Ethiopian Officials in Talks to Replace Broad Subsidies with Targeted Support

Federal officials in Ethiopia are actively engaged in discussions with the International Monetary Fund (IMF) and the World Bank to reform the country's subsidy system. The primary goal of these talks is to transition away from broad-based subsidies that cover the entire population and instead implement targeted financial support that reaches fewer, but more eligible, individuals. Under the proposed strategy, fuel will be sold at full market prices across the country. To shield vulnerable groups from the economic impact, specific subsidies will be directed toward eligible consumers, such as users and operators of public transportation. This structural shift has long been advocated by the IMF as a necessary measure for fiscal sustainability and economic stability in Ethiopia. However, implementation of the plan had previously stalled after the internal conflict pushed global and domestic prices upward, making subsidy removal politically and economically sensitive at the time.