EU and Ethiopia in Amicable Strategic Partnership

Ethiopian Prime Minister Hailemariam Desalegn and European Commission President Jean Claude Junker have signed an agreement on strategic engagements in the areas of regional peace and security, countering terrorism and violent radicalisation, migration, social and economic development, investment and trade, governance and human rights as well as climate change and environmental cooperation in Brussels on the 14th of May 2016, during the 10th edition of the European Development Days (EDD).

Historically, EU-Ethiopia development partnership formally kicked off in 1975, the year when Ethiopia signed the Lomé Convention. Ethiopian Permanent Mission to the EEC was opened in Brussels in 1979. The European Commission opened its Delegation in Ethiopia the same year and has since then taken the lead in supporting Ethiopia's economic development both financially and technically with the objective of eradicating poverty through sustainable development, democracy, peace and security.

During both the imperial and the Derg regimes, foreign relations priorities of the nation were neither clearly defined nor subject to mutual accountability. During the Derg regime in particular, it was directed to achieving military supply. Priority was mainly given to the military needs of the military government and the socialist ideology, disregarding the economic priorities of the country. These situations and foreign policy objectives have seriously affected Ethiopia's relation with the EU and have caused considerable disservice to the nation's economic development.

The 1991 foreign policy orientation of Ethiopia introduced a shift in foreign policy and national security objectives. The new paradigm focuses on economic development and democratization. The foreign policy of the nation, as stated in the foreign policy document of the country states that:

"There has been some failure to gear our relations with the EU toward expanding trade and investment in the country. The main reason for this is our poor image in Europe. Ethiopia is perceived as a country wracked by protracted war and poverty rather than a potential destination for investment and trade, and the efforts deployed to correct the image have not been adequate"

The European Union has been supporting a myriad of development programmes in Ethiopia based on the Africa-EU strategic partnership and the Cotonou Agreement, which define relations between the EU and Africa collectively, and between the EU and the African, Caribbean and Pacific Group of States (ACP) countries as provided in Article 8 of the Cotonou Agreement which stipulates the basis for political relations and dialogue between Ethiopia and the EU.

The cooperation between the European Economic Commission and Ethiopia began as far back as 1973, when the EEC financed a food aid programme designed to help the country cope with the serious drought occurred at the time. Subsequently, the Imperial government entered into negotiations with the EEC for the First Lome Convention (the first framework of multilateral co-operation that governed relations between EEC and ACP states until 2000).

The European Union has been supporting Ethiopia's development programmes through various EU establishments including the EU Development Funds and the European Investment Bank (EIB).

The EIB provided loans for commercially viable projects in the areas of telecommunications, aviation and energy. In addition, a global loan was provided to the Development Bank of Ethiopia (DBE) to finance small and medium sized enterprises. The development cooperation has focused mainly on priority sectors such as agriculture, food security, infrastructure as well as health and education, making Ethiopia one of the major beneficiaries of the EU's development assistance.

The EU is one of Ethiopia's major development partners in the social, economic and trade sectors. In the macro-economic sector, the Protection of Basic Services (PBS) programme; Public Sector Capacity Building Program (PSCAP); Public Expenditure and Financial Accountability (PEFA) mission; Monitoring & Evaluation (M&E) Pool Fund and Export Stabilization Fund (STABEX) are the main means of the support. The Education Sector Development Program (ESDP); Polio Eradication Program; Mine Action and Social Rehabilitation Program; NGO Projects on Education, Health, Gender and Children's Rights are the main means of support in the social arena.

Furthermore, the EU is one of Ethiopia's major trading partners both in terms of export and import. Trade Capacity Building (TCB) Programme; Micro-and Small Enterprise Development Program (MSEDP); Economic Partnership Agreement (EPA) Impact Assessment Studies; World Trade Organization (WTO) Impact Assessment Project and NGO Projects on Micro-Financing are major means of partnership in the private sector development and trade sector.

Reports indicate that the EU is by far the most important trade partner of Ethiopia. Ethiopia's exports to the EU represented 43 per cent of its worldwide exports as of 2011. In comparison, the share of China was (13 per cent), while Saudi Arabia, USA and Sudan received (7 per cent), (5 per cent) and (5 per cent), respectively, of Ethiopia's exports. Similarly, 21 per cent of Ethiopia's imports came from the EU in 2011, which is huge compared to other important trade partners; Saudi Arabia (16 per cent), China (16 per cent), USA (12 per cent) and India (7 per cent). ( Habiba Ahmed, 2015)

The European Union is one of the major donor partners of Ethiopia which contributes about 230 million Euros a year, representing 10 per cent of the total annual Official Development Aid received by Ethiopia. Jointly with the support of Member States, the European Union makes available around 34 per cent of the total aid assistance, which makes on the average 800 million Euros to Ethiopia. Moreover, EU represents all together about 17 per cent of the resources of the Promotion of Basic Services and 31 per cent of the Productive Safety Net Programme of the country, two flagship programmes well known worldwide and delivering impressive results. ( Habiba Ahmed 2015)

The European Commission has since the early days of its cooperation with Ethiopia provided substantial support for the infrastructure sector. In 2006, it decided to provide budget support to this sector. The European Commission's support to the Road Sector Development Programme has strong synergies with other sectors.

For instance, rural development and food security is supported by the development of rural roads, while private sector development is supported by capacity building of the domestic construction industry. Good Governance, Democracy and Human Rights, Empowerment of Civil Society, and Cooperation with Non State Actors are also key priorities for the EU.

The EU has been financing a vast array of food aid, emergency, relief and rehabilitation operations, and long-term food security and rural development programmes in Ethiopia.

In this regard, the mutually agreed cooperation strategy, presented in the 10th European Development Fund's Country Strategy Paper for Ethiopia had been significant with allocation of some 644 million Euro for the country in areas such as transportation, rural development, decentralized social services, trade, gender, and environmental conservation.

The EU is involved in the migration issue through two projects which started in 2012, with a total budget of 2,850,000 Euro. The first one called "Development of a tripartite framework for the support and protection of Ethiopian and Somali women domestic migrant workers to the Gulf Cooperation Council States, Lebanon and Sudan" has been implemented by the International Labour Organization (ILO). The another one called "Strengthening Criminal justice responses to trafficking in persons and smuggling of migrants in Ethiopia and Djibouti" and has been implemented by the United Nations Office on Drugs and Crime (UNODC). The projects aim to promote safer labour migration and protect the rights of migrant domestic workers.

Mining activities are financed and implemented by the Ethiopian Mine Action Office (EMAO). In this regard, the EU has brought 15 million Euro to finance mine-clearing work, i.e. the elimination of all mines from Afar, Tigray, and Somali states. Ethiopia is expected to be mine-free by 2015.

The Ethiopia-EU cooperation took a leap with the signing of the 11th EDF (European Union Development Fund) National Indicative Programme (NIP) which covers 2014-2020. It provides an initial 745 million Euros to support government-led programmes in Ethiopia and is aligned to the broad objective of the Growth and Transformation Plan (GTP) and the Climate Resilient and Green Economy (CRGE) strategy and deals with the specific objectives of sector plans in the focal areas of cooperation. (Habiba Ahmed, 2015)

EU's investments in Ethiopia over the last 20 years have accounted to almost 24 billion birr. With around 1 billion USD per year, the EU, via its Commission and the member states, provide around 1/3 of Oversees Development Assistance to Ethiopia and is taking the lead in progressively using the country's systems and working towards aid effectiveness. EU-Ethiopia comprehensive relations is therefore expected to grow over the coming years.

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