentives through PBF.

There are also improvements in hospital income and primary healthcare system financing, with more support coming from both regional administrations and community contributions. Hospitals are using these resources to enhance service quality and infrastructure. In some hospitals and health centers, for example, new maternal blocks have been constructed using funds mobilized through performance-based financing. These developments show a significant impact on the ground.

How do you see the global health ecosystem changing? What role do development partners play now?

The current global financial landscape is not at a comfortable level for us. In terms of financial assistance, the last few years, especially the last three, were not a good time for us. I think we need an innovative financial approach to the health sector. One is to have innovative finance, like performance-based financing, where we can mobilize resources from the private sector, from CSOs and the community, through the upwards activity of PBF users. That is one important thing.

The second is that the government must also enhance more resource-intensive sectors from trade areas. That is what we are doing now. I think partners in this specific area have to align with the strategies of the government, especially in terms of still bringing flexible and sustainable funding to the health sector. For example, we have the Lusaka Initiative and partners like Global Funds, Gavi, the Global Financing Facility, all aligned with the strategies of the government.

We need more alignment, more harmonization, and prioritizing government policy. And our partners have to invest in local capacity enhancement. We have many international partners, but we prefer local CSOs to be empowered. Going forward, we must also support the local systems, especially the primary healthcare system, as it is the foundation of the health sector.

Philanthropists are now venturing into health because they are the ones who can really support different governments when aid is going down. We need more integration and alignment in this dwindling financial landscape.

What collaborative approaches does the Ministry of Health employ when working with organizations such as Cordaid and other health service partners?

In terms of financial assistance to the country’s health sector, most of the funding has traditionally come from co-partners and donor organizations. However, over the past ten years, their contribution has shown a decline as the government’s share has gradually increased through additional financing obtained from the health insurance initiative, which supports considerable financial sustainability.

Despite this, the Ministry continues to receive substantial financial support from various co-partners and aid organizations, particularly in efforts to combat communicable diseases such as tuberculosis, HIV/AIDS, and malaria. The collaboration involves regular discussions with partners at both ministerial and technical levels, held every three months, to review progress and align efforts in different program areas.

In this process, resources are pooled together, evaluations are conducted to assess achievements and identify gaps, and feedback is provided to partners as part of the reporting process. Therefore, the Ministry maintains strong and effective partnerships with all co-partners, resulting in impactful collaboration. According to aid organizations, Ethiopia’s partnership framework is considered stronger compared to that of many other African countries.

What measures is the Ministry taking to address the financial gaps resulting from the decline in external financial aid in recent years>

It is true that in the past five years, financial aid to the health sector has been steadily decreasing, and in some cases, it has stopped entirely due to various reasons. This trend is not unexpected, as global circumstances have increasingly affected the flow of aid to countries like Ethiopia. In response, the Ministry has been exploring alternative options to address the financial gaps and strengthen the country’s overall financial capacity.

One of the key solutions has been to increase the government’s financial contribution to the health sector. Over the past two years, the government has injected additional funding to support healthcare services. Another major initiative is the health insurance program, which currently benefits more than 63 million Ethiopians by providing access to essential health services.

Through this initiative, the country has collected close to 20 billion Birr, with plans to mobilize additional financial support from other stakeholders. Despite existing limitations, the Ministry has managed to handle the situation effectively. Compared to other African countries, Ethiopia’s position remains relatively stable in terms of managing the financial challenges in its health sector, as PBF contributes to the improvements of Ethiopian healthcare. 

Cordaid is celebrating one hundred years of work in health relief and development. Going forward, what would you like to see from the NGO in terms of its engagements in Ethiopia?

First of all, I would like to congratulate Cordaid for its achievement. At least with the journey that Cordaid has had in the Ethiopian health sector, we have seen remarkable support. As the government of Ethiopia, we are keen to work with Cordaid and see that Cordaid is supporting the whole health system by prioritizing the strategies of the government and priorities of the health sector. Here, I would like Cordaid to continue to work with us to mobilize more resources to bring different actors into the support mechanisms.