Ethiopian authorities have signed a memorandum of understanding (MoU) for a USD 1.5 billion public health cooperation program with the US government, allaying deep concerns that have weighed on the health sector since Washington’s earlier decision to fold the US Agency for International Development (USAID).

The “co-investment plan” will see the US provide up to USD 1.01 billion to priority health programs over the next five years, while Mekdes Daba (MD) and Ahmed Shide, ministers of Health and Finance, respectively, have committed to a USD 450 million (approximately 70 billion Birr) increase in Ethiopia’s own health spending, according to a statement issued by the US embassy in Addis Ababa earlier today.

“This is a new dawn for Ethiopia’s leadership in shaping Ethiopia’s own health system to become more resilient, more responsive, and sustainable for today and for tomorrow,” it quotes US Ambassador Ervin Massinga as saying. “Today’s MOU opens a new five-year chapter, one defined by shared responsibility, transparency, and a clear expectation that Ethiopia will drive its own future by mobilizing resources and sustaining health gains for generations to come.”

The Health Minister has indicated the funding will be directed toward combating HIV/AIDS, tuberculosis, and malaria, and improving medicine supply, maternal and child health, and epidemic preparedness.

Although not legally binding, the MoU offers a sense of relief to health professionals and aid workers in Ethiopia who find themselves in a state of uncertainty and unease following the Trump administration’s decision to shut down USAID earlier this year.

The embassy’s statement cites the US has provided Ethiopia with more than USD five billion in aid over the past two decades, much of which came through USAID. The decision to fold the agency hit the health sector especially hard.

In February, the Health Ministry ordered regional and city administrations to suspend all operations and payments funded through financial support from the US Centers for Disease Control and Prevention (CDC) and USAID.

More than 5,000 people lost their jobs as a result, many of whom were involved in various HIV-response programs, according to a United Nations Programme on HIV/AIDS (UNAIDS) report which also cautioned that the funding cuts had the potential to undo years of progress in fighting diseases like HIV, malaria, and tuberculosis, as well as in improving maternal and child health.

In today’s statement, the Finance Minister highlighted Ethiopia’s commitment to raising its health spending by USD 450 million as an indicator of “intent to increase domestic financing and ensure the long-term sustainability of the health sector beyond external support.”

Ethiopia’s health spending has been on a decline over the past few years. In 2020/21, at the height of the COVID-19 pandemic, health and nutrition accounted for a little over 10 percent of the total federal spending budget. This year, the figure sits at 7.3 percent.

While the MoU signals an intent to reverse health spending cuts, US officials caution the volume of funding under the partnership will depend on performance.

“Performance incentives embedded in the agreement will drive results and accountability. If key health outcomes are not achieved, funding will decrease accordingly. This approach aligns resources with impact, ensuring that every dollar spent delivers measurable benefits for both countries,” reads the embassy’s statement.

Data and record-keeping are also an integral part of the agreement, which itself is part of the Trump administration’s ‘America First Global Health Strategy,’ according to the statement.

“The MOU’s focus on scaling up electronic health records and data systems will empower Ethiopia to track and respond to health threats with greater speed and precision,” it reads.

 This week saw Benjamin Bol Mel, one of South Sudan’s five vice presidents, taken into military custody under direct orders from the office of President Salva Kiir, heightening fears that the country is slipping back into a state of civil war.

Bol Mel is the second VP to be placed under house arrest in recent months. A government decree read on state television this week confirmed that Bol Mel had been dismissed from his post alongside several other prominent figures, including the governor of the South Sudanese central bank and the head of the country’s revenue authority.

Bol Mel, who has been under sanctions from Washington for almost a decade for alleged corruption, was also stripped of the rank of general he had held since September this year.

The arrest has taken many by surprise as Bol Mel is a member of the Sudan People’s Liberation Movement (SPLM) party chaired by Kiir and was tipped as the favorite to succeed him as president.

The South Sudanese government has yet to provide an explanation for its actions and international watchdogs and rights groups warn the latest high-profile arrest in Juba is likely to exacerbate the violent clashes that have gripped the country for the past several months.

Tensions in South Sudan have been on the rise since March, when Kiir’s government

arrested Vice President Riek Machar.

Machar and several other individuals have since been accused of treason, crimes against humanity, terrorism, mass murder, and destruction of property. A criminal trial is ongoing, with the next session scheduled for Friday, November 21.

Machar was taken into custody on suspicion of working with the White Army, a militant organization tied to the Nuer ethnic group. At the time, Machar’s Sudan People’s Liberation Movement-in-Opposition (SPLM-IO) party denied ongoing links with the militia, which it fought alongside during the civil war that had engulfed South Sudan for years following its independence in 2011.

The brutal civil war—fought between forces loyal to Machar and his rival, President Salva Kiir, often along ethnic lines—left hundreds of thousands of people dead before it ended with the formation of a united government in 2018.

Machar’s arrest stoked violence once again and magnified fears that another round of civil war could break out in the world’s youngest country.

Last month, the UN Commission on Human Rights in South Sudan highlighted escalating armed clashes, political detentions, and widespread human rights violations over the past seven months.

“South Sudan’s political transition is falling apart,” Commissioner Barney Afako told the UN General Assembly. “The ceasefire is not holding, political detentions have become a tool of repression, the peace agreement’s key provisions are being systematically violated, and government forces are using aerial bombardments in civilian areas. All indicators point to a slide back toward another deadly war.”

The UN estimates at least 370,000 South Sudanese civilians have been displaced by violence since March, with many more fleeing to neighboring countries including Ethiopia.

In April, local officials in the Gambella Regional State, which shares a long border with South Sudan, told The Reporter they were struggling to cope with the influx of refugees fleeing violence and air strikes.

Reports indicate that at least 50,000 South Sudanese refugees have crossed into Gambella in the months following Machar’s arrest. They add to the estimated 430,000 South Sudanese refugees already sheltered in the region at a time when funding constraints are forcing humanitarian organizations like the UN High Commissioner for Refugees (UNHCR) to scale back aid programs.

Presenting a half-year performance report in Nairobi earlier this week, Safaricom CEO Peter Ndegwa revealed the group’s Ethiopia unit registered close to 16 billion Birr in losses between March and September.

The figure is 53 percent lower than the losses Safaricom Ethiopia suffered during the same period last year. The firm has yet to turn a profit since it acquired Ethiopia’s first-ever private telecom operator’s license in May 2021 for an USD 850 million fee.

However, Ndegwa says its parent company in Nairobi is optimistic about future prospects.

“Ethiopia is full of promise,” said the CEO. “We are engaging the government and key stakeholders to navigate market repair caused by the impact of currency reforms.”

Ndegwa says there is a need to review connection prices, particularly for mobile data, in light of the currency devaluation.

The federal government’s decision to float the currency in July 2024 only further complicated Safaricom Ethiopia’s operations, which were already under pressure from conflict-related restrictions, security issues, and stiff competition.

An October 2025 report from the World Bank and Digital Development Partnership (DDP) criticized what it described as an uneven playing field between Safaricom Ethiopia and state-owned giant Ethio telecom.

The report raised concern about “possible preferential arrangements for state-owned enterprises in handling government mobile money transactions” and alleges that Ethio telecom has blocked access to Safaricom apps like its flagship mobile money platform mPesa.

Safaricom Ethiopia lost USD 325 million in 2024, according to the report.

“Safaricom’s FY24 revenue (USD53.6 million) does not even cover the annual costs of its licenses (USD 1 billion over 15 years, including mobile money, or USD 66.7 million per year). Thus, this raises concerns about long-term investment sustainability and return on capital,” it reads.

The World Bank, which extended a USD 150 million loan to the consortium behind Safaricom Ethiopia through the International Finance Corporation (IFC), wants to see the Ethiopian Communications Authority take measures to correct what it sees as unfair competition.

“These concerns warrant further investigation by national authorities,” reads its October report.

The report also highlights challenges facing Safaricom in terms of infrastructure, which it relies on Ethio telecom and state-owned Ethiopian Electric Power (EEP) to provide. It reveals Safaricom pays out USD three million to Ethio telecom each year for infrastructure rental.

Still, the presentation this week indicates that Safaricom is making steady progress in Ethiopia.

The operator has managed to register 11.1 million subscribers since it rolled out its network in late 2022.

The company reports processing more than 128 million interoperable P2P transactions, which include account-to-account and wallet-to-account transfers, valued at nearly 578 billion Birr over the year. EthSwitch registered less than 120 million interoperable ATM cash withdrawals valued at 156 billion Birr over the same period.

“The landmark moment reflects not only EthSwitch’s success in driving digital payment adoption but also signifies a broader national shift toward a more cash-lite, digitally empowered economy,” wrote CEO Yilebes Addis in the company’s annual report.

When EthSwitch was established in 2011 as a share company owned jointly by commercial banks, microfinance institutions, and the National Bank of Ethiopia (NBE), digital transactions in Ethiopia were virtually nonexistent.

The firm introduced ATM interoperability five years later and followed that up with point of sale (PoS) interoperability in September 2020, allowing anyone with a payment card to use PoS machines issued by any commercial bank to conduct a digital transaction.

It was not until late 2021 that EthSwitch officially availed a national integrated payment system that allowed for the instant transfer of funds from one financial institution to another.

EthSwitch has enjoyed a consistent growth in P2P transactions in the years since. In 2021/22, the operator recorded under 2.1 million P2P transactions valued at nearly 20 billion Birr. Two years later, EthSwitch processed 49.7 million transactions valued at 271 billion Birr.

The past year was a busy one for EthSwitch. The company acquired a new 12-storey headquarters in Kazanchis and finalized the construction of a “tier-3 equivalent” data center at the headquarters of Zemen Bank, also located in the same Addis Ababa neighborhood.

The switch operator’s data was previously handled in a data center on the premises of the NBE’s headquarters.

“EthSwitch also advanced national initiatives by serving as the central integration point for the Fayda Digital ID, enabling secure, centralized authentication for the financial sector,” reads the CEO’s message.

An Egyptian military delegation visited Mogadishu earlier this week as part of Cairo’s plans to take part in the mission as a troop-contributing country. A UN Security Council report from April 2025 indicates that close to 1,100 Egyptian military personnel will take part in AUSSOM.

The delegation’s visit comes amid growing friction with Ethiopia following last month’s inauguration of the Grand Ethiopian Renaissance Dam (GERD), which Cairo says is a threat to Egypt’s water supply.

Ethiopia itself is contributing 2,500 troops to AUSSOM, which replaced the African Transition Mission in Somalia (ATMIS) at the beginning of this year and is scheduled to last through 2028.

The latest peacekeeping mission in Somalia will be the first to feature Egyptian military personnel, as ATMIS drew troops from Ethiopia, Kenya, Burundi, Djibouti, and Uganda. Cairo’s participation indicates deepening ties with Mogadishu, prompted by a year-long standoff with Ethiopia over a controversial maritime access deal with breakaway Somaliland that has since fizzled.

In August 2024, Cairo delivered military equipment to Somalia, pushing analysts to express concern over the potential for a proxy conflict between Ethiopia and Egypt. The concerns have been revived by Cairo’s intentions for AUSSOM, but Ethiopian officials maintain they do not see the deployment of Egyptian troops as a direct threat.

Suleiman Dedefo, ambassador to Somalia, told Somali media outlets this week that Ethiopia is “neither threatened nor comfortable” with the presence of Egyptian troops in Somalia.

Meanwhile, AUSSOM continues to face serious financial challenges that threaten to undermine peacekeeping efforts.

During the 80th UN General Assembly last month, AUC Chairperson Mahamoud Ali Youssouf stated the AU would be doubling its financial contribution to the peacekeeping mission to USD 20 million in 2025. However, the figure represents only a tenth of the funding needed to sustain AUSSOM until 2026.

The AUC chair urged partners to bridge the financing gap.

“Together, let us ensure that Somalia’s future is defined by hope, not relapse,” said Youssouf.

During his address at the assembly, President Taye Astkeselassie also urged the UN and partners to extend their support to AUSSOM in a bid to fight terrorism in the region.

The agency warns that without USD 230 million in immediate funding, it could be forced to completely suspend all food assistance to refugees in Ethiopia within the coming months.

WFP is the largest humanitarian agency globally and is the sole humanitarian assistance provider for over 1.1 million refugees and millions of IDPs in Ethiopia.

“We are making impossible choices,” a statement released this week quotes Zlatan Milisic, WFP Ethiopia country director, as saying. “We are trying to reach as many refugees as possible with meaningful amounts of food assistance. But without more funds, these reductions are just another step towards stopping food distributions completely, putting the lives of those we currently assist at risk.”

The statement indicates that only 70,000 newly arrived refugees from South Sudan and Sudan, many of whom are severely malnourished, will continue to receive full rations for the coming six months.

Close to 800,000 more refugees will be forced to survive on 40 percent rations, down from the 60 percent they had been receiving since the last downsizing in May 2023.

“WFP’s supplies of specialized nutritious foods provided to malnourished children and mothers are also running dangerously low. They are expected to run out completely by December, meaning that WFP’s support for one million malnourished children and pregnant and breastfeeding women would also end unless additional funds are received,” reads the statement.

WFP’s operations in Ethiopia have been curtailed by funding constraints and security issues for the past several years, but the problems have become more pronounced with time.

A year ago, Milisic told The Reporter that seeing through humanitarian assistance programs and deliveries had grown increasingly challenging for the UN agency.

“Security challenges are often linked to banditry or robbery on the road by unidentified armed groups. They pose risks, threats, and challenges for us,” he said.

The movements of the world’s largest humanitarian organization were and continue to be deeply affected by protracted conflicts and security threats in Oromia, Gambella, Somali, parts of Tigray, and Afar, as well as by the silent battles going on between armed groups and government forces in the Amhara region, according to the Director.

“It’s difficult logistically and it’s difficult security-wise,” he said. “There are issues, particularly in the Amhara Regional State.”

In January 2025, sources told The Reporter that the WFP Ethiopia office was preparing to lay off more than a third of its 1,500 staff in a bid to cut expenses.

Barely four months later, WFP announced it was suspending life-saving nutrition treatment programs for 650,000 malnourished women and children in Ethiopia. A quick response from donors allowed the programs to continue, but this week’s statement warns that may not be the case for long.

“Our operations have been hanging by a thread for months now,” said Milisic. “This is not only undermining our ongoing support to food insecure Ethiopians and refugees, but also our preparedness to respond to new crises, which could span new refugee influxes, drought conditions or other climate shocks.”

WFP supported 4.7 million vulnerable people in Ethiopia between January and October this year with food assistance, nutrition support, school meals and resilience activities, according to the statement.

The emergency, originally declared by the Biden administration in 2021 and renewed yearly, will be in effect until September 2026, according to a notice from the US presidency issued this week.

“The situation in and in relation to northern Ethiopia, which has been marked by activities that threaten the peace, security, and stability of Ethiopia and the greater Horn of Africa region, continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States,” it reads.

The Biden administration declared the emergency a few months before moving to delist Ethiopia from the African Growth and Opportunity Act (AGOA) for human rights violations committed during the northern war.

“We have not entered into a war of words with Eritrea despite provocation from the other side,” Gedion said in a parliamentary appearance on Thursday.

He was responding to questions from lawmakers while presenting a Ministry performance report.

“There are countries that have become ill at ease at seeing Ethiopia creating and maintaining amicable relations with its neighbors,” Gedion told MPs.

Relations between Ethiopia and Eritrea have soured over the past couple of years, growing especially tense in recent months in light of the federal government’s desire to secure maritime access. The administration of Prime Minister Abiy Ahmed (PhD) has stated that “all options” are being considered, prompting concerns about potential conflict with neighboring countries, including Eritrea.

In recent months, Eritrea has initiated military mobilization efforts, calling upon citizens under 60 to enlist. The move has been interpreted by observers as a response to Ethiopia’s actions and statements regarding sea access.

Eritrean officials have described Ethiopia’s maritime ambitions as “misguided”, reflecting the deep-seated mistrust between the two nations.

Gedion’s comments come following controversial remarks from Eritrean President Isaias Afwerki last week, accusing Ethiopia of working to destabilize the region.

The Foreign Minister’s stance contrasts sharply with an opinion piece authored this week by MP and former Foreign Affairs official Dina Mufti, in which he accused Eritrea of supporting armed groups opposed to the federal government, alleging a coordinated effort to destabilize Ethiopia by uniting ethnic militias from the Tigray and Amhara regions.

Fourteen banks bid against one another for the USD 50 million on offer during what was the sixth foreign currency auction organized by the National Bank of Ethiopia (NBE) since the market was liberalized in mid 2024.

The first auction, in August, saw 27 banks bid an average of 107.9 Birr for a US Dollar. When the second took place almost eight months later, the Birr had weakened 26 percent against the greenback. 

At the end of March, central bank regulators announced that auctions would take place every two weeks for “several months” in a bid to provide the private sector with “some portion of the foreign exchange accumulation that has been taking place.”

A March 31 statement from the NBE claimed its forex reserves had reached record levels owing to rising exports, increased remittances, and higher capital inflow. 

The Birr gained slightly during an auction held the next day, with the weighted average bid registering at 131.71 per US Dollar. The central bank offered USD 130 million in two more auctions over the following month, which both saw the Birr lose ground. Today’s bidding continued the trend. 

This week also saw the central bank introduce another round of changes to its forex policies. 

Importers are now able to take up to USD 50,000 from banks for upfront payments to suppliers, 10 times more than the previous limit. Regulators have also scaled up the amount of forex that travelers can purchase from banks to USD 10,000 (USD 15,000 for business travelers) and limited the amount that banks can charge for forex service to no more than four percent per transaction. 

The decision, announced in a statement from the Board today, follows the end of a three-month suspension levied on TPLF for failing to hold a federally recognized general assembly and elect its leaders within the six-month window granted to it when it was officially reinstated under “special circumstances” in August 2024.

The statement issued today accuses the party of failing to “take corrective measures” during the suspension, and says the TPLF’s status as a political party has been revoked as of May 13, 2025.

How the decision will impact the Pretoria Agreement and the Tigray Interim Administration (TIA) remains to be seen.