Ethiopia Must Ween Itself Off Aid
It has built dependency, not capacity
In January 2024, the US government released data revealing that it has disbursed nearly $19 billion in development and humanitarian assistance to Ethiopia since 2001. This sizeable figure—Ethiopia earns only around $4 billion from exporting goods each year—raises a critical question: Why, after decades of such substantial aid, does Ethiopia remain so heavily dependent on foreign assistance, with more than 20-million people still in need of life-saving support last year?
Long before the US declared its independence in 1776, Ethiopia was a sovereign nation with its own civilization, language, and governance structures. Moreover, Ethiopia, a country with this rich history spanning over 3,000 years, is a land blessed with abundant natural resources, fertile arable land, and a favorable climate.
Yet, despite these advantages it has been synonymous for decades with dependency, its people caught in a cycle of poverty and reliance on foreign handouts. How did a nation with such potential fall into this paradox?
The answer lies not only in Ethiopia’s internal challenges but also in the way assistance, particularly from the United States Agency for International Development (USAID), has been delivered.
Aid Manipulation
I grew up in a small village in northern Ethiopia near to the ancient rock-hewn churches of Lalibela. There I witnessed firsthand the contradictions of a nation rich in resources yet poor in outcomes. My family, like many others, relied on agriculture. We grew teff, wheat, maize, and other crops, not just for sustenance but also for sale.
Yet, over time, I saw how the system was failing. The government, through local kebele officials and manipulative political system, started to distribute aid, and with it came a new dynamic—dependency. Many people have failed to overcome their addiction.
USAID, established in 1961 under the Foreign Assistance Act, was created to promote democratic values, reduce poverty, and advance global peace and prosperity. In Ethiopia, however, the reality has often fallen short of these lofty goals.
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Instead, US assistance at times has been used as a bargaining chip to influence Ethiopia’s leaders. In addition, local officials have used aid to consolidate power and suppress dissent. Opposition parties report that the Ethiopian People’s Revolutionary Democratic Front (EPRDF) and its successor, the Prosperity Party, uses aid to reward loyalty and marginalize opposition. In doing so, it has undermined the democratic values that USAID claims to promote.
A 2004 Human Rights Watch report highlighted how kebele officials used aid disbursement as a tool to reward loyalty and punish dissent. Eligibility for food assistance, healthcare, and agricultural inputs was often determined by political affiliation, with those perceived as opposition supporters systematically excluded.
This misuse of aid reached a new low in 2023 when USAID officials suspended assistance after discovering that thousands of tons of donated grain had been diverted to commercial markets by Ethiopian officials.
Stagnant Agriculture
While the agency claims to promote agriculture through initiatives like Feed the Future, the reality on the ground tells a different story.
I started my elementary classes 28 years ago hearing that agriculture constituted 85 percent of the economy and was almost entirely smallholder farming. Yet, after almost 25 years, a 2020 study by the Food and Agriculture Organization shows that smallholder farming still accounts for 95 percent of production and 85 percent of employment.
Aid hasn’t prioritized bringing farmers together to pool their resources and equipping them with tools like tractors and combine harvesters to increase efficiency and yield. Mechanized farming is still absent in many parts of Ethiopia, including the three district administrations—woredas—that I know personally. This is despite donor support for modernization initiatives like the Ethiopian Agricultural Transformation Agency.
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While the government touts success in managing macroeconomic reforms and curbing inflation, it’s too soon for a victory lap—economic reality tells a more murky story.
As a result, many still rely on handouts, a model that wastes the productive time of farmers. I remember my family traveling to the grain warehouses multiple times a week, only to face lengthy delays and preconditions imposed by officials.
Unhealthy Relationship
The health sector, often touted as a success story, also still faces significant challenges. While USAID has contributed to reducing maternal mortality and combating diseases like HIV and malaria, malaria outbreaks continue to occur, and healthcare remains underfunded and overstretched.
Ethiopia has received support from both multilateral and bilateral organizations. While the World Bank, for example, focuses more on systemic changes, USAID’s scope is narrower. The World Bank predominantly works directly with governments, whereas USAID collaborates with NGOs and contractors.
USAID’s collaborations, in some cases, have become a lucrative business opportunity for local civil society organizations. There is reason to think that some of these CSOs are established primarily to exploit funding from organizations like USAID, rather than to drive meaningful development.
Lousy Workshops
Anyone regularly visiting hotels in Ethiopia’s cities would probably see workshops with banners hanging on the walls that read ‘Supported by USAID’. Such gatherings have become a common sight. However, the effectiveness of them has been questioned.
In cities like Addis Ababa, Bishoftu, and Adama, it is common to see these USAID-funded workshops and training sessions in luxurious hotels, with participants receiving generous per diems and USAID employees driving expensive cars, and living in upscale apartments.
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One cannot help but wonder how much of the aid money is consumed by such events and administrative costs and whether these activities are ever properly audited. For many Ethiopians, USAID’s lavish spending has been a subject of concern, for a few it has been a path to riches.
Employees and the organization argue that the salaries are competitive and aligned with international standards. Critics argue that a substantial portion of aid is consumed by the cost of managing programs and does not reach beneficiaries.
Missed Opportunity
USAID’s mission statement emphasizes support for democracy, human rights, and good governance. Yet, in Ethiopia, the results have been disappointing.
The media landscape is dominated by government-controlled outlets, with fewer than 100 media outlets serving a population of 130 million. Civil society organizations remain weak, as do political parties.
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If USAID’s assistance had been more focused on providing support to civil society and media, maybe we would not see their current insignificant presence and limited contribution to democratization in Ethiopia.
USAID had the opportunity to play a transformative role in addressing these challenges. It could have provided funding for investigative reporting and done far more to promote media pluralism.
Self-Reliance
The recent decision by President Trump’s government to shutter USAID indicates that the time has come for Ethiopia to break free from the cycle of aid dependency. Its abundant resources—its land, water, and people—are more than enough to address its socio-economic challenges.
Ethiopians need to take ownership of their future, showing the political will and public determination to break free This will require not only a change in how aid is delivered but also a fundamental shift in the mindset of both donors and recipients.
Only then can Ethiopia truly realize its potential as a prosperous and independent nation.
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While this commentary contains the author’s opinions, Ethiopia Insight will correct factual errors.
Main photo: A graffiti on a rock in a countryside in Ethiopia where residents participate in USAID-supported Safety Net program.
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Crédito: Link de origem