Ethiopia - Country Partnership Framework for the Period FY2027-FY2036 - Annex 3 - Fragility Strategic Considerations

Jul 19, 2026

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Annex 3 outlines strategic considerations for fragility in Ethiopia within the CPF FY2027–FY2036 period. It explains how state-formation history, political contestation, center–periphery grievances, macroeconomic transition, climate shocks, insecurity, and disputes over resources and boundaries intensify conflict dynamics. It describes government reforms and a National Dialogue Commission, and presents how the WBG will reduce fragility via CPF strategic outcomes and an expanded operational toolbox, including risk monitoring, adaptability, remote monitoring, differentiated delivery, and strengthened conflict sensitivity.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages2

Reading Time5 min

Fragility context in Ethiopia

Key drivers and escalation dynamics

Government reforms and dialogue mechanism

WBG strategy to reduce fragility risks

CPF strategic outcomes and contribution channels

Private sector and jobs agenda

Strengthening the WBG operational toolbox

Forward-looking risk management

Adaptability and remote monitoring

Differentiated approaches and conflict sensitivity

Public Disclosure Authorized Pub lic Disclosure Authorized Annex 3-Fragility: Strategic Considerations for the Ethiopia CPF11 A complex history of state formation continues to shape fragility dynamics in Ethiopia. As a populous country with rich ethnic, religious, and linguistic diversity, Ethiopia has long faced debates over how best to manage governance arrangements, including the balance between national cohesion, regional autonomy, representation, and inclusion. Entrenched political contestation and center–periphery grievances over services and representation have contributed to recent escalations of conflict, including in Tigray during 2020–2022 and in parts of Amhara and Oromia. These challenges are compounded by a difficult macroeconomic transition, recurrent climate shocks, localized insecurity, competition over boundaries and natural resources, and, at times, turbulent geopolitical and displacement contexts. The government has taken steps to respond to the country’s layered challenges, including reforms to address macro-fiscal imbalances and improve social spending, public accountability, trade practices, land and property policies, and refugee hosting. A National Dialogue Commission has been established, with a mandate to facilitate consultations across Ethiopian society, create a system for deliberating core national issues, and develop recommendations as a basis for national consensus and state-building. The government’s reform agenda presents an opportunity to place Ethiopia on a more stable trajectory, though further efforts are needed to strengthen institutions, policies, and implementation frameworks for macroeconomic management—including inflation management, domestic revenue mobilization, and financial intermediation—enable sectors such as logistics, energy, and telecoms; and enhance planning, accountability, transparency, and inclusion. The WBG’s strategy over the coming ten years will aim to reduce and mitigate fragility risks in Ethiopia through two channels: the substance of its strategic outcomes and a strengthened operational toolbox to support more effective portfolio implementation. CPF Strategic Outcomes Contribution to Reducing Fragility CPF outcomes will address fragility risks through the parts of the development agenda that the WBG can influence. First, creating quality jobs at scale can expand productive opportunities for young people and underserved communities, reducing economic exclusion. Second, institutional strengthening in public financial management, land administration, accountability, transparency, and private investment can help reduce spatial, sectoral, and demographic inequities and improve how the benefits of growth are distributed. Third, regional economic integration can support the jobs and growth agenda while strengthening productive economic relationships with neighboring countries. Fourth, human capital interventions can improve access to services and opportunities for underserved groups and areas. Recognizing the limits of the WBG’s role in security sector issues and core nation-and state-building processes, the WBG will use partnerships, policy dialogue, analytics, and convening power to support government and partner efforts where development engagement can make a practical contribution. Private sector development can also play an important role in building resilience through job creation, economic inclusion, and improved access to basic services. The CPF will support private investment in underserved areas and job-rich sectors such as agribusiness, light manufacturing, housing, and domestic pharmaceuticals. It will also leverage private capital to help rebuild infrastructure and strengthen value chains in conflict-affected areas where conditions allow. Enabling job creation for a growing population will require support to MSMEs, including capacity building, regulatory reforms, and improved access to finance. 11 This annex is based on a Risk and Resilience

FAQs

What are the main drivers of fragility described for Ethiopia in this annex?

The annex highlights state-formation history, political contestation, and center–periphery grievances, compounded by macroeconomic transition, climate shocks, localized insecurity, and disputes over boundaries and natural resources.

How does the WBG plan to reduce fragility risks over FY2027–FY2036?

It focuses on CPF strategic outcomes it can influence—jobs, institutional strengthening, regional integration, and human capital—while using partnerships, policy dialogue, analytics, and convening power where direct security or state-building roles are limited.

What operational improvements will the WBG make during the CPF period?

The annex calls for stronger risk management with forward-looking monitoring, greater adaptability through portfolio flexibilities, enhanced remote monitoring with geospatial and third-party tools, differentiated approaches in conflict-affected areas, and continuous conflict sensitivity updates across dialogue and project preparation.

Jul 19, 2026

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