EU Throws Weight Behind Africa Trade, Ethiopia Wins Back Budget Support

The European Union (EU) and the Secretariat of the African Continental Free Trade Area Secretariat (AfCFTA) signed an accord today at the Hilton Hotel, reinforcing what both sides hailed as a strategic partnership to deepen continental integration and accelerate implementation of the continental free trade deal.

Signed by Wamkele Mene, secretary general of the Accra-based AfCFTA, and Jozef Síkela, EU's Commissioner for International Partnerships. They agreed to align their priorities with the African Union’s Agenda 2063 and the EU’s Global Gateway Strategy, with a focus on trade facilitation, standards harmonisation and support for private-sector participation in continental trade.

EU officials described the agreement as a “historic milestone” in Europe’s institutional engagement with Africa’s flagship integration project. The accord sits within the broader Europe's 1.2 billion euro package funded by the EU and eight of its member states. The initiative finances more than 80 cooperation projects, hoping to reduce non-tariff barriers across AU member states and regional economic communities, such as COMESA and ECOWAS.

A European technical assistance, budgted at 55.2 million euro, is embedded in the AfCFTA Secretariat.

Alongside the forum opened today for two days, Ethiopian authorities and their European counterparts unveiled the EU-Ethiopia Digital Economy Package, signed by State Minister for Finance Semereta Sewasew. The package is intended to fast-track Ethiopia’s digital transformation. The event marked the resumption of direct EU budget support to Ethiopia, the first in several years after it was paused during the war in the north.

"Although the support had been stopped because of the conflict, its resumption is 'political'," Commissioner Síkela told Fortune.

The renewed support amounts to 140 million euros and is expected to be disbursed in a first round after the election, with a second disbursement six months later.

“The schedule is proposed by us and there will be a discussion,” said Síkela.

Adding to the day’s financing commitments, Ethiopian and European officials signed a separate agreement for a programme on rural financing intermediation. The State Minister signed the agreement with a representativeof the European Investment Bank, Leila Traore, alonside Isayass Kassa (PhD), president of the Development Bank of Ethiopia (DBE).

Expected to mobilise 110 million euros, the programme is designed to expand access to credit, insurance and savings instruments for smallholder farmers and rural micro, small and medium-scale enterprises, with an emphasis on climate-resilient agriculture and post-harvest value-chain development. A similar deal, worth 20 million euros, has also been signed with Zemen Bank.

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