Gov’t, Dev’t Partners embrace private sector investment for sustainable dev’t goals

Addis Ababa, April 30, 2024 (FBC) – In a retreat held today at the Africa Leadership Excellence Academy (AFLEX), the Government of Ethiopia and the Development Partners Group (DPG) engaged in discussions centered around the country’s sustainable financing strategy. The retreat brought together State Ministers, Heads of Development Partners, and key stakeholders, according to the Ministry of Finance.

It is stated that the retreat served as a follow-up event to the High-Level Development Forum (HLDF) held on March 14th, during which the Government and the DPG reaffirmed their commitment to addressing challenges related to peacebuilding, resilience, and macro-economic development.

Semereta Sewasew, the State Minister of Finance and Co-Chair of DPG, emphasized the importance of aligning efforts with national development priorities, diversifying sources of finance, and recognizing the humanitarian-development-peace nexus. Dr. Ramiz Alkbarov, UN Resident and Humanitarian Coordinator, and Mr. Phil Elks, acting development director at FCDO, also led the discussions.

During the retreat, the Ministry of Planning and Development presented the three-year priority areas of the Medium-Term Development and Investment Plan of Ethiopia (MDIP). These priority areas are derived from the Ten Year Development Plan and aligned with HGER 2.0. Notably, the MDIP places significant emphasis on the growth of the industrial sector.

Furthermore, the draft report of Ethiopia’s Sustainable Financing Strategy (ESFS) was discussed extensively. Led by the Ministry of Finance, this strategy aims to establish a financing framework that encompasses diversified sources of funding to meet the growing development needs of the country. The ESFS identifies four key sources of financing: domestic public financing, international public financing (ODA), domestic private sources, and international private sources.

The DPG welcomed the draft financing strategy, appreciating the intention to involve more private actors in the economy. This new commitment and spirit were commended as a means to ensure sustainable financing for Ethiopia’s development needs. Ms. Semereta expressed her appreciation for the idea of introducing crowding in commercial financing, highlighting its potential to enhance the sustainability of development funding.

The retreat concluded with a shared understanding of the importance of leveraging private investments and utilizing government investment as a catalyst for development. The participants recognized the need for a new financing mechanism to attract private investments, thereby addressing the insufficiencies and inefficiencies associated with current government funding.

As Ethiopia continues its journey towards achieving its development goals, the collaborative efforts between the Government and the Development Partners Group, along with the implementation of the Sustainable Financing Strategy, are expected to play a pivotal role in driving sustainable economic growth and addressing the nation’s pressing challenges.