Ethiopia - Country Partnership Framework - FY27-FY36 - Building Strong Foundations for More and Better Jobs

Jul 19, 2026

Ethiopia’s Country Partnership Framework (CPF) for FY27–FY36 supports the World Bank Group’s agenda to advance Ethiopia’s transition toward private sector-led growth that expands productive employment and builds resilience. It frames the central challenge as creating private sector jobs at scale amid past slowdown driven by insufficient private investment and heavy reliance on state-led public investment. The CPF emphasizes macroeconomic reforms plus business-enabling actions across foreign exchange predictability, competition, trade and logistics, energy reliability, finance, and trust in regulation, while accounting for conflict and climate pressures.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages10

Reading Time25 min

Overview and Objectives

Job Creation at Scale and Transition Context

Macro Reforms and Business-Enabling Priorities

Foreign Exchange, Competition, Trade, Energy, and Finance

Risks and Development Constraints

Conflict, Climate Stress, and Human Capital Challenges

Public Disclosure Authorized Pub lic Disclosure Authorized Country Partnership Framework Document of The World Bank Group FOR OFFICIAL USE ONLY Report No. CPF0000018 INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL FINANCE CORPORATION AND MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY PARTNERSHIP FRAMEWORK FOR THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA FOR THE PERIOD FY27-FY36 [P501383] Ethiopia, Eritrea, South Sudan and Sudan Country Management Unit Eastern and Southern Africa Region, The World Bank Ethiopia, Malawi & Zambia Africa Regional Vice-Presidency, The International Finance Corporation The Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. 1 Official Use Only | | IBRD | IFC | MIGA | | --- | --- | --- | --- | | Vice President: Country/Regional Director:<br>Task Team Leader(s): | Ndiame Diop<br>Maryam Salim Irina Gabrial | Ethiopis Tafara<br>Mary Porter Peschka Madalo Minofu | Ed Mountfield<br>Moritz Nikolaus Nebe Conor Healy | 2 Official Use Only COUNTRY PARTNERSHIP FRAMEWORK FOR ETHIOPIA FY27–36 Building Strong Foundations for More and Better Jobs Ethiopia’s next chapter matters for Africa and beyond. As the continent’s second most populous country and a major economy in the Horn of Africa, its transition toward a more competitive, privateinvestment-led growth model will shape job creation, trade, connectivity, and stability far beyond its borders. The opportunities created by the African Continental Free Trade Area (AfCFTA) reinforce that role. Strong air connectivity across Africa, substantial renewable energy potential, expanding transmission networks, and a strategic position in regional logistics give Ethiopia the foundations to become a stronger platform for commerce and investment if reforms enable firms to compete and grow. This World Bank Group (WBG) Country Partnership Framework (CPF) supports Ethiopia’s transition toward private sector-led growth that expands productive employment and builds resilience. Over the past two decades, Ethiopia has been one of Africa’s fastest-growing economies, with per capita gross domestic product (GDP) growth averaging nearly 6.2 percent between 2004 and 2024. Resilient growth, despite multiple domestic and global shocks, reduced poverty and supported large expansions in infrastructure and basic services, but it relied heavily on state-led public investment and did not generate sufficient private investment and productive employment, leading to a slowdown in growth since 2019 as public finances declined and private investment could not substitute. Recent shocks highlighted the need to rebalance the sources of growth toward a more dynamic and resilient private sector. This CPF focuses on Ethiopia’s central challenge: creating private sector jobs at scale. Anchored in Ethiopia’s development vision, the CPF supports the country’s aspirations for inclusive, private sectorled growth and is closely aligned with the Home-Grown Economic Reform Agenda (HGER 2.0) and the Ten-Year Development Plan (2021–2030) . About two million people enter the labor market each year, but formal employment growth is too weak to absorb them. With stronger private investment, firm entry, and firm expansion, Ethiopia can accelerate poverty reduction, absorb a fast-growing workforce, reduce fragility, and make reforms deliver for households through higher incomes and better living standards. Aten-year framework is appropriate given the scale of this challenge and ambition of Ethiopia’s transition goals. It will allow for the right sequencing of investments, policies, and institutional reforms. The country is at a turning point. The renewed macroeconomic reforms launched in July 2024 mark a shift toward a more market-oriented framework. Exc

FAQs

What is the core goal of Ethiopia’s Country Partnership Framework for FY27–FY36?

The CPF focuses on creating private sector jobs at scale by supporting a shift toward private sector-led, more inclusive and resilient growth.

Why does the CPF emphasize rebalancing growth sources?

Recent shocks show that growth relied too heavily on state-led public investment, without generating sufficient private investment and productive employment, leading to slowdown and greater fragility.

Which reforms are considered necessary beyond macroeconomic stabilization?

Business-enabling reforms are needed to raise returns to investment and labor, including more predictable access to foreign exchange, stronger competition, improved trade and logistics, more reliable energy, deeper financial intermediation, and a regulatory environment firms can trust.

Jul 19, 2026

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