Ethiopia
Photo by Daniele Levis Pelusi, Unsplash
Fragile, green shoots from rich soil
A landlocked country in the Horn of Africa, Ethiopia is a large and diverse nation boasting a plethora of mingling cultures, religions, languages and ecosystems. Abundant fertile land and Africa’s largest freshwater reserves have created agricultural riches, with coffee, maize and livestock forming the backbone of exports, while a large, young and rapidly growing population provide a huge boost to nascent service and technology sectors.
Despite this cultural and ecological wealth, however, Ethiopia remains one of the world’s poorest nations, marred by hunger, corruption, and low access to education and healthcare. Decades of political instability followed the overthrow of the Ethiopian monarchy in 1974, with civil war, communist purges, military coups and severe authoritarian rule all holding back economic and social development. Political stabilisation since 2010 has seen GDP growth averaging 10% throughout the 2010s and remaining at 7.6 in 2024. This growth has brought with it gains in prosperity and life expectancy.
Ethiopia’s Climate Resilient Green Economy (CRGE) Strategy provides the foundation for its green transition. It focuses on four pillars: improving agricultural productivity while reducing emissions; restoring forests; expanding clean energy; and improving efficiency in transport, industry, and buildings. The strategy includes around 60 initiatives and targets a 64% reduction in emissions by 2030 compared to business as usual. However, Ethiopia does not yet have a national carbon tax, an emissions trading system, or a legally binding economy-wide carbon budget aligned with its NDC.
Agriculture and green job creation are central to Ethiopia’s green transition plans. Ethiopia demonstrated strong commitment to sustainable agriculture by chairing the follow-up process to the UN Food Systems Summit in 2023, and in 2024 launched an NDC Implementation Plan to better integrate climate and food system goals. It also secured USD 500 million from the Climate Investment Funds Nature, People and Climate programme to support land restoration, increase productivity, and strengthen resilience among smallholder farmers. Policy initiatives in 2025 have also strengthened rights-based approaches to food systems, including recognition of the right to food.
Green jobs are another major priority. Ethiopia’s National Plan of Action for Job Creation (2020–2025), led by the Job Creation Commission, aims to create 14 million jobs by 2025 and 20 million by 2030. It focuses on MSME development, agro-industry, clean energy, youth employment, and renewable-powered industrial parks such as Hawassa. The plan emphasises private sector growth, skills training, and inclusion of women, refugees, and people with disabilities, embedding green jobs across the wider economy. However, Ethiopia does not yet have a formal national just transition framework. While just transition principles appear in several initiatives, the absence of a unified framework means displaced workers may not be adequately retrained or supported, and new jobs may not be accessible or of equal quality. Green job growth alone does not guarantee a fair transition without protections for affected workers and communities.
Standing in the way of Ethiopia’s transition to a green economy are serious structural challenges. High public debt, limited foreign currency, growing unemployment, unstable prices, low productivity and a serious shortage of skills and education constrain progress. The picture is further complicated by the legacy of communist rule, meaning that several key sectors remain dominated by state-owned entities, including banking and finance, telecoms, transport, and retail.
Conflict remains the most serious challenge. The 2022 Pretoria peace agreement brought a ceasefire between the government and forces in the Tigray region, but tensions persist, and new clashes were reported in January 2026. Combined with the long-standing issues mentioned above, these challenges make Ethiopia’s green transition ambitions promising on paper, but fragile in practice.
Photo by Daniele Levis Pelusi, Unsplash
Policy Scores
Last updated 18 Dec 2025
Governance
National Green Economy Planning
Ethiopia’s national green transition agenda is led by the Climate-Resilient Green Economy (CRGE) Strategy (2011), integrated into the Ten-Year Development Plan (2021–2030) and reflected in the updated NDC (2021). The CRGE sets sectoral pillars and initiatives and has been the overarching framework for aligning development with mitigation/adaptation goals. Public documents are available; legal codification is distributed across sectoral regulations rather than one consolidated green-economy statute.
Ethiopia’s national green transition agenda is led by the Climate-Resilient Green Economy (CRGE) Strategy (2011), integrated into the Ten-Year Development Plan (2021–2030) and reflected in the updated NDC (2021). The CRGE sets sectoral pillars and initiatives and has been the overarching framework for aligning development with mitigation/adaptation goals. Public documents are available; legal codification is distributed across sectoral regulations rather than one consolidated green-economy statute.
Inclusive Corporate Governance
Ethiopia’s corporate governance framework is anchored in the 2021 Commercial Code and, for banks, in the National Bank of Ethiopia’s sectoral directives. These instruments set general governance duties, board structures and controls, but there is no statutory requirement for board-level employee representation and no national gender quota for company boards. The 2021 Commercial Code modernised company forms and board arrangements but does not mandate employee participation or gender composition thresholds; academic reviews and practice materials concur that employee board representation has not featured in Ethiopian company law. Banking-sector governance has been strengthened by the NBE’s 2024 Bank Corporate Governance directive, but this is prudential in scope rather than inclusion-focused. There is no nationwide, mandatory ESG/Sustainability disclosure regime for companies at large, although capital-market and listing rules are being built out by the Ethiopian Capital Market Authority and the Ethiopian Securities Exchange. Ethiopia’s SDG coordination is led by the Ministry of Planning and Development (MoPD) through a national SDG Steering Committee and VNR processes, which provide consultation channels with stakeholders, but these do not create binding corporate ESG obligations.
Ethiopia’s corporate governance framework is anchored in the 2021 Commercial Code and, for banks, in the National Bank of Ethiopia’s sectoral directives. These instruments set general governance duties, board structures and controls, but there is no statutory requirement for board-level employee representation and no national gender quota for company boards. The 2021 Commercial Code modernised company forms and board arrangements but does not mandate employee participation or gender composition thresholds; academic reviews and practice materials concur that employee board representation has not featured in Ethiopian company law. Banking-sector governance has been strengthened by the NBE’s 2024 Bank Corporate Governance directive, but this is prudential in scope rather than inclusion-focused. There is no nationwide, mandatory ESG/Sustainability disclosure regime for companies at large, although capital-market and listing rules are being built out by the Ethiopian Capital Market Authority and the Ethiopian Securities Exchange. Ethiopia’s SDG coordination is led by the Ministry of Planning and Development (MoPD) through a national SDG Steering Committee and VNR processes, which provide consultation channels with stakeholders, but these do not create binding corporate ESG obligations.
Participatory Policymaking
Ethiopia’s Environmental Impact Assessment Proclamation No. 299/2002 requires public participation for projects with environmental impact; the Organizations of Civil Societies Proclamation No. 1113/2019 updated the civil-society legal framework, widening space for CSO engagement compared to prior rules. Formal consultation on broad public policies is practiced but not uniformly mandated across all legislation and levels, and systematic ex-ante impact assessment focused on marginalised groups is limited.
Ethiopia’s Environmental Impact Assessment Proclamation No. 299/2002 requires public participation for projects with environmental impact; the Organizations of Civil Societies Proclamation No. 1113/2019 updated the civil-society legal framework, widening space for CSO engagement compared to prior rules. Formal consultation on broad public policies is practiced but not uniformly mandated across all legislation and levels, and systematic ex-ante impact assessment focused on marginalised groups is limited.
Beyond GDP
Ethiopia’s COVID-19 recovery measures were modest (about 3.1% of GDP) and largely focused on immediate health, food security, and liquidity support. Green measures have been pursued mainly through long-term strategies: the Ten-Year Development Plan (2021–2030), the CRGE Strategy, and large-scale initiatives such as the Green Legacy afforestation programme. The World Bank and IMF have provided concessional financing, but debt distress has limited fiscal space and green conditionality has not been systematically applied. While ecological restoration and job creation under GLI contribute indirectly to recovery, there is no coordinated green stimulus package with structural conditionality.
Ethiopia’s COVID-19 recovery measures were modest (about 3.1% of GDP) and largely focused on immediate health, food security, and liquidity support. Green measures have been pursued mainly through long-term strategies: the Ten-Year Development Plan (2021–2030), the CRGE Strategy, and large-scale initiatives such as the Green Legacy afforestation programme. The World Bank and IMF have provided concessional financing, but debt distress has limited fiscal space and green conditionality has not been systematically applied. While ecological restoration and job creation under GLI contribute indirectly to recovery, there is no coordinated green stimulus package with structural conditionality.
Finance
Green Finance & Banking
Climate-related public finance mobilisation continues under the CRGE Facility housed at the Ministry of Finance, which channels international and domestic resources to mitigation and adaptation. On the supervisory side, the National Bank of Ethiopia issued the Recovery Plan of Banks Directive (SBB/93/2025) requiring all banks to prepare credible recovery plans for periods of severe stress; NBE has also tabled a draft Risk Assessment Model & Early Warning System directive to modernise risk-based supervision. Neither instrument introduces mandatory climate- or social-risk stress testing, and there is no published green-taxonomy or supervisory guidance that integrates environmental risk into capital or risk management requirements. Broader financial-inclusion strategies identify MSMEs and agriculture as priorities, but they do not establish dedicated green-lending quotas or prudential incentives.
Climate-related public finance mobilisation continues under the CRGE Facility housed at the Ministry of Finance, which channels international and domestic resources to mitigation and adaptation. On the supervisory side, the National Bank of Ethiopia issued the Recovery Plan of Banks Directive (SBB/93/2025) requiring all banks to prepare credible recovery plans for periods of severe stress; NBE has also tabled a draft Risk Assessment Model & Early Warning System directive to modernise risk-based supervision. Neither instrument introduces mandatory climate- or social-risk stress testing, and there is no published green-taxonomy or supervisory guidance that integrates environmental risk into capital or risk management requirements. Broader financial-inclusion strategies identify MSMEs and agriculture as priorities, but they do not establish dedicated green-lending quotas or prudential incentives.
Greening Fiscal & Monetary Policy
Ethiopia continues to lack formal fiscal or monetary reforms targeting environmental financial risk. Although the country has begun exploring green financial strategies—such as discussions of green bonds and climate-aware disclosures by the National Bank since 2023—these are not yet translated into formal fiscal or monetary policies. There's no sovereign green bond issuance from Ethiopia, nor any mandated climate risk stress testing or green taxation framework.
Ethiopia continues to lack formal fiscal or monetary reforms targeting environmental financial risk. Although the country has begun exploring green financial strategies—such as discussions of green bonds and climate-aware disclosures by the National Bank since 2023—these are not yet translated into formal fiscal or monetary policies. There's no sovereign green bond issuance from Ethiopia, nor any mandated climate risk stress testing or green taxation framework.
Green Trade Practices
Ethiopia’s trade planning remains tied to environmental aims anchored in its Climate‑Resilient Green Economy (CRGE) vision. While the CRGE and updated NDC implementation frameworks guide green industrialization and low-carbon development, Ethiopia has not yet embedded sustainable development chapters in its trade agreements, nor demonstrated adoption of green taxonomies, carbon pricing, or trade-related policymaking. As of 2025, the country has no involvement in multilateral green trade pacts such as ACCTS.
Ethiopia’s trade planning remains tied to environmental aims anchored in its Climate‑Resilient Green Economy (CRGE) vision. While the CRGE and updated NDC implementation frameworks guide green industrialization and low-carbon development, Ethiopia has not yet embedded sustainable development chapters in its trade agreements, nor demonstrated adoption of green taxonomies, carbon pricing, or trade-related policymaking. As of 2025, the country has no involvement in multilateral green trade pacts such as ACCTS.
Pricing Carbon
Ethiopia participates in international carbon markets and has advanced its domestic legal basis for forest-carbon activities. The Forest Development, Protection and Utilization Regulation No. 544/2024 (Federal Negarit Gazette) allows carbon revenue sharing among the federal government, regions and communities, and frames carbon benefits within forest management planning. In 2025, Ethiopia published a National Carbon Market Strategy (hosted by UNFCCC), signalling plans to develop a national carbon market law, to engage under Paris Agreement Article 6, and to explore carbon pricing as a policy instrument. At the time of writing, there is no national carbon tax or emissions trading system in force, and Ethiopia does not operate a legally binding economy-wide carbon-budget framework aligned to its NDC; sectoral mitigation targets are instead embedded in the NDC and Ten-Year Development Plan.
Ethiopia participates in international carbon markets and has advanced its domestic legal basis for forest-carbon activities. The Forest Development, Protection and Utilization Regulation No. 544/2024 (Federal Negarit Gazette) allows carbon revenue sharing among the federal government, regions and communities, and frames carbon benefits within forest management planning. In 2025, Ethiopia published a National Carbon Market Strategy (hosted by UNFCCC), signalling plans to develop a national carbon market law, to engage under Paris Agreement Article 6, and to explore carbon pricing as a policy instrument. At the time of writing, there is no national carbon tax or emissions trading system in force, and Ethiopia does not operate a legally binding economy-wide carbon-budget framework aligned to its NDC; sectoral mitigation targets are instead embedded in the NDC and Ten-Year Development Plan.
Sectors
Cross-Sectoral Planning
Ethiopia has a structured, multi-sector climate plan framed in its Climate-Resilient Green Economy (CRGE) Strategy, and its National Adaptation Plan, with emissions mitigation and adaptation actions in agriculture, forestry, energy, transport, industry and health. These are integrated into the Growth & Transformation Plans and overseen by the Planning & Development Commission and CRGE Inter-Ministerial Steering Committee. In 2023, Ethiopia completed its NDC Implementation Plan (2023–2025) and designed the CRGE Facility to finance sectoral interventions. However, performance reviews from 2020–2022 found limited evidence of emission reductions, and the 2025 update of the CRGE Strategy and alignment with NDC targets is still pending. Monitoring systems are being strengthened, but real-time sector-level reporting remains weak.
Ethiopia has a structured, multi-sector climate plan framed in its Climate-Resilient Green Economy (CRGE) Strategy, and its National Adaptation Plan, with emissions mitigation and adaptation actions in agriculture, forestry, energy, transport, industry and health. These are integrated into the Growth & Transformation Plans and overseen by the Planning & Development Commission and CRGE Inter-Ministerial Steering Committee. In 2023, Ethiopia completed its NDC Implementation Plan (2023–2025) and designed the CRGE Facility to finance sectoral interventions. However, performance reviews from 2020–2022 found limited evidence of emission reductions, and the 2025 update of the CRGE Strategy and alignment with NDC targets is still pending. Monitoring systems are being strengthened, but real-time sector-level reporting remains weak.
Circular Economy
Ethiopia has initiated circular economy measures via its National Plastic Waste Management Strategy and Roadmap (2024–2034), establishing extended producer responsibility and recycling mandates. These efforts reflect national progress, extending resource efficiency ambitions beyond CRGE, with development of bioeconomy strategies underway. However, Ethiopia still lacks a comprehensive, economy-wide circular roadmap, concrete CMUR targets, or mechanisms for repairing, reusing, or including informal sector actors in its circular transition.
Ethiopia has initiated circular economy measures via its National Plastic Waste Management Strategy and Roadmap (2024–2034), establishing extended producer responsibility and recycling mandates. These efforts reflect national progress, extending resource efficiency ambitions beyond CRGE, with development of bioeconomy strategies underway. However, Ethiopia still lacks a comprehensive, economy-wide circular roadmap, concrete CMUR targets, or mechanisms for repairing, reusing, or including informal sector actors in its circular transition.
Green Transport & Mobility
Ethiopia initiated a pioneering ban on imports of gasoline and diesel vehicles in January 2024. As of mid-2025, the country’s EV fleet surpassed 14,000, up from 4,600—thanks to government incentives and growing consumer uptake. Meanwhile, Ethiopia updated customs rules in 2025 to further restrict internal combustion vehicle entry while exempting EVs and hybrids. There are no formal, economy-wide 2030 electrification targets for all vehicle classes, and EV infrastructure (charging networks, servicing) remains insufficient.
Ethiopia initiated a pioneering ban on imports of gasoline and diesel vehicles in January 2024. As of mid-2025, the country’s EV fleet surpassed 14,000, up from 4,600—thanks to government incentives and growing consumer uptake. Meanwhile, Ethiopia updated customs rules in 2025 to further restrict internal combustion vehicle entry while exempting EVs and hybrids. There are no formal, economy-wide 2030 electrification targets for all vehicle classes, and EV infrastructure (charging networks, servicing) remains insufficient.
Clean Energy
Ethiopia possesses high RE ambition. Hydropower supplies 90% of electricity, and there are strategic investments for solar, geothermal, wind and transmission infrastructure, all backed by the NDC Implementation Plan (2023–2025) and the Long-Term Low-Emissions Development Strategy (LT‑LEDS, 2023). Regional interconnections support cross-border electricity exports. However, over 90% of household energy remains from biomass, requiring further expansion.
Ethiopia possesses high RE ambition. Hydropower supplies 90% of electricity, and there are strategic investments for solar, geothermal, wind and transmission infrastructure, all backed by the NDC Implementation Plan (2023–2025) and the Long-Term Low-Emissions Development Strategy (LT‑LEDS, 2023). Regional interconnections support cross-border electricity exports. However, over 90% of household energy remains from biomass, requiring further expansion.
Just Transition
Green Job Creation
Ethiopia’s National Plan of Action for Job Creation (2020–2025), developed by the Job Creation Commission, is a holistic and green-inclusive strategy aiming to generate 14 million jobs by 2025 and 20 million by 2030, prioritizing MSME growth, agro-industry, clean energy, and youth employment. Key pillars include private-sector-led growth, skills training, labor intermediation, inclusivity for women, refugees, and people with disabilities, and leveraging renewable energy and industrial parks (e.g., Hawassa) for job creation. The Plan complements broader economic strategies, ensuring green jobs are firmly embedded across economic sectors.
Ethiopia’s National Plan of Action for Job Creation (2020–2025), developed by the Job Creation Commission, is a holistic and green-inclusive strategy aiming to generate 14 million jobs by 2025 and 20 million by 2030, prioritizing MSME growth, agro-industry, clean energy, and youth employment. Key pillars include private-sector-led growth, skills training, labor intermediation, inclusivity for women, refugees, and people with disabilities, and leveraging renewable energy and industrial parks (e.g., Hawassa) for job creation. The Plan complements broader economic strategies, ensuring green jobs are firmly embedded across economic sectors.
Just Transition Frameworks
Ethiopia does not have a formal national just transition framework. However, elements of just transition principles appear in several initiatives. The Productive Safety Net Programme (PSNP 5, 2021–2025) integrates watershed restoration and pro-poor public works. The Green Legacy Initiative (GLI) has mobilised over 20 million citizens, created 767,000 jobs (mainly for women and youth), and contributed to afforestation and community resilience. The World Bank’s Sustainable and Inclusive Growth Development Policy Operation (2024) supports reforms to expand safety nets and sustainable land management. These initiatives combine social protection and green development, but remain fragmented and lack unified sectoral guidance or benefit-sharing frameworks.
Ethiopia does not have a formal national just transition framework. However, elements of just transition principles appear in several initiatives. The Productive Safety Net Programme (PSNP 5, 2021–2025) integrates watershed restoration and pro-poor public works. The Green Legacy Initiative (GLI) has mobilised over 20 million citizens, created 767,000 jobs (mainly for women and youth), and contributed to afforestation and community resilience. The World Bank’s Sustainable and Inclusive Growth Development Policy Operation (2024) supports reforms to expand safety nets and sustainable land management. These initiatives combine social protection and green development, but remain fragmented and lack unified sectoral guidance or benefit-sharing frameworks.
Greening MSMEs & Social Enterprise
Ethiopia operates MSME support institutions and programmes—most notably Ethiopian Enterprise Development (EED)—and has adopted strategies for entrepreneurship and manufacturing-MSME development (e.g., the National Entrepreneurship Strategy 2020–2025 and a Manufacturing MSME Transition Strategy). These policies focus on enterprise capacity, finance, skills and formalisation, with ad hoc green-production elements in manufacturing upgrading, but no dedicated national programme or incentives targeted specifically at “greening” MSMEs are codified, and there is no separate legal form for social enterprises in Ethiopian law. Generic entrepreneurship training is delivered through EDI-Ethiopia and related programmes.
Ethiopia operates MSME support institutions and programmes—most notably Ethiopian Enterprise Development (EED)—and has adopted strategies for entrepreneurship and manufacturing-MSME development (e.g., the National Entrepreneurship Strategy 2020–2025 and a Manufacturing MSME Transition Strategy). These policies focus on enterprise capacity, finance, skills and formalisation, with ad hoc green-production elements in manufacturing upgrading, but no dedicated national programme or incentives targeted specifically at “greening” MSMEs are codified, and there is no separate legal form for social enterprises in Ethiopian law. Generic entrepreneurship training is delivered through EDI-Ethiopia and related programmes.
Inclusive Social Protection
Ethiopia features one of Africa’s most advanced and inclusive social protection systems, including rural and urban safety nets, but links to environmental sustainability or green economy transition remain limited. Its 2014 National Social Protection Policy and 2016 Urban Productive Safety Net Programme (uPSNP) were expanded by 2020 to cover 11 cities and over 600,000 urban households engaged in public works, food/cash transfers, and income generation. Evaluations show significant improvements in food security and school attendance among women-headed households. Yet, though upsides exist at project level, Ethiopia lacks a top-down policy mandate linking social transfers with green job creation, nature-based outcomes, or climate resilience targets.
Ethiopia features one of Africa’s most advanced and inclusive social protection systems, including rural and urban safety nets, but links to environmental sustainability or green economy transition remain limited. Its 2014 National Social Protection Policy and 2016 Urban Productive Safety Net Programme (uPSNP) were expanded by 2020 to cover 11 cities and over 600,000 urban households engaged in public works, food/cash transfers, and income generation. Evaluations show significant improvements in food security and school attendance among women-headed households. Yet, though upsides exist at project level, Ethiopia lacks a top-down policy mandate linking social transfers with green job creation, nature-based outcomes, or climate resilience targets.
Nature
Ocean & Land Conservation
Ethiopia addresses SDG 14 through freshwater and watershed management, given its landlocked status. The Sustainable Land Management Programme (SLMP) and its follow-on operations (RLLP) have scaled integrated watershed and landscape management to thousands of community watersheds. The Green Legacy Initiative also contributes to SDG 15 through afforestation and biodiversity restoration. The Ethiopian Biodiversity Institute (EBI) reported in August 2025 that it had revised the first draft of the National Biodiversity Strategy and Action Plan (NBSAP) to align with the Kunming–Montreal Global Biodiversity Framework. However, the revised NBSAP is not yet finalised, and interim targets with consolidated progress assessments remain absent.
Ethiopia addresses SDG 14 through freshwater and watershed management, given its landlocked status. The Sustainable Land Management Programme (SLMP) and its follow-on operations (RLLP) have scaled integrated watershed and landscape management to thousands of community watersheds. The Green Legacy Initiative also contributes to SDG 15 through afforestation and biodiversity restoration. The Ethiopian Biodiversity Institute (EBI) reported in August 2025 that it had revised the first draft of the National Biodiversity Strategy and Action Plan (NBSAP) to align with the Kunming–Montreal Global Biodiversity Framework. However, the revised NBSAP is not yet finalised, and interim targets with consolidated progress assessments remain absent.
Natural Capital Accounting
Since 2022 Ethiopia has launched a Natural Capital Accounting (NCA) initiative aligned with SEEA standards, led by the Ministry of Planning and Development with support from the UN and World Bank Global Program for Sustainability. The initiative has established a Technical Working Group and Steering Committee, and produced initial scoping work including preliminary land-cover classifications (2013 & 2022) to inform future accounts. Ethiopia is participating in international SEEA implementation tracking. At present, comprehensive, regularly published national natural-capital accounts are not yet available, and there is no independent statutory advisory body on natural capital embedded in budget or planning processes. seea.un.org
Since 2022 Ethiopia has launched a Natural Capital Accounting (NCA) initiative aligned with SEEA standards, led by the Ministry of Planning and Development with support from the UN and World Bank Global Program for Sustainability. The initiative has established a Technical Working Group and Steering Committee, and produced initial scoping work including preliminary land-cover classifications (2013 & 2022) to inform future accounts. Ethiopia is participating in international SEEA implementation tracking. At present, comprehensive, regularly published national natural-capital accounts are not yet available, and there is no independent statutory advisory body on natural capital embedded in budget or planning processes. seea.un.org
Sustainable Agriculture & Food Systems
Ethiopia’s efforts toward food system transformation are guided by a National Food Systems Transformation Strategy (the precise name and formal adoption date may vary but the strategic focus is established). This strategy is aligned with SDGs 2 (Zero Hunger) and 12 (Sustainable Consumption and Production), addressing key areas such as healthy diets, regenerative agriculture, climate resilience, reducing food loss and waste, and socio-economic equity.
Ethiopia has demonstrated high-level commitment, notably by leading the UN Food Systems Summit +2 Stocktaking Momentum in 2023. In 2024, the country advanced an NDC Implementation Plan to ensure climate and food system objectives are integrated. Furthermore, Ethiopia secured a $500 million investment from the Climate Investment Funds (CIF) Nature, People and Climate program in 2024 to support land restoration, improve productivity, and enhance resilience for smallholder farmers. Recent policy initiatives in 2025 have focused on strengthening the rights-based framework for food systems planning, including the right to food.
Ethiopia’s efforts toward food system transformation are guided by a National Food Systems Transformation Strategy (the precise name and formal adoption date may vary but the strategic focus is established). This strategy is aligned with SDGs 2 (Zero Hunger) and 12 (Sustainable Consumption and Production), addressing key areas such as healthy diets, regenerative agriculture, climate resilience, reducing food loss and waste, and socio-economic equity.
Ethiopia has demonstrated high-level commitment, notably by leading the UN Food Systems Summit +2 Stocktaking Momentum in 2023. In 2024, the country advanced an NDC Implementation Plan to ensure climate and food system objectives are integrated. Furthermore, Ethiopia secured a $500 million investment from the Climate Investment Funds (CIF) Nature, People and Climate program in 2024 to support land restoration, improve productivity, and enhance resilience for smallholder farmers. Recent policy initiatives in 2025 have focused on strengthening the rights-based framework for food systems planning, including the right to food.
Nature Finance
Ethiopia mobilises climate and nature finance through the CRGE Facility (Ministry of Finance, accredited to the GCF) and targeted programmes. In December 2024, the Climate Investment Funds endorsed Ethiopia’s Nature, People and Climate Investment Plan, allocating USD 37 million with MDB co-financing. In addition, the Oromia Forested Landscape Program (OFLP) signed a USD 40 million Emission Reductions Purchase Agreement with the World Bank in 2023, delivering results-based REDD+ finance to over 350 community cooperatives engaged in participatory forest management. These measures channel investment to restoration and IPLCs, but broader fiscal reform, removal of harmful subsidies, and environmental taxation remain absent.
Ethiopia mobilises climate and nature finance through the CRGE Facility (Ministry of Finance, accredited to the GCF) and targeted programmes. In December 2024, the Climate Investment Funds endorsed Ethiopia’s Nature, People and Climate Investment Plan, allocating USD 37 million with MDB co-financing. In addition, the Oromia Forested Landscape Program (OFLP) signed a USD 40 million Emission Reductions Purchase Agreement with the World Bank in 2023, delivering results-based REDD+ finance to over 350 community cooperatives engaged in participatory forest management. These measures channel investment to restoration and IPLCs, but broader fiscal reform, removal of harmful subsidies, and environmental taxation remain absent.
Green Recovery
Green Recovery Measures
Ethiopia’s COVID-19 recovery measures were modest (about 3.1% of GDP) and largely focused on immediate health, food security, and liquidity support. Green measures have been pursued mainly through long-term strategies: the Ten-Year Development Plan (2021–2030), the CRGE Strategy, and large-scale initiatives such as the Green Legacy afforestation programme. The World Bank and IMF have provided concessional financing, but debt distress has limited fiscal space and green conditionality has not been systematically applied. While ecological restoration and job creation under GLI contribute indirectly to recovery, there is no coordinated green stimulus package with structural conditionality.
Ethiopia’s COVID-19 recovery measures were modest (about 3.1% of GDP) and largely focused on immediate health, food security, and liquidity support. Green measures have been pursued mainly through long-term strategies: the Ten-Year Development Plan (2021–2030), the CRGE Strategy, and large-scale initiatives such as the Green Legacy afforestation programme. The World Bank and IMF have provided concessional financing, but debt distress has limited fiscal space and green conditionality has not been systematically applied. While ecological restoration and job creation under GLI contribute indirectly to recovery, there is no coordinated green stimulus package with structural conditionality.