The federal government is staking a growing share of its expanding budget on climate resilience, an act seen as a political will that may double as economic self-harm, a new cross-country analysis by Development Transformation (DevTransform) revealed. The federal government would earmark nearly 54 billion Br, 2.8pc of its 2025/26 budget, for climate action, a higher percentage than any other major social service aside from debt servicing.

The report shows that the government earmarked the equivalent of 182pc of its federal maternal and child health budget and more than twice the urban food security and safety net envelope for climate-related programs over the past three fiscal years. The analysis uncovered that the federal government's climate budget could have built half of the country's major roads or funded nearly 40pc of the university system. Experts warn that vital sectors, such as health and education, are already seeing their funding displaced. They fear that climate funds meant to prevent systemic collapse are accelerating underdevelopment in their own right.

In the Borena Zone of the Oromia regional State, a drought in 2021/22 killed 3.3 million livestock, displacing 65,000 families, causing a recovery cost of 33 billion Br.

“The land became empty,” Guyo Kenchora, an official from the local agriculture bureau, told Fortune.

The Southern and Somali regional states were hit as well. The federal government has since started to invest in mitigation. Billions of Birr have been spent on dam projects to secure water in the region. Guyo expect another major drought within the next five years, and preparations are already underway. Pastoralists are stockpiling feed for their animals and buying livestock insurance. The average premium for insuring three animals is 2,600 Br.

“Nobody had gotten anything in the past,” Guyo said.

Other countries in the study, including Cameroon, Eswatini, Ghana, Kenya, Malawi, Mali, Mauritania, Namibia, and Zambia, showed consistent climate spending ranging from 0.1pc to 2.8pc of national budgets. Mauritania matched Ethiopia’s top commitment, while Kenya and Ghana also made notable allocations, despite spending 21 to 29 times more on debt service than on climate. In Mali, the difference is even more pronounced, with debt service outpacing climate spending by a factor of 75.

What makes Ethiopia’s case striking is the stability of its climate allocation between one and two percent of total public spending annually since 2022, despite a punishing macroeconomic environment marked by high inflation, currency depreciation, and rising debt service. For every dollar spent on climate adaptation, 10 dollars are swallowed by debt payments, according to the study by DevTransform, a Nairobi-based not-for-profit organisation.

“This is a zero-sum game,” said Martha Getachew, a co-founder and director of the research group behind the study.

She likened the situation to “paying a loan with interest to a person who burnt your house for renovation.”

DevTransform stated that the consistency demonstrates a political commitment to climate adaptation that contradicts the notion that African states are waiting passively for external donors to lead the charge. The researchers say Ethiopian leaders' policy commitment is a part of a broader pattern across Africa, where poor countries pay in hard currency to address a crisis they did not cause.

At a recent Africa Climate Summit held in Addis Abeba, the continent’s leaders reframed Africa not as a victim but as a solution-bearer. They have launched the Africa Climate Innovation Compact, designed to mobilise 50 billion dollars annually by 2030. But much of this funding remains contingent on scarce grants and concessional finance, often tangled in the same debt webs that climate spending seeks to loosen.

African heads of state, including William Ruto (PhD) of Kenya, called for reforms to global development banks, lower borrowing costs, and a greater African voice in global finance. Denmark pledged 79 million dollars for agricultural transformation, and Italy reaffirmed its 4.2 billion dollars, with 70pc going to Africa.

The Summit also featured technical agreements between the European Investment Bank and domestic banks such as Global and Zemen, Dashen, and Hibret to support 100 million dollars in green investments by 2027. This effort, part of the Mission 300 Agenda and Clean Cooking Initiative, plans to deliver clean energy to 300 million people and clean cooking solutions to 900 million Africans in the coming years.

New strategies were also announced for using Africa’s vast mineral resources, such as cobalt, lithium, copper, and rare earths, for local processing and job creation, moving the continent beyond its traditional role as a supplier to global value chains. Financial tools are being developed to mitigate climate-fueled health risks, ranging from heatwaves to infectious disease outbreaks. The Addis Abeba summit launched the Africa Just Resilience Framework and the Climate Justice Impact Fund, which has already supported 64 projects across 17 countries.

With the African Union (AU) and Ethiopian leaders pledging to lead the implementation of these commitments, the Summit called for a unified effort for stronger multilateralism and fairer financial arrangements at COP30, to be held in Brazil.