This evaluation assesses the relevance, effectiveness, and adaptability of the World Bank Group’s support to Ethiopia from FY 2013 to FY 2023. The report evaluates how well the Bank Group supported the country in meeting its core development needs amidst an evolving context and a changing set of challenges. The report also examines the effectiveness of the Bank Group’s efforts in supporting private sector participation in Ethiopia and strengthening the country’s resilience to climate change.

Using a theory-based contribution analysis and a mixed-methods design, the evaluation triangulates findings from multiple evidence sources, including portfolio review, document reviews, semi-structured interviews, survey of project teams covering 48 unique projects, and geospatial analysis.  

The evaluation finds that the World Bank Group’s country engagement demonstrated resilience in a changing context, achieving important outcomes. The report identifies lessons to inform future Bank Group engagement in Ethiopia and other countries facing similar development challenges. 

Background and Context 

Conflict, repeated crises, and growing macroeconomic imbalances pushed Ethiopia from being one of the world’s fastest-growing economies into a country facing macroeconomic and debt distress. This shift slowed efforts to reduce poverty and worsened human capital outcomes in the country. In addition, Ethiopia’s risk from extreme weather caused by climate change worsened on account of stalled economic transformation, leaving many people dependent on rain-fed subsistence farming. Political instability—marked by armed conflicts between the central government and forces in Tigray, Amhara, and Oromia—led the World Bank Group to classify Ethiopia as fragile and conflict-affected in FY 2022. See more in Chapter 1. 

Evolution of the World Bank Group’s Engagement in Ethiopia 

The World Bank Group operated in Ethiopia under challenging and evolving conditions of macroeconomic instability, conflict, and differing views with the national government on reforms. The Bank Group’s strategies aligned with national goals, and it adjusted its approach to evolving government priorities, but it struggled to adapt quickly to sudden changes in the security situation. The Bank Group’s analytic work took a pragmatic approach focusing on areas of mutual agreement with the government, but it was less effective in promoting major reforms in sensitive areas like macroeconomic policy. It led technical and sector groups successfully, attracting partner funding. With the start of the Tigray conflict, however, the Bank Group’s ability to convene development partners weakened as the security strategies of partners diverged. This limited the Bank Group’s convening role during the crisis. See more in Chapter 2. 

The World Bank Group’s Efforts to Expand Ethiopia’s Private Sector 

During the early evaluation period, the Bank Group adapted to a constrained policy environment by supporting private sector development in areas where dialogue and engagement were feasible, such as through advisory services and analytics, and projects on small businesses and industrial parks. When windows for reforms briefly opened in 2018, the Bank Group launched the Growth and Competitiveness policy series to strengthen macroeconomic stability and private sector growth, achieving some successes before momentum slowed and policies reversed during the period of ensuing conflict and crisis. See more in Chapter 3. 

The World Bank’s Efforts to Build Ethiopia’s Climate Resilience 

The World Bank increasingly focused on climate resilience, especially in land management, agriculture, and safety nets. It helped expand sustainable land management across Ethiopia, helping reduce land degradation and improve vegetation. The Bank mainstreamed climate resilience into its agriculture and rural development efforts with good results, though irrigation efforts were less successful. The Bank’s long-standing support for the Productive Safety Net Program improved food security for vulnerable households and offered an alternative to emergency food aid. The program, however, continues to rely on external funding and was unsuccessful in graduating beneficiaries from the program. See more in Chapter 4. 

The evaluation offers four lessons to inform future Bank Group engagement in Ethiopia. These lessons are also relevant to other countries facing similar development challenges.