One Year After the Funding Crisis, Ethiopia’s Youth Programs Are Still Standing
One year after sweeping cuts in international development funding, the dust has begun to settle. Our sector has been permanently changed. Across Africa, critical programs were paused, priorities reshuffled, and long-held assumptions about aid financing fundamentally challenged.
Programs focused on youth were hit especially hard. Health services, leadership training, entrepreneurship, and skills building for young people are often the first to be cut, despite compelling evidence of their long-term returns.
Amref Ethiopia takes a different view. In a country where more than 70 percent of the population is under 30 and youth unemployment stands at 27 percent (35 percent for women), shuttering youth programs would mean abandoning an entire generation.
Amid the disruption, one lesson stood out: community-centered, locally led programs can endure even under unprecedented pressure.
What We Built
In 2021, Amref Ethiopia launched Kefeta, a $60 million USAID-funded program designed to strengthen youth mental and physical health, education, career services, financial inclusion, and entrepreneurship. It was the first initiative of its kind for Ethiopian youth.
The early years were deliberate and demanding. We focused on building trust, establishing systems, and forging partnerships— the painstaking groundwork essential to something entirely new. By the time funding was cut, we were halfway to reaching two million young people ages 17–29.
The impact was immediate. Governance programs for 74,000 youth stopped. Skills development for 25,000 youth ended. Access to finance for 21,000 young entrepreneurs was sharply reduced.
And yet, we endured; not because of luck, but by design.
Community Ownership as Foundation
Amref’s commitment to co-creating programs with communities proved to be our most resilient strategy. While we provided technical guidance and secured funding, Kefeta was designed alongside young Ethiopians, ensuring their voices shaped every decision.
The clearest example is the Savings and Credit Cooperative Organization (SAACO), Kefeta’s financial arm. Fully owned and governed by its young members, SACCO offers financial literacy, structured savings, and most critically, access to capital. In Ethiopia, only 10 percent of youth successfully navigate bank loans, and just 2.8 percent ever receive one. Traditional financial institutions have long viewed young people as high risk and unbankable. SACCO created a viable alternative.
Because it was rooted in the community, SACCO was not uprooted. Today, 14,000 members have saved 200 million Birr, and 222 million Birr has been disbursed in loans to young entrepreneurs. Even during the funding shortfall, SACCO’s integrity held. Between March and December 2025, membership grew 58 percent, loans increased 88 percent, and the number of youth receiving start-up capital rose 54 percent.
Localization: More than a Buzzword
For Amref, localization isn’t about handing over projects. It’s about building local institutions capable of adapting, managing complexity, and leading independently.
Through Kefeta, we partnered with seven Ethiopian civil society organizations across 18 cities, strengthening their governance, financial systems and leadership capacity. Each organization underwent rigorous assessments followed by tailored support.
The results speak for themselves. One partner, the Youth Network for Sustainable Development, is now leading a five-year, $48 million initiative with the Mastercard Foundation and Johns Hopkins University, supporting 500,000 young Ethiopians. All our partner organizations have secured their own funding.
Localization allowed resilience to triumph over withdrawal.
Shifting the Narrative
A central feature of Kefeta was changing how young people, especially women and girls, are perceived. Too often, they were treated as passive recipients of aid, their promise to drive prosperity overlooked.
Through projects such as Kefeta Youth Media network, young storytellers produced content that challenged harmful norms and highlighted possibilities. As perceptions changed, institutions followed: Awash Bank, Ethiopia’s leading private bank, partnered with Kefeta to provide over USD 450,000 in youth-specific loans.
The shift culminated in a milestone: SACCO became the first nationally licensed, youth-led, youth-owned, and youth-managed financial institution of its kind in Ethiopia. Fifty percent of board members are women, six percent are people with disabilities, and the CEO is a woman.
By reshaping how society sees young people, Kefeta strengthened confidence in youth-led institutions without which even the best-designed programs can unravel.
What’s Next?
As we mark this difficult anniversary, Amref enters the new year with clarity and resolve. We have weathered the worst. The systems, partnerships, and infrastructure we built are now stress-tested and ready to scale.
We are deepening relationships with donors committed to African-led, sustainable systems while engaging new partners drawn to innovative, ready-to-deploy models. Our credibility enabled rapid pivots: when the crisis hit, the Vodafone Foundation accepted a redesigned proposal prioritizing social enterprises in 10 youth centers.
We are also prepared to help other development organizations build truly locally led systems grounded in operational excellence. At the same time, we are cultivating new partnerships with Ethiopia’s growing private sector and engaging the diaspora.
Despite the challenges, this moment is full of promise. Crises break systems open, creating space for better models to emerge. As African-led institutions, we have a responsibility and opportunity to make room for the next generation to shape the Africa we have long imagined.
Misrak Makonnen, Country Director, Amref -Ethiopia