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Integrated SDG Insights

Ethiopia

UNDP’s Integrated SDG Insights explore how to achieve the SDGs by 2030. So that no one is left behind.

How To Read This Report

‘SDG Insights’ playbooks transcend development “as usual,” and leverages data innovation, AI and systems analysis to chart credible pathways that help countries meet the 2030 Agenda.

SDG Moment This section provides an overview of a country's economic growth trajectory, with new insights on sustainability and inclusiveness of growth pathways.

SDG Trends & Priorities This section builds from the foundation of national SDG progress and uses machine learning to analyse national development ambition with an SDG lens.

SDG Interlinkages Combined, these insights are mapped against SDG interlinkages to define policy choices the accelerate SDG progress, tailored to national context.

Finance & StimulusThese policy choices are made against fiscal constraints and opportunities for stimulus mapped in this section to ensure choices translate to development impact and leave no one behind.

1. SDG Moment

While economic growth is a key element in achieving the SDGs, many countries are intent on moving beyond growth as a yardstick for progress. In the short run, growth enables the SDGs; but in the long run, the SDGs aim to transform the pattern of growth itself.

GDP Growth Pathways

People

Poverty: Percentage of the population under each threshold (PPP$ a day).

Data not available.

Planet

Carbon Intensity: CO2 emissions intensity of GDP (tCO2 per PPP $1,000).

Ethiopia’s pace of growth during the cycle 2023-2025 is projected to be in acceleration, at twice the global growth rate; though still below the country’s growth performance forecast before the pandemic. Accordingly, Ethiopia’s commitments to achieving the SDGs are focused on ensuring it becomes Africa's beacon of prosperity. 

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While this pace of growth is projected to reduce the incidence of poverty, Ethiopia remains committed to sustained growth while managing risks. Given there are risks that Ethiopia’s growth cycle may negatively impact the environment, through its climate resilience green economy strategy the country will continue to green its investments, to restore macroeconomic stability and to ensure a conducive investment climate.

3. SDG Interlinkages

Maps synergies and trade-offs of national priorities to the most relevant SDG targets to chart policy pathways with most potential to accelerate progress.

2.4: Sustainable food production and resilient agricultural practices

Two-third  (67%) of Ethiopia’s labour force is in agriculture.  Modernizing agriculture is therefore seen as a way to improve agricultural wages (target 8.5). It will also improve food production to ensure security in food and nutrition (target 2.2).

The focus does demonstrate areas of co-investment to ensure progress, including for example fostering climate-resilience (target 13.1), local manufacturing of agriculture tools (target 9.2), encouraging private sector participation (target) and trade (target 17.11).

It also requires co-investment in availability of reality data (target 17.18), for which government has initiated a process of conducting the next agricultural census. This will in turn provide guidance for policy coherence (target 17.16) across the SDGs. It will also help improve the GDP estimates that will determine drivers for economic stability (target 17.13) for the local authorities.

7.1: Universal access to modern energy

Access to affordable and reliable energy is considered a critical enabler for Ethiopia. It will help reduce poverty (target 1.1), create jobs (target 8.5), supports value addition (target 9.2) and, above all, empowers women (target 5.4). However, it is important that the potential negative impacts on the environment (target 13.1) are taken into account.

Ethiopia’s investment in energy is to provide the economy with quality electric power service that is accessible, equitable and affordable (target 11.1); and to expand the required infrastructure (target 9.1). Additional policy combination is will be to invest in opening up rural areas (target 11.1) so as to receive clean energy technologies (target 7.2). Ethiopia will explore opportunities for financing from multiple sources (target 17.3) to ensure a healthy financial position of the energy sector.

One of the targets is to increase the number of electricity customers from 5.8 million to 24.3 million, which is a significant increase. Even with this significant expansion in customers, there will be room to increase the figure still further.

8.5: Full employment and decent work with equal pay

Over 70% of Ethiopia's 120 million population is below the age of 30 and two to three million  join the labour force every year.  With more people in rural areas, the challenge of creating jobs is real.

The combination of policy pathways to create job opportunities include investing in rural areas (target 11.1), which also means addressing pockets of conflict (target 16.1) across the country. In fact, peace is a requirement especially in rural areas​. Investment in value addition (target 9.2) will drive jobs while at the same time ensuring progress on sustainable industrialization.

While statistics show the national unemployment rate at 8%, investment in data (17.18) to better characterize the job market will help to understand which sectors have the potential for decent jobs.

9.2: Promote inclusive and sustainable industrialization

One of the key pillars of the TYDP is enhancing the  productivity and competitiveness of the Ethiopian economy for ensuring quality growth and shared prosperity.  The sectoral focus of the home-grown economic reform agenda includes investments in agriculture value addition (target 2.4), manufacturing (target 9.4) and mining (target 12.2) which are the bases for inclusive and sustainable industrialization. These investments are critical to the well-being of citizens, to creating jobs (target 8.5) and  to addressing macroeconomic challenges (target 17.13), such as ensuring quality and sustained growth, fighting  inflation, and addressing both foreign exchange problems and the fiscal space.

Ethiopia does recognize the trade-offs associated with promoting industrialization, with the environment most likely to be negatively impacted. Through its Climate Resilience Green Economy strategy, Ethiopia, together with its partners, will  continue to green its investments.

The country is well aware of the impact of climate-related challenges as it is one of the drivers of conflict within Ethiopia’s borders. The nation will continue to pursue green industrialization to mitigate any trade-offs.

15.1: By 2020, ensure the conservation, restoration and sustainableuse of terrestrial and inland freshwater ecosystems and their services.

By prioritizing Target 15.1 in its 2021-2025 National Development Plan, Ecuadorreaffirmed the significance of protecting and preserving terrestrial ecosystems andtheir biodiversity. This includes recognizing that the investment projects intendedto fulfil Target 15.1 will not only contribute to achieving the SDGs 13, 14 and 15, butwill also help restore ecosystems that underpin the availability and comprehensivemanagement of water resources (SDG 6) and promote their sustainable use (Target12.2). Additionally, it will also foster the generation of new energy from renewablesources (Target 7.2).

To this end, Ecuador seeks to strengthen the management of the National Systemof Protected Areas through its 2022-2032 Strategic Plan and the implementationof the National Forest Restoration Plan 2019-2030. These instruments serve as thetechnical, legal and financial foundation for executing local forest restorationprocesses with a landscape vision, with an overall goal of covering 30,000hectares through its projects. Considering that the proportion of national territoryunder conservation or environmental management, as of 2022, stands at 22.1%, itis necessary to mobilize additional financial resources from various sources andestablish robust governance (Target 17.3) to intensify the care of protected areas.This ensures the conservation of natural and cultural resources, genetic flows, theprovision of environmental services for the benefit of the population and thealignment of policies on the ground.

Futures Scenarios

SDG Push is a futures scenario based on 48 integrated accelerators in the areas of Governance, Social Protection, Green Economy and Digital Disruption. It uses national data to explore the impact on human development by 2030 and 2050 across key SDG indicators. It does this by using ‘International Futures,’ a systems model designed to explore interactions across development systems.

Poverty <$1.90 Per Day (Number of People)

Malnourished Children Under 5 (Number Of Children)

Malnourished Children Under 5 (Number Of Children)

4. Finance and Stimulus

Many countries are facing reduced fiscal space, high debt levels, rising interest rates and downgrades on credit ratings. Fiscal and financial constraints tend to slow or even reverse SDG progress.

Ethiopia's gross government debt is projected at 37.6% of GDP in 2023 and thus more than 10 percentage points below the low-income developing economies (LIDC) group average of 48.3%. With a projected 8.9% of GDP this year, Ethiopia collects less than two thirds of the LIDC group’s 14.9%.

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This year Ethiopia is projected to spend nearly 20% of revenue on public external debt servicing, which is significantly higher than the LIDC average of 14.1%. Ethiopia is one of four countries that have signed up to restructure its debt under the G20’s Common Framework for Debt Treatments, and negotiations are still ongoing. The country’s credit rating is in default territory. According to the latest World Bank and IMF DSA from May 2020, Ethiopia was assessed at ‘high risk’ of debt distress.

SDG Stimulus

The UN Secretary General’s SDG Stimulus Plan lays out a blueprint for action within the existing financial architecture. It includes:

  • Providing liquidity to support recovery in the near term
  • Enhance debt relief for vulnerable countries.​
  • Expanding development financing by MDBs
  • Align financial flows with the SDGs and Paris Agreement, according to country-level priorities and needs, for example through the rollout of the UN Integrated National Financing Framework (INFFs).

Given the projected fiscal and financial constraints faced by

Ethiopia

possible funding options for the investments derived from the identified interlinkages are as follows:

  • Tax and revenue reform
  • Debt for SDGs
  • Climate finance
  • Blended and public-private finance
  • SDG-aligned business environment and investment
  • Accessing financial markets and insurance
  • Remittances, philanthropy and faith-based financing

Methodology & Data Sources

Click here to view the Methodological Note for the Integrated SDG Insights.

This report is the result of a global exercise carried out using artificial intelligence to identify SDG priorities based on 10 national government documents, together with SDG progress and SDG interlinkage analysis. The implementation and monitoring of the 2030 Agenda in Argentina should be consulted in the Country Reports and National Voluntary Reports.

SDG Moment

Methodology
Assesses challenges and opportunities in national growth trajectories with insights on environmental sustainability and inclusiveness.

Data Sources
Future trajectories to 2025 are based on IMF-WEO GDP projections, distributions of per capita income or consumption from the World Bank, and CO2 emissions from the Global Carbon Budget 2022 and EDGAR (JRC and IEA).​

Trends & Priorities

Methodology
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Data Sources
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Interlinkages

Methodology
SDG trends tracks progress from 2015 to date for the 231 indicators. National priorities are analysed using machine learning to reveal the most prominent SDGs referenced in national policy documents.

Data Sources
The exercise globally considered a total of 454 documents published from 2015 to August 2022. (Miola et al., 2019 updated in 2021-2022)​

Finance & Stimulus

Methodology
Provides insight into indicators of fiscal and financial stress with options (INFF) for stimulus and other means to accelerate progress.

Data Sources
Most recent resource data from UNU-WIDER GRD (between 2018 and 2021), debt and revenue from IMF WEO (between 2020 and forecasts for 2023), external debt from IDS (2023), yields from Haver Analytics (8 June 2023), credit ratings from S&P, Moodys and FITCH (2023), and DSA ratings from World Bank/IMF (31 May 2023).