Ethiopia has received $388 million (KSh39.8 billion) from Germany in the form of a grant. The money is for reforms that will promote private investment and sustainable economic development.
According to Gerd Müller, Germany’s Minister for Economic Cooperation and Development, 110 million euros will be for direct budgetary support.
In addition to direct budgetary support, the funding will also be used to promote private investment and ongoing reforms.
In a joint letter of intent signed by both countries, Germany also pledged to support Ethiopia’s reform agenda. This will be achieved by contributing to the World Bank’s Growth and Competitiveness Program, the goals of which reflect the central reform priorities of the Ethiopian government.
Additionally, Ethiopia’s Ministry of Finance will use the funding to strengthen industrial parks, increase tax revenues by improving the tax system and to enhance the investment climate.
Other areas that will be touched by the reforms include vocational training and economic development and agriculture.
For agriculture, Germany will support the strengthening of agricultural value chains, an increase of agricultural productivity and (industrial) processing and marketing.
The agreement was signed by Germany’s ministers for economic cooperation, labor, and social affairs. They are currently in Ethiopia on a state visit.