Ethiopian irrigation projects face delays due to security, compensation, and design flaws
via The Reporter Ethiopia11 min read
Ethiopia's irrigation projects are significantly hampered by security issues, right-of-way compensation disputes, and design flaws, despite the country's vast water potential. A 2025 study by Tadesse Kuma, senior researcher at the Policy Studies Institute, indicated that the failure to transition from rain-based to irrigated agriculture costs Ethiopia over a third of its growth potential. The study found that 13 large-scale irrigation schemes, intended to service over 550,000 hectares, have only managed to irrigate less than 44,000 hectares, despite nearly 61 billion Birr in investment before 2021. Minister of Irrigation and Lowlands, Abraham Belay, reported to Parliament that the Ministry is working with a budget of 17 billion Birr, which is insufficient for its responsibilities. He cited security problems, particularly in the Amhara and Oromia Regional States, as a major obstacle, preventing contractors from accessing project sites. Compensation claims for right-of-way are also causing delays and financial strain, with regional administrations reportedly seizing funds intended for federal projects. Additionally, many projects, some initiated under the EPRDF regime, suffer from poor design and a lack of feasibility studies, requiring costly reworks. Lawmakers expressed dissatisfaction with the slow progress, noting that even projects in peaceful areas face delays and inefficiency.
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This summary was AI-generated from a story originally published by The Reporter Ethiopia.
The National Bank of Ethiopia NBE has postponed its latest foreign-exchange auction, citing unforeseen technical issues. The NBE had previously announced on May 27 that it would conduct two foreign-exchange auctions of USD 100 million each during the fourth quarter of the fiscal year. This amount represents a significant reduction from the previous auction, which offered USD 500 million. The next auction, valued at USD 100 million, was scheduled for June 24, 2026. Demand for foreign currency remains high, with commercial banks submitting bids totaling approximately USD 1 billion in the previous auction, double the amount offered by the central bank, as the Birr continues to weaken against the US Dollar. In that auction, the weighted average exchange rate for successful bids was 159.98 Birr per dollar, with the highest successful bid at 160.90 Birr per dollar and the lowest at 157.30 Birr. Fourteen of the 30 participating commercial banks secured foreign-currency allocations.
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