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African Governments Allocate Significant Budgets to Climate Action

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As African nations confront escalating climate risks, new analysis reveals that governments across the continent are deliberately dedicating portions of their national budgets to climate action, despite severe fiscal constraints and pressing development needs. A recent report by Development Transformations (DevTransform) highlights the scale and implications of these budgetary commitments across ten African countries, including Ethiopia.

The study shows that these countries allocate between 0.1% and 2.8% of their national budgets specifically to climate-focused programmes. Ethiopia stands out with climate allocations close to or above 2% of its budget, underscoring its political commitment to addressing climate challenges even amid limited fiscal space.

However, this dedication comes with significant trade-offs. The report illustrates that climate budget allocations in countries like Ethiopia are substantial enough to potentially cover large portions or even the entirety of critical public services such as health, education, social protection, and road infrastructure. For example, Ethiopia’s climate budget allocation could hypothetically finance over twice the Universal Health Coverage line and nearly 40% of national university education costs.

The report emphasizes the dual fiscal burden faced by these governments: not only must they fund critical services and climate action, but they also spend on external debt servicing at levels 10 to 30 times higher than their climate budgets. Ethiopia, for instance, spends about 12 times more on debt servicing than on dedicated climate programmes. This disproportionate fiscal pressure highlights a structural challenge, as debt repayments limit governments’ ability to expand climate investments or social spending.

Development Transformations calls for international climate finance to be provided predominantly as grants rather than loans, to avoid exacerbating debt burdens. The report stresses the need for justice in climate funding, recognizing that African nations are mobilizing scarce domestic resources to tackle a crisis they contributed least to historically.

Officials and policymakers are urged to protect existing climate budget lines as vital signals of commitment and to design climate investments that deliver co-benefits across human development sectors. The findings underscore that with adequate, additional international support, climate action can be scaled without undermining essential social services.

The report’s comprehensive fiscal analysis ultimately reveals the persistent dilemma faced by African countries: striving to build resilient, low-carbon economies while navigating debt pressures and competing development priorities. It serves as a crucial evidence base for policymakers, climate negotiators, and development partners seeking to enhance financing mechanisms that are equitable, sustainable, and conducive to Africa’s climate and development goals.

EIB Global Partners with Zemen Bank to Boost Climate Finance in Ethiopia

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The European Investment Bank’s development arm, EIB Global, has signed a technical assistance agreement with Zemen Bank to enhance the bank’s capacity in identifying, assessing, and managing climate-related risks. The partnership aims to integrate climate considerations into Zemen Bank’s business strategies and operations, helping the bank support Ethiopian enterprises facing environmental challenges like floods and droughts.

This collaboration will also enable Zemen Bank to develop sustainable financing and advisory strategies to expand green lending. The initiative supports Ethiopia’s goal of achieving a sustainable, net-zero economy by 2050, as outlined in the country’s Long-Term Low Emission Development Strategy.

The agreement was announced during the Africa Climate Summit held in Addis Ababa, marking the first operation of its kind in Ethiopia under the European Investment Bank’s Greening Financial Systems Programme. This programme, funded by the German government through the International Climate Initiative (IKI Fund), aims to strengthen financial institutions’ ability to boost climate resilience and green investments.

Leyla Traoré, EIB Head of Representation to Ethiopia & the African Union, emphasized the importance of financial institutions in directing funds toward zero-carbon, climate-resilient projects. Dereje Zebene, CEO of Zemen Bank, noted that the technical assistance agreement will help the bank align its financing with climate resilience goals and comply with national sustainability regulations, including new Corporate Governance directives.

Zemen Bank, a private commercial bank operating since 2008, has more than 130 branches and over 1,900 employees throughout Ethiopia. The partnership with EIB Global represents a critical step for the bank to diversify its portfolio to include green finance products and contribute to Ethiopia’s sustainable development objectives.

African Economies Urged to Boost Research Investment to Drive Industrial Transformation

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Algiers, Algeria African economies have been challenged to increase their investment in research to accelerate the continent’s industrial transformation through the development of homegrown innovations that promote autonomy, sustainability, and technological sovereignty.Yemi Kale, (PhD) Group Chief Economist and Managing Director for Research at the African Export-Import Bank (Afreximbank), made the call during the official launch of the African Research and Innovation Hub (ARIH) at the ongoing Intra-African Trade Fair 2025 (IATF2025) in Algiers.

He highlighted that Africa currently accounts for less than 3% of global research output yet faces a disproportionate share of global challenges.“Even more concerning, our research and development spending averages under 0.5% of GDP, far below the global average of 2.2% and much less than the over 4% invested by countries such as South Korea and Israel,” Kale said. “History shows that deliberate investment in research ecosystems has been the foundation of industrial transformation.

Sustained competitiveness requires research, innovation, and the industrial capacity to transform ideas into products and services that can compete in global markets.”The newly launched ARIH, a joint initiative by Afreximbank, the African Union, and the African Continental Free Trade Area (AfCFTA) Secretariat, aims to promote and commercialize African research and innovation.

The hub provides a platform for academics, researchers, and students to contribute knowledge and expertise toward advancing intra-African trade and industrialisation.Kale emphasized the economic potential: “If Africa doubles its R&D spending to just 1% of GDP by 2030, it could unlock an estimated $60–70 billion annually in additional value across key sectors such as agriculture, digital technology, and manufacturing. T

his would boost productivity, reduce import dependence, and expand Africa’s share of global trade.”Throughout the IATF2025, ARIH is hosting sessions that bring together academia, enterprises, policymakers, and investors. Algeria’s Ministry of Higher Education provides technical coordination for sessions including roundtables and pitch events for innovative projects and startups.

Participants include university lecturers, students, scientists, and researchers from African national institutions and the diaspora, including the Caribbean, who have the opportunity to showcase their research and prototypes.Hosted by Algeria, IATF2025 is co-convened by Afreximbank, the African Union Commission, and the AfCFTA Secretariat.

The trade fair is projected to facilitate deals worth over US$44 billion and serves as a major platform for businesses to showcase their goods and services, explore opportunities, and exchange information. IATF aims to capitalize on the AfCFTA’s single market of over 1.4 billion people and a GDP exceeding US$3.5 trillion. Now in its fourth edition, previous IATF events have cumulatively generated over $118 billion in trade and investment deals, attracting more than 70,000 visitors and 4,500 exhibitors.

Tender Notice

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The Office of the United Nations High Commissioner for Refugees (UNHCR), Representation Office in Ethiopia, Addis Ababa, invites qualified and registered Contractors / Suppliers to participate in the following tender: SN TENDER SUBJECT CLOSING DATE 1 TENDER REFERENCE NO: REQUEST FOR PROPOSAL (RFP)ETH-UNHCR – RFP – 001For establishment of construction service agreement for UNHCR Bokh office, in Bokh town, Doolo Zone, Somali Region 30 Sep 2025 11:59 PM2TENDER REFERENCE NO: REQUEST FOR PROPOSAL (RFP)ETH-UNHCR-RFP-002 For Provision of Security Services for the UNHCR Field Office in Jigjiga, Somali Regional State, and the UNHCR Field Office in Bokh, Dollo Zone, Somali Regional State.1 October 2025 11:59 PM Interested suppliers can Visit the following portal:How to become a supplier | UNHCR