A new report from ActionAid International has issued a stark warning to Ethiopia, calling on the government to abandon IMF-prescribed austerity measures amid a rapid deterioration of public education and health services.
The study — The Human Cost of Public Sector Cuts in Africa — highlights the effects of fiscal consolidation policies across six African countries, with Ethiopia emerging as one of the hardest hit. Drawing on fieldwork involving 100 respondents in Ethiopia, including 40 public sector workers and 60 community members, the report documents a deepening crisis in frontline services, compounded by debt distress and growing inequality.
According to ActionAid, Ethiopia’s strict adherence to International Monetary Fund (IMF) guidance on curbing public spending, limiting wage bills and pursuing privatisation has hollowed out its capacity to deliver basic services. The findings paint a picture of overstretched teachers, under-resourced clinics and women disproportionately burdened with unpaid care work.
In the education sector, 100 percent of surveyed teachers in Ethiopia reported sharp declines in basic provisions such as desks and textbooks. School budgets, they noted, have been slashed by over 50 percent in the past five years. Ethiopia’s student-teacher ratio currently stands at 1:55 — nearly double the international recommendation of 1:30.
The report found that 81 percent of teachers share limited supplies to cope with overcrowded classrooms.
In healthcare, Ethiopia allocates just 7.1 percent of national revenue — well below the 15 percent Abuja Declaration target. The country has only 1.43 doctors and 10.47 nurses per 10,000 people, with maternal and child health services particularly affected. Of surveyed health workers cited persistent equipment and staffing shortages, leading to prolonged wait times and declining quality of care.
As public services falter, women have assumed increasing unpaid care responsibilities, estimated at up to 28 additional hours per week. “This is a gendered crisis,” the report states, “with women absorbing the shocks of failing systems.”
Ethiopia’s economic constraints are further compounded by external debt repayments, which account for six percent of national revenue. The report flags the 213 million US dollars the country loses annually to illicit financial flows and criticises the IMF’s recent Extended Credit Facility programme — signed in July 2024 — for reinforcing spending limits that inhibit recruitment of essential workers.
ActionAid argues that such conditionalities have had a chilling effect across the continent, estimating a $10 billion cut in public sector budgets across 15 countries due to IMF austerity.
In response, the organisation has outlined a suite of recommendations for Ethiopia and other affected governments:
The report urges Ethiopia to resist wage bill caps and fiscal tightening measures that have eroded service delivery and worker recruitment. It also called for a coordinated push among Global South countries to advocate for debt cancellation and a new UN-led framework on sovereign debt. More than 75 percent of low-income countries now spend more on debt servicing than on health.
National governments should reject coercive IMF policies, seek debt relief or cancellation, and expand tax revenues in fair ways to rebuild public health and education workforces and infrastructure, ActionAid said.
Beyond fiscal policy, ActionAid’s report takes aim at the global financial architecture, criticising the IMF and World Bank for what it describes as “colonial-era dynamics” that prioritise creditors over citizens. African countries hold less than 10 percent of the IMF’s voting power, despite bearing the brunt of its policies.
Ethiopia’s long-standing engagement with the Fund — including nine IMF programmes since 1945 — has done little to insulate it from recurring crises, the report argues.
In July 2024, the International Monetary Fund (IMF) approved a four-year, 3.4 billion US dollars Extended Credit Facility (ECF) arrangement for Ethiopia to support the country’s Homegrown Economic Reform Agenda. The program aims to address macroeconomic imbalances, restore debt sustainability, and lay the foundation for inclusive, private sector-led growth .
Officials argue the IMF program was a strategic choice by the Ethiopian government to bolster its reform agenda.
(BirrMetrics)
Ethiopia unveils FaydaPass digital wallet to boost financial inclusion
Ethiopia has launched what it calls the FaydaPass wallet, the latest move in its digital public infrastructure (DPI) program aimed at speeding up financial inclusion as well as verification for access to a number of other government services.
Tech5 and payments giant Visa supported the country in the development of the wallet, the former providing its T5-Airsnap and T5-OmniMatch systems.
The launch of the wallet came on the day representatives of these two firms shared thoughts about leveraging the use of digital identity in the financial sector on the second day of ID4Africa 2025 which Ethiopia is hosting.
According to the developers and owners of the FaydaPass wallet, the platform has been built to serve “a diverse and inclusive user base” and to address critical digital Know Your Customer (KYC) verification needs.
To them, the move will dramatically change how users access especially financial services in the vast East African country.
Obtaining a digital ID using the wallet will be easy and streamlined, which means that users can simply download the official app and request their digital ID credential through it.
Ethiopia’s Coopbank is mentioned as the first to integrate the FaydaPass, with the bank’s CEO, Deribie Asfaw, describing their collaboration as one that “enables us to reach financially marginalized communities who have long been excluded from the formal financial system due to the absence of such robust infrastructures.”
With the FaydaPass wallet, users will be able to create a bank account with Coopbank and can also request a virtual Visa card for payments, the announcement explains.
“This brings us one step closer to the community and reinforces our commitment to leaving a meaningful mark on the country’s digital transformation journey. As it allows us to live our purpose of Empowering Communities and Transforming Lives, we are truly delighted to take part in this impactful initiative,” Asfaw added.
Also commenting on the launch of the wallet, the Executive Director of Ethiopia’s National ID program, Yodahe Zemichael, said: “A credential wallet would be a container for government and private sector issued-standardized verifiable credentials. It’s an exciting new way of delivering value to citizens and extending the functionality of Fayda Digital ID.”
Tech5 Co-founder, Chairman, and CTO, Rahul Parthe, praised the move as one that will unluck numerous use cases for Ethiopians, and that the ecosystem is “a vital step in the country’s digital transformation.”
The company’s Cluster Head for Eastern Africa and Ethiopia Country Manager, Yared Endale, called it “a groundbreaking initiative that will significantly enhance financial inclusion and streamline digital transactions.”
“By leveraging advanced biometric eKYC verification, we are paving the way for secure and seamless financial services that will benefit millions of Ethiopians.”
(BIOMETRIC UPDATE)
The Assela Wind Farm Delivers First Power to Ethiopia’s National Grid
The Assela 100 MW wind farm has reached a significant milestone as its first turbines have started feeding power into Ethiopia’s national grid.
By the end of 2025, when all 29 turbines are fully operational, the wind farm will generate over 300 GWh of clean and sustainable energy annually – enough to meet the electricity needs of more than 140,000 Ethiopian households.
Located 150km south of Addis Ababa in the Oromia region, the Assela wind farm is owned by the state utility Ethiopian Electric Power (EEP). The project is fully financed by Denmark through a grant from IFU’s Danida Sustainable Infrastructure Finance (DSIF) and a loan from Danske Bank.
Constructed by the Spanish-German company Siemens Gamesa, the project illustrates the European Global Gateway strategy, which leverages finance and expertise from public and private Team Europe partners to build smart, clean and secure energy connections worldwide.
The project supports Ethiopia’s ambition to achieve the Sustainable Development Goals and middle-income status by 2030 through a climate-resilient and low-carbon development path. Large-scale renewable energy generation is key to reducing reliance on fossil fuels in transport and industry, as well as on traditional biomass fuels predominantly used by rural households. Wind energy also diversifies Ethiopia’s electricity mix – which currently depends heavily on hydropower – strengthening climate resilience. With the Assela wind farm, Ethiopia moves closer to universal access to modern, affordable energy and to becoming a regional power hub in Eastern Africa, eventually supporting the decarbonisation across the region.
High-level representatives from Ethiopia, Denmark, and the European Union gathered on site to mark this milestone, which also earned praise from the European Commissioner for International Partnerships.
Semereta Sewasew, State Minister of Finance for Economic Cooperation said that, the Farm represents a major step in Ethiopia’s shift toward a resilient and diversified energy system. “It demonstrates our ability to deliver technically advanced alternative energy solutions through blended finance, strong institutional coordination, and lasting partnerships. Our collaboration with the Kingdom of Denmark has been instrumental in integrating clean energy into the national grid and advancing our economic and climate objectives.”
On his part, Sune Krogstrup, Ambassador of Denmark to Ethiopia said that the farm showcases the robust partnership between Denmark and Ethiopia. “Drawing on Denmark’s extensive experience, we are proud to contribute to enhancing Ethiopia’s energy system. This collaboration not only advances Ethiopia’s renewable energy capacity but also strengthens the bonds between our nations and is a great illustration of the Global Gateway led by the European Union and its Member States.”
Sofie From-Emmesberger, Ambassador of the European Union to Ethiopia: “The Assela wind farm is the first milestone in implementing Global Gateway in Ethiopia’s energy sector. Congratulations to Denmark, Ethiopia and Siemens for delivering this critical and sustainable infrastructure! Team Europe will continue supporting smart investments that contribute to Ethiopia’s clean energy transition, especially through an extended partnership with Ethiopian Electric Power to modernise and digitalise its electricity grid.”
European Commissioner for International Partnerships, Jozef Síkela: “This is a perfect example of Global Gateway in action: Transformative investments in strategic sectors as energy to unlock potential growth and boost job creation. The Assela windfarm will not only improve the daily lives of people in Ethiopia, it will upscale local businesses and create new opportunities for communities. It also creates new links between Europe and Ethiopia, with European companies at the heart of its construction. A true win-win cooperation. And that is what Global Gateway is about.”
(europa.eu)
Askari paves way to secure gold-rich foothold in Ethiopia
Askari Metals has wrapped up due diligence and is moving forward to buy 460 square kilometres of prime exploration ground near multi-million-ounce gold mines in Ethiopia’s famed Adola greenstone belt.
When the deal is sealed, Askari will walk away with a prime piece of gold real estate by unlocking a strategic foothold in the southern Arabian-Nubian Shield – a geological hot spot hosting some of the world’s largest undeveloped gold and copper deposits.
Under the terms of the acquisition, the company has agreed to take over 100 per cent of Rift Valley Metals, the current owners of the exploration grounds in exchange for USD 200,000 in cash and USD 200,000 in Askari shares, issued at the share price on the day of completion. Those shares will be held in voluntary escrow for 12 months.
Two further milestone payments totalling USD 200,000 in cash and shares will be doled out based on the company picking up multiple rock chip samples of at least three grams per tonne (g/t) and 10 samples of more than 10g/t, together with a trench result of 10m grading 3g/t or more. A final payment of USD 150,000 in cash will be handed over 12 months after completion.
What makes this deal shine is its proximity to tier-1 gold mines. Askari’s five freshly acquired tenements – Sakaro, Sakaro West, Lega Dembi South, Megado and Wayu Boda – are parked right next door to Ethiopia’s only two operating gold mines, Lega Dembi and Sakaro, which have already coughed up multi-million ounces between them.
The Lega Dembi mine has produced 2.5 million ounces and still holds a current resource of 2.5M ounces, while Sakaro has more than 600,000 ounces at a blistering grade above 14g/t gold. The company’s Megado tenement, which sits a little further to the south, is only 30 kilometres north of the 17.7M-ounce Dawa-Okote gold project.
“Our onsite due diligence identified several significant large-scale artisanal mine workings along this highly prospective greenstone gold belt underpinning our belief that with modern exploration, the full potential and value of these areas can be unlocked. For Askari, this acquisition represents an opportunity for the company to make a significant discovery and implement the necessary infrastructure to assemble a tier-1 gold portfolio in Ethiopia,” Askari Metals executive director Gino D’Anna, said.
Askari says it is moving quickly to unlock value from its acquisition. These mineralised veins are particularly prominent at the Wayu Boda project. Additionally, abundant copper staining hints at potential polymetallic mineralisation.
Askari says the real prize may lie beneath the surface after remote sensing and geophysical data lit up gold-bearing structures that may extend far beyond visible outcrops.
The company has already commenced preparations for high-resolution satellite studies and systematic mapping across the new holdings.
With gold pushing above USD 3300 (A$5153) an ounce, the timing of the acquisition appears spot on. Adding to the gold price buzz, Ethiopia is seen as a pro-mining country with modern mining laws and a government welcoming foreign investment.
Askari’s leap into Ethiopia has given the company a first-mover edge among Australian explorers. The vast, 2.7M square kilometre Arabian-Nubian Shield hosts massive mines, such as Centamin’s 11M-ounce Sukari gold mine in Egypt and Barrick’s 30 million tonne Jabal Sayid copper play in Saudi Arabia. However, Ethiopia’s slice of this mineral-rich monster has remained virtually untouched.
Beyond the latest Ethiopian deal, Askari says it remains hot on the acquisition trail, assessing additional gold projects in the region.
(The West Australian)
Birr slips to 133.17 in forex auction, widening spread with 152 parallel market rate
The Ethiopian birr continued its gradual weakening against the US dollar in the latest foreign exchange auction, with the National Bank of Ethiopia (NBE) allocating 50 million US dollars at a weighted average rate of 133.1715 birr, reflecting mounting pressure on the currency amid persistent shortages of hard currency.
The auction — the sixth of its kind over the last one year period — drew bids from 14 commercial banks, compared with 16 banks that secured allocations at the previous auction two weeks earlier, when the central bank offered 60 million US dollars and the average exchange rate stood at 132.96 birr.
Though the movement in the official rate appears modest, it takes place against the backdrop of a rapidly deteriorating parallel market, where the dollar now trades at over 152 birr — more than 14 percent above the latest auction rate. Forex bureaus, which operate in a regulated space, have also raised their offers to around 150 birr, while average rates in the banking system hover near 132 birr, effectively creating a fragmented and multi-tiered currency environment.
The auction mechanism, reintroduced by the NBE following the floating of the local currency, was conceived as a step toward currency liberalisation and greater transparency in foreign exchange allocation. However, the persistent misalignment between official and market-clearing rates has raised questions about the sustainability of the current approach.
The central bank is allowing the birr to adjust incrementally, but the fundamentals suggest it is falling behind market realities, according to experts.
(BIRRMETRICS)
