Development Finance Effectiveness—The Case of Ethiopia

This study focused on exploring the utilization of development finance effectiveness in Ethiopia as a strategic enabler to sustainable development and economic growth of the country. The research specially doweled on the background trend of development finance in Ethiopia, assessing on the effectiveness of development finance utilization and comparing development finance to foreign direct investment. In order to generate a realistic data, secondary data such as document investigation methods in soft and hard copy and personal observation has been employed. Eventually, the research findings revealed that in the past two decades, Ethiopia received development finance in billion dollars from multilaterals and bilateral donors although the effective utilization is needed to be improved immensely. The Ethiopian Home-Grown Economic Reforms which have been introduced in part I and II were instrumental to ensure sustainable development and economic growth of the country including the utilization of effective development finance. Moreover, the research revealed that in comparing development finance to foreign direct investment, Ethiopia equally received the same 3.4 billion dollars USD in the year 2023 showed that the government should pay due attention to development finance as one of the enablers for economic advancement. Finally, the study recommended establishing especial monitoring end evaluation body, encouraging and incentivizing the staffs working on development finance implementation, ensuring strong law enforcement, and depending on indigenous home-grown development programs are the recommendations so as to Ethiopia emancipate itself from foreign dependency including development finance.