Ethiopia’s cities are facing the challenges of rapid urban growth, with projections indicating that the urban population will nearly triple from 15 million in 2012 to over 42 million by 2034. This surge has put pressure on infrastructure and services but has also created opportunities for job creation as more young people migrate to urban areas.
The Ethiopia Urban Institutional and Infrastructure Development Program (UIIDP) was launched to address these challenges. Supported by more than $850 million from the World Bank’s International Development Association (IDA), the Government of Ethiopia, and the French Development Agency (AFD), UIIDP partnered with 117 local governments across Ethiopia. The program aimed to strengthen institutions and create jobs through targeted infrastructure projects.
A key focus of UIIDP was building institutional capacity at the local government level. The program provided training that enabled local authorities to better plan, manage, and finance sustainable urban development. As a result, all 117 participating local governments improved their financial management systems, governance procedures, and audit processes. These changes increased financial independence and gave cities greater control over their own development.
The program also emphasized inclusive governance by promoting public consultations and increasing women’s participation in decision-making roles within city administrations. This led to higher representation of women in expert and managerial positions.
From 2018 to 2024, UIIDP funded the construction and rehabilitation of over 2,700 kilometers of roads as well as the development of an equal number of hectares of serviced land. These initiatives improved mobility, expanded access to services, and supported a better business environment. In total, they contributed to the creation of approximately 1.15 million jobs—915,000 temporary positions and 237,000 permanent ones—with women filling about 49% of these roles.
These developments have made Ethiopian cities more attractive for investment and have supported the growth of small and medium enterprises by improving accessibility and providing serviced land for new businesses.
Despite disruptions caused by the COVID-19 pandemic and regional conflicts in Tigray, Amhara, Afar, and Oromia regions, UIIDP maintained its progress through flexible funding mechanisms and remote monitoring tools. This adaptability helped protect both infrastructure gains and related livelihoods during challenging times.
According to program leaders: “The approach may not solve every problem, but it represents a significant step toward more resilient, economically active cities—where growth is not just faster, but also shared more broadly among their citizens.”
The experience with UIIDP offers lessons on how linking urban investment closely with employment outcomes can help address multiple challenges at once while supporting inclusive economic growth.