Insights

Brief Introduction of the enabling Policy, Strategies, and Development Opportunities in the eyes of the current 3RF Program for Ethiopia

The 3RF is proposed for a period of five years, 2023 to 2028, and is based on the findings of the DaNA. The 3RF is intended to align with and support current and evolving national policies and frameworks, including the Ten Years Perspective Development Plan (2021–30) and the 2022 Ethiopia Humanitarian Response Plan, and to aid coordination linked to the Development Partners Group structure.

Summary of the damage and needs assessment (DaNA)

The DaNA estimates that total damages exceed US$22.6 billion and economic losses stand at US$6 billion as a result of multiple conflicts in Ethiopia from November 2020 to December 2021.5 Estimated needs for recovery and reconstruction total about US$19.7 billion.

Agriculture, housing, and education are the sectors with the greatest needs (table 1.1) Conflict has also increased poverty, mainly through widespread crop and livelihood losses, the destruction of local economies, and impairment of market activities and access to services.

Our common objective now is to put the framework into practice quickly, efficiently, effectively, and sensitively, so that affected communities rapidly bounce back to normalcy and are resilient to future risks. Our shared aspiration is for a peaceful, inclusive, resilient, and prosperous Ethiopia.

Ahmed Shide, Minister of Finance of Ethiopia

TABLE 1.1. Damages, Losses, and Needs (US$, millions), by Sector

Conservative simulation model-based estimates suggest, lost 23 percent and 26 percent of their incomes on average in 2020 and 2021 respectively, amounting to 53 billion Ethiopian birr in total over the two years, the conflict may have pushed as many as 3 million people into poverty.7

The DaNA, however, provides only a snapshot in time to enable recovery investments where feasible and recognizes that the conflict situation in Ethiopia is dynamic.

The three Strategic Objectives (3CG) of 3RF

The 3RF is based on three strategic objectives and draws on the needs contained in the DaNA. Mutually reinforcing strategic objectives:

1. Strengthen social cohesion and community security,
2. Restore critical infrastructure and social services, and,
3. Promote economic recovery.

Key enablers identified for the successful implementation of the recovery and reconstruction efforts are macro-financial stability, an enabling business environment, and national security.

Some of these needs will be met by current or planned government and partner funding. Any outstanding needs not covered by such funding represent a shortfall, which will be met through a combination of the:

1. Realignment of current partner funding,
2. Alignment of future partner funding, and,
3. Mobilization of financing from ‘nontraditional’ sources that seek to invest in Ethiopia’s recovery.

The three Central Goals (3CG) of 3RF

The 3RF aims to assist Ethiopia in achieving three central goals in response to the recent conflict:

1. People-centered recovery that returns sustainable livelihoods to the affected populations; provides sustainable solutions for internally displaced people; improves social justice for all, including women, the poor, and other vulnerable groups; and helps restore people’s trust, improve governance, and harness the necessary conditions for reconstruction based on an inclusive approach.
2. Reconstruction of critical assets, infrastructure, and social services to provide equal access for all to quality basic services.
3. Economic stabilization measures and interventions for boosting the investment environment to enable sustainable economic recovery.