Ethiopia’s plan to modernize its sugar industry through large-scale irrigation projects is facing serious challenges that jeopardize the country’s goal of self-sufficiency and becoming a sugar exporter. A recent study presented at a workshop on May 15, 2025, revealed deep-rooted operational, financial, and institutional problems undermining irrigation efforts in key sugar factories.

The study, led by Mekonnen Bekele (PhD) of the Policy Study Institute (PSI), highlighted that while some plants like the River Sugar Factory show relatively better irrigation use, others such as Kessem and Tana Beles sugar factories are irrigating only a fraction of their targeted land-16.2% and 17.5% respectively-mainly due to community conflicts and other operational issues. This limited irrigation has caused a sharp decline in production capacity.

Cost overruns in irrigation projects, largely due to design changes and poor construction quality, have increased expenses by 78%. Additionally, small irrigation systems widely promoted in the early 2000s suffer from structural flaws and poor site selection, leading to significant water loss through evaporation and runoff.

Financial constraints also hamper progress. Farmers often rely on cooperative loans for maintenance but lack sustainable funding and credit options. Limited private sector involvement and a shortage of skilled labor further complicate project sustainability.

A critical issue raised by PSI is the extremely low water tariff for sugarcane irrigation-only 0.003 Ethiopian birr per cubic meter in 2022, far below the estimated economic value of 2.55 birr. Revising water pricing could generate an estimated 601 million birr in revenue, helping to improve project viability.

Mekonnen stressed that addressing these multifaceted challenges requires improved design and construction, realistic financial planning, stronger institutions, genuine community engagement, and equitable water pricing. Only through such comprehensive reforms can Ethiopia achieve its sugar production goals and secure the long-term sustainability of its irrigation-dependent sugar industry.

Wegagen Bank, one of Ethiopia’s leading private financial institutions, has signed a landmark cooperative agreement with the International Finance Corporation (IFC), marking a significant step in its strategy to modernize operations and expand its international footprint. The agreement was formalized during the prestigious African CEO Forum 2025, held in Abidjan, Côte d’Ivoire, an annual summit that brings together influential leaders to address Africa’s pressing economic and financial challenges.

The signing ceremony, attended by Wegagen Bank CEO Dr. Aklilu Wubet and IFC’s Regional Director for East Africa, Mary Porter, underscored the importance of the partnership for both institutions. The event, which gathered more than 2,000 leaders from over 90 countries, provided an ideal platform for Wegagen Bank to showcase its ambitions and commitment to adopting global best practices.

The Memorandum of Understanding (MoU) with IFC is expected to significantly enhance Wegagen Bank’s operational capabilities. Under the agreement, IFC will support Wegagen Bank in implementing world-class treasury management, optimizing cash flow, and strengthening risk management systems. These improvements are crucial as the bank navigates Ethiopia’s rapidly evolving financial sector and positions itself as a modern, transparent, and accountable institution.

This partnership comes at a pivotal time for Wegagen Bank, which has been actively participating in Ethiopia’s growing capital market and investing in new technologies and services. The bank’s recent milestones include the launch of digital lending platforms, international card services, and advanced anti-money laundering and fraud management systems. By aligning with IFC, Wegagen Bank aims to further elevate its operational standards and offer more robust financial solutions to its customers and stakeholders.

Wegagen Bank’s collaboration with IFC demonstrates its commitment to accountability and transparency, not only for its shareholders but for the broader financial community. The bank has a history of pioneering initiatives in Ethiopia’s banking sector, from introducing wide area network connectivity and card banking to launching interest-free banking services and rebranding its corporate identity. With this new alliance, the bank is poised to integrate internationally accepted operating standards into its business model, reinforcing its reputation as a forward-thinking and reliable financial partner.

India has reaffirmed its strong commitment to supporting Ethiopia’s economic development by leveraging its influence within the New Development Bank (NDB), also known as the BRICS Bank, and the Asian Infrastructure Investment Bank (AIIB). This pledge was made by Anil Kumar, India’s Ambassador to Ethiopia, during the recent “3rd Invest Ethiopia 2025” Global Investment Forum Panel Dialogue, which highlighted Ethiopia’s rising global profile, especially following its recent inclusion in the BRICS economic group.

Ambassador Kumar emphasized India’s pivotal role in Ethiopia’s accession to BRICS, noting, “Ethiopia became a significant country as a member of BRICS last year, and it was India that proudly presented this proposal at the Johannesburg conference.” This milestone marks a new chapter in Ethiopia’s international economic engagement, opening avenues for enhanced cooperation between the two nations within the BRICS framework.

Highlighting key sectors for collaboration, Ambassador Kumar pointed to Ethiopia’s abundant natural resources and India’s industrial strengths. He identified mining, metals, and chemicals as particularly promising areas, noting India’s strong demand for rare earth elements and potash-resources in which Ethiopia is rich. He also underscored opportunities in the iron and steel sector, where Ethiopia’s supply of affordable electricity could be a crucial advantage for industrial growth.

In the healthcare sector, Ambassador Kumar proposed that Ethiopia’s adoption of India’s pharmacopoeia standards could reduce pharmaceutical costs by at least 50 percent. He cited successful examples where Indian state-owned institutions and industrial parks achieved similar price reductions in short timeframes, suggesting that such strategies could greatly enhance access to affordable medicines in Ethiopia.

India’s commitment to providing affordable financial assistance to Ethiopia is supported by its significant voting shares in key multilateral development banks. India holds the second-largest voting share in the AIIB at 7.6% after China and commands the highest 19% share in the New Development Bank among ownership members. Beyond these, India also wields considerable influence in other international financial institutions, including the International Monetary Fund and the African Development Bank, positioning it as a strong partner for Ethiopia’s development financing needs.

Ambassador Kumar also elaborated on India’s industrial policy, explaining that while much of Indian industry is privately run, the government plays a major facilitating role, especially in sectors like defense where government institutions hold key licenses for manufacturing and distribution. He stressed that inter-governmental cooperation could be vital in areas where strategic collaboration is needed.

Reflecting on India’s own development journey, Ambassador Kumar noted that India’s pharmaceutical industry did not achieve success by controlling the entire global supply chain from the outset. Instead, it started with the final dosage of drugs and gradually moved backward to formulations and active pharmaceutical ingredients (APIs). He suggested Ethiopia could adopt a similar strategic approach, leveraging contract manufacturing and specialization to build a competitive pharmaceutical sector.

India’s economic footprint in Ethiopia is already substantial, with over 650 Indian investments across various sectors. The two countries share a historical relationship spanning more than 2,000 years, with India currently serving as Ethiopia’s second-largest trading partner and a major source of foreign direct investment.

According to data from India’s Ministry of Commerce, the total trade turnover between India and Ethiopia in 2023-2024 reached approximately US$571.52 million. During this period, India exported goods worth US$489.59 million to Ethiopia, while imports from Ethiopia amounted to US$81.93 million. India’s exports to Ethiopia primarily include primary and semi-finished iron and steel products, medicines and pharmaceuticals, machinery and equipment, and metal products. Conversely, Ethiopia’s main exports to India consist of pulses, precious and semi-precious stones, vegetables and seeds, leather, and spices.

Ethiopia’s recent accession to BRICS and its anticipated membership in the New Development Bank are expected to further diversify its sources of development finance beyond traditional Western institutions. The NDB, established by BRICS countries to fund infrastructure and sustainable development projects, will provide Ethiopia with access to new funding sources and a platform to influence development priorities relevant to Africa.

The 12th edition of the Africa CEO Forum concluded in Abidjan, bringing together over 2,800 business leaders, investors, and policymakers from 90 countries for two days of high-level dialogue and dealmaking. Co-organized by Jeune Afrique Media Group and the International Finance Corporation (IFC), this year’s forum marked a pivotal shift toward forging an ambitious new pact between public governance and private investment across the continent.

Under the theme “Can a New Public-Private Deal Reshape the Continent’s Future?”, participants focused on strengthening economic governance, optimizing public policy, and accelerating the African Continental Free Trade Area (AfCFTA). The agenda reflected growing consensus that only structured, strategic collaboration between governments and the private sector can unlock Africa’s full economic potential in the face of global uncertainty and rising debt pressures.

A highlight of the forum was the presidential panel featuring leaders such as Côte d’Ivoire’s Alassane Ouattara, Senegal’s Bassirou Diomaye Faye, South Africa’s Cyril Ramaphosa, Mauritania’s Mohamed Ould Ghazouani, and Rwanda’s Paul Kagame. President Ramaphosa underscored the critical role of public-private partnerships in driving Africa’s development and economic integration.

Concrete commitments were a defining feature of the event, with more than $200 million in major deals signed across sectors including artificial intelligence, connectivity, energy, and real estate.

Forum President Amir Ben Yahmed emphasized the urgency of empowering Africa’s private sector: “In an era marked by economic and geopolitical uncertainty, Africa must unleash the power of its private sector to chart its own course. It is now up to public decision-makers to provide them with the means to succeed.”

IFC Managing Director Makhtar Diop added, “Africa’s potential is immense, but remains largely untapped. To realize this, we must mobilize private capital and urgently forge a new deal between companies and public decision-makers.”

The forum also featured debates on digital transformation, youth employment, and industrialization, with a strong focus on actionable solutions and investment opportunities. The event’s closing message was clear: Africa’s future prosperity depends on a bold, collaborative approach that leverages both public leadership and private sector innovation.