The World Bank has just approved an additional $250 million in financing for Ethiopia to strengthen the Urban Productive Safety Net and Jobs Project. This funding aims to support poor urban households, create jobs for young people and women, and strengthen social welfare systems in a country facing high population growth and structural economic challenges.

Support for Urban Social Safety Nets

The $250 million in financing is additional support for an existing project focused on vulnerable populations in Ethiopian cities. It will expand the coverage of urban safety nets by combining cash transfers, public works activities, and job placement support.

• The Ethiopian Ministry of Finance and the World Bank signed the agreement on January 14, 2026, during a virtual ceremony.
• The goal is to alleviate urban poverty while strengthening household resilience to economic shocks and price increases.

Job creation for youth and women

One of the central focuses of this financing is youth employment and the economic inclusion of women, two groups particularly vulnerable to unemployment and underemployment. Ethiopia needs to create approximately 1.8 million jobs annually to absorb new entrants to the labor market, making these programs crucial.

• The project finances labor-intensive public works (HIMO) in cities, providing temporary income while improving local infrastructure.
• It also includes subsistence grants and support programs to help beneficiaries launch or strengthen small income-generating activities.

Targeting vulnerable households and refugees

Beyond the urban poor, the project incorporates a humanitarian and inclusive dimension by also targeting refugees and host communities in certain localities. This approach aims to reduce social tensions and improve cohesion in areas where there is significant pressure on services and employment.

• The program combines cash transfers, social support services, and support for the socio-economic reintegration of beneficiaries.
• Strengthening social protection systems should allow for better identification of vulnerable households and a faster response in the event of a shock.

A signal of confidence in Ethiopian reforms

This new financing is part of the ongoing close partnership between the World Bank and Ethiopia, which covers areas such as social safety nets, infrastructure, health, education, and economic reforms. It complements other support, including development policy financing aimed at supporting the reform agenda and the country’s economic transformation.

• For the World Bank, this project must contribute to “inclusive growth” by linking social protection, employment, and controlled urbanization.
• For Addis Ababa, the challenge is to transform these resources into sustainable opportunities: poverty reduction, skills development, and the gradual formalization of some informal urban work.

What are the challenges for Ethiopian cities?

With rapid urbanization, Ethiopian cities concentrate both economic dynamism and social vulnerabilities. Strengthening urban safety nets and public employment programs can make the difference between uncontrolled urbanization and better-managed urbanization.

This type of project can serve as a laboratory for public policies that combine social protection, local development, and the professional integration of young people. In the medium term, the real impact will be measured on the ground: improved incomes, access to services, reduced inequalities and the ability of cities to offer opportunities to new generations.