The World Bank has approved $200 million in financing for a new phase of social protection support in Ethiopia under the Productive Safety Net Program Phase 6 (PSNP 6). The initiative aims to strengthen food security, create employment opportunities, and enhance resilience among vulnerable households across the country.
Announced on March 3, the funding will help Ethiopia expand its flagship social protection system, which assists millions of people facing economic hardship, climate shocks, and limited employment opportunities. The program is financed through a credit from the World Bank’s International Development Association (IDA).
According to the World Bank, the project will support around 700,000 people to create or expand small businesses through training, mentoring, and access to basic financial support. The initiative also focuses on building community assets and improving livelihoods, helping households transition toward more stable and sustainable income sources.
Maryam Salim, the World Bank’s director for Ethiopia, Eritrea, South Sudan, and Sudan, said the program will help families meet immediate needs while building long-term resilience. She noted that the initiative will connect beneficiaries to better employment opportunities, encourage investment in human capital, and address challenges such as child malnutrition and stunting.
The new funding comes at a time when many Ethiopian families face mounting pressure from repeated droughts, rising food prices, and limited job opportunities. These challenges often force households to make difficult decisions, including reducing meals, selling essential assets, or withdrawing children from school.
Although Ethiopia recorded 8.1% economic growth in the 2023/24 fiscal year, the country remains among the world’s poorest, with gross national income per capita estimated at about $1,020. Poverty, humanitarian pressures, and economic inequality continue to pose significant challenges to development and social stability.
The Productive Safety Net Program, launched in 2005, is one of Africa’s largest social protection initiatives. It provides cash or food support to food-insecure households while engaging beneficiaries in public works projects that build infrastructure, restore degraded land, and strengthen local economies.
With the launch of PSNP 6, the Ethiopian government and the World Bank aim to expand these efforts, helping vulnerable communities better withstand economic shocks and climate-related risks while promoting sustainable livelihoods.
