The World Bank and the African Union (AU) have embarked on a landmark partnership with the official launch of the African Think Tanks Platform (ATTP), a major initiative aimed at enhancing the use of scientific data in policymaking across the continent. Backed by a $50 million grant from the International Development Association (IDA), the project is designed to strengthen the capacity of African research institutions, improve research quality, and close the gap between evidence and policy formulation.

Africa stands at a critical juncture with rapid population growth and an expanding workforce offering immense economic potential. Yet the continent grapples with persistent challenges including extreme poverty, inequality, climate vulnerability, and the urgent need to create jobs for its youthful population. As Samer Al-Samarrai, Lead Economist at the World Bank, explains, addressing these complex issues demands “data-driven, regionally coordinated and grounded policies based on the realities of the continent.”

Abdrahmane Dicko, Director of Programs and Impact at the African Capacity Building Foundation (ACBF), underscored the pivotal role of research institutions in shaping Africa’s future. “The ATTP project is a bold investment in the institutions that will shape the fate of our continent, namely research and development institutions,” he said, noting that this marks the first major investment directly targeting African research and development facilities since 2017.

Echoing this sentiment, Selma Malika Haddadi, Deputy Chairperson of the African Union Commission, highlighted the strategic importance of the platform for realizing the AU’s Agenda 2063. She remarked that achieving the continent’s ambitious development goals “requires more than ambition, it requires data-driven implementation.” Haddadi emphasized that research institutions are not peripheral actors but “important institutions that must be fully integrated into our governance system,” as they serve as critical generators, disseminators, and implementers of knowledge crucial for coordinated action at national, regional, and continental levels.

Haddadi also called on African Union member states to create conducive environments by developing national frameworks that support evidence-based policy, ensuring predictable long-term funding for research institutions, and strengthening institutional ties between national statistical systems, research bodies, and policymakers.

She praised the World Bank’s $50 million grant as “more than a financial contribution” but a symbol of a strategic partnership aligned with Africa’s priorities and leadership. This funding will enable the African Union Commission to establish the necessary structures and systems to operate an effective continent-wide platform, fostering cooperation among policymakers, think tanks, and regional organizations.

The ATTP project seeks to engage African policy institutions, researchers, and knowledge communities to make meaningful contributions to governance and development agendas. Under the initiative, consortia of three to five African think tanks can apply for grants of up to $10 million to collaborate on multi-year, policy-relevant research programs covering thematic areas such as economic transformation and governance, climate change, regional trade, food security, human capital development, and digitalization.

The launch event featured high-level speakers, including representatives from the African Union Commission, African Capacity Building Foundation, AUDA-NEPAD, and the World Bank. The platform is expected to be a game-changer in bridging the gap between academic research and policy formulation, driving evidence-based decision-making that truly reflects Africa’s development realities and aspirations.

A recent report by the United Nations Conference on Trade and Development (UNCTAD) highlights Ethiopia’s urgent need to diversify its economy and reduce reliance on crude goods exports to ensure sustainable growth and stability. The comprehensive study, incorporating data up to fiscal year 2023, underscores challenges linked to Ethiopia’s heavy dependence on raw material exports and calls for accelerated value-adding activities.

According to UNCTAD’s statistics, Ethiopia’s commodity exports totaled approximately USD 3.85 billion during 2021-2023. However, of this, about USD 3.38 billion represented exports of goods that were not allocated to any specific category, signaling a significant concentration in unprocessed raw materials. The report flags a worrisome indicator that exports of all classified products relative to GDP reached just 7.2% in the same period, while income derived from natural resource rents ballooned to 85.4% of GDP in 2020-2021. This points to Ethiopia’s economic dependence on extractive sectors with little downstream processing.

In the composition of exports, agricultural products dominated, accounting for 70.7% of Ethiopia’s exports in 2021-2023. Minerals comprised 10.9%, and energy exports contributed a modest 1.3%. Coffee and coffee substitutes remained the nation’s leading individual export item, representing 30.6% of total exports, followed by oilseeds and oily fruits at 13.7%, and grains at 10.2%.

UNCTAD’s report reiterates the long-standing global concern that continued reliance on raw material exports exposes economies to global commodity price volatility and stifles sustainable industrial development. This challenge is particularly acute for structurally vulnerable countries, including over 80% of low-income and landlocked developing countries, as well as around 60% of small island developing states, of which Ethiopia is an example.

Between 2021 and 2023, UNCTAD notes that two-thirds of the 143 developing countries assessed (95 countries) remained dependent on raw material exports, reflecting slow progress on diversification across much of the developing world.

On the import side, Ethiopia brought in crude goods worth USD 5.19 billion during fiscal years 2021-2023, with food products making up the largest share at USD 3.02 billion. This import pattern highlights Ethiopia’s paradoxical position of exporting agricultural commodities while remaining dependent on food imports.

Human development indicators underline the urgency of economic diversification. Ethiopia’s Human Development Index (HDI) was 0.492 in 2019, while the share of its population living below the global poverty line stood at 22.2% in 2022. Against this backdrop, UNCTAD emphasizes that strategic investments are vital to strengthen the value addition process, expand industrial diversification, and implement sound trade policies that can underpin Ethiopia’s economic resilience and sustainable development.

The report serves as a reminder that breaking out of commodity dependence requires active policy measures fostering industrialization, technology adoption, and diversification beyond the traditional agricultural and mineral sectors. For Ethiopia, such steps would reduce vulnerability to external shocks, generate more stable income streams, and create broader employment opportunities.

UNCTAD’s findings warn that Ethiopia’s current economic structure remains highly vulnerable due to overreliance on crude goods exports. To build a more prosperous and stable future, Ethiopia must accelerate efforts to promote value addition and diversify its export base, maximizing the benefits of its agricultural strengths while developing new industrial capacities.

A new comprehensive study highlights the urgent need for a Credit Guarantee Fund to enhance access to finance for small and medium-sized enterprises (SMEs) in Ethiopia. According to the report titled “Small and Medium Producing Enterprises in Ethiopia: Challenges, Opportunities and Solutions,” such a fund is essential to increase trust among banks and improve lending confidence, thereby unlocking vital funding for SMEs.

The study, led by Netsanet Jote (PhD), Head of Research Development and Management Center at the Policy Studies Institute (PSI), underscores the critical role SMEs play as the backbone of the economy and the labor market. “Productive SMEs are key drivers of national economic growth,” Netsanet emphasized, citing data from the World Bank that estimates SMEs represent roughly 90% of all businesses worldwide and provide over 50% of global employment.

Further, Netsanet noted that formal SMEs contribute up to 40% of gross domestic product (GDP) in developing countries, with the overall impact rising significantly when informal enterprises are included. In Ethiopia, SMEs are instrumental in promoting industrial development, job creation, and inclusive economic transformation.

Despite their importance, Ethiopian SMEs face persistent systemic challenges that constrain their growth and full potential. Limited access to finance and markets, inadequate infrastructure, technological and technical capacity gaps, and bureaucratic and regulatory hurdles combine to hamper their performance, the report found.

Highlighting the finance gap, the study reveals that only 69.5% of surveyed SMEs accessed private bank loans, while 79.7% used savings and loan unions, and 86.4% received financing from the Development Bank of Ethiopia (DBE). However, the availability of loans remains limited by low loan ceilings, lengthy approval processes, short repayment terms, high interest rates, and stringent collateral requirements. Many SMEs also suffer from a lack of credit information and financial literacy, aggravating their challenges in navigating financial systems.

Netsanet pointed out that these constraints result in many SMEs suffering from insufficient working capital and poor credit access, undermining their ability to invest in expansion and innovation.

As a solution, the report calls for the establishment of a dedicated loan guarantee fund designed to build greater confidence among lenders and encourage banks to increase credit provision to SMEs. Netsanet stressed the fund’s potential to reduce lending risks, making financing more affordable and accessible for these enterprises, especially in growth sectors like technology and human capital development.

In conjunction with the loan guarantee fund, the report recommends mandatory credit rationing policies to counteract the traditional bias favoring large corporations, ensuring SMEs receive a fair share of available financial services. Increased leasing finance is also encouraged as a flexible mechanism for SMEs to acquire essential productive assets without heavy upfront costs.

The study concludes that while Ethiopian SMEs acknowledge their pivotal role in innovation, economic expansion, and employment, ongoing funding shortages, infrastructure deficits, and insufficient policy support limit their impact. It advocates for comprehensive strategies that combine enhanced funding access, integrated support services, and improvements in infrastructure to unlock SMEs’ full potential.

By implementing these targeted interventions, Ethiopia stands poised to harness its SME sector as a powerful engine of inclusive and sustainable economic development, bolstering its global competitiveness.