Ethiopia’s decision to join the New Development Bank: unlocking new avenues for development financing  

By Amanuel Tadesse

The global development finance architecture is undergoing a profound transformation. As developing countries seek greater access to affordable, sustainable, and diversified sources of financing, new multilateral institutions are emerging to complement traditional international financial mechanisms. Among the most prominent of these institutions is the New Development Bank (NDB), established by the BRICS countries in 2015 to mobilize resources for infrastructure and sustainable development projects and to strengthen economic, financial, and development cooperation among emerging markets and developing economies. 

For Ethiopia, which is implementing far-reaching macroeconomic reforms while pursuing an ambitious development agenda, access to reliable and sustainable development financing has become both a strategic necessity and an economic imperative. Ethiopia’s aspiration to accelerate infrastructure development, industrialization, energy expansion, climate resilience, agricultural transformation, and digital transformation under the Digital Ethiopia 2030 Strategy and its broader national development agenda requires substantial long-term capital that cannot be generated through domestic resources alone. 

Recognizing the growing need for affordable and sustainable development financing, the Council of Ministers’ decision on 26 June 2026 to refer the Agreement Establishing the New Development to the House of Peoples’ Representatives (HoPR) for ratification marks an important legal step toward Ethiopia’s full membership in the Bank. It also represents a significant milestone in the Country’s economic diplomacy and development financing strategy following its admission to BRICS on 1 January 2024. Ethiopia submitted its application for membership to the NDB management in October 2023, prior to the country’s formal accession to BRICS in January 2024.

Given these developments, this article probes Ethiopia’s ratification process of the Agreement Establishing the NDB, and explores how membership in the Bank could unlock opportunities for development financing to support the country’s macroeconomic reform program, infrastructure investments, industrialization ambitions, and long-term development aspirations.

The New Development Bank: The Financial Institution of BRICS

BRICS has developed a comprehensive framework for strategic cooperation built upon three principal pillars: political and security cooperation, economic and financial cooperation, and cultural and people-to-people exchanges. These pillars are guided by the principles of mutual respect, sovereign equality, solidarity, openness, inclusiveness, and consensus.  

To advance the economic and financial pillar of BRICS cooperation and address the infrastructure financing gap facing developing countries, the founding BRICS members established the New Development Bank (NDB). The NDB was established under the Agreement on the New Development Bank, signed on 15 July 2014 during the 6^th BRICS Summit in Fortaleza, Brazil. The Agreement entered into force in July 2015, enabling the commencement of the Bank’s operations.

Since its establishment, the NDB has expanded beyond its founding members. The NDB admitted Bangladesh on 16 September 2021, the United Arab Emirates on 4 October 2021, Egypt on 20 February 2023, Algeria on 19 May 2025, and Uzbekistan on 5 June 2026 as a new member country. The Bank’s Board of Governors has also approved the accession of Ethiopia, Uruguay, and Colombia in 2025 and Angola in 2026 as prospective members. Admitted countries become full members upon completion of their respective accession requirements and payment of the first installment of the subscribed capital.

 The headquarters of the Bank is located in Shanghai, the Peoples Republic of China, pursuant to a Headquarters Agreement concluded with the Government of the Peoples Republic of China. Article 4(b) of Articles of Agreement of the NDB authorize the establishment of additional regional and country offices as necessary. So that to enhance its regional presence, the Bank established the Africa Regional Centre in Johannesburg, South Africa. The Bank is currently led by former Brazilian President Mrs. Dilma Rousseff.

Under Article 1 of the Agreement on the NDB,  the principal purpose of the NDB is to mobilize resources for infrastructure and sustainable development projects in BRICS countries, emerging economies, and developing countries. The Bank contributes to economic growth and sustainable development by providing financing through loans, guarantees, equity participation, and technical assistance to both public and private sector entities.

Importantly, as provided in Article 2 of the Articles of Agreement, the NDB was designed to complement rather than replace existing multilateral and regional development finance institutions. Through this cooperative approach, it seeks to strengthen the global development finance architecture and address persistent financing gaps faced by developing economies.

Membership in the NDB as per Article 5(b) of the Articles of Agreement is open to all Member States of the United Nations. Consequently, membership is not restricted to BRICS countries, reflecting the Bank’s commitment to broader international participation in development financing and economic cooperation.

The Bank recognizes two categories of members under Article 5(c) of the Articles of Agreement: borrowing members and non-borrowing members. Borrowing members are eligible to access financing facilities, while non-borrowing members contribute capital and participate in governance without seeking a loan. At present, the UAE is the only non-borrowing member.

The NDBs under Article 7 of the Articles of the Agreement authorized capital of US$100,000, divided into one million shares with a par value of US$ 100,000 each. Its initial subscribed capital is US$50 billion, comprising US$10 billion in paid-in capital and US$40 billion in callable capital. This structure provides the Bank with substantial financial resources while enhancing its creditworthiness and capacity to mobilize additional financing.

Since its establishment, the NDB has emerged as one of the most significant multilateral development institutions providing over 40 billion in total project financing for more than 120 strategic initiatives on infrastructure development, sustainable growth, and international economic cooperation.

Ethiopia’s Membership in The New Development Bank

Ethiopia has embarked upon comprehensive macroeconomic reforms aimed at promoting resilient growth, sustainable development, and shared prosperity. A central pillar of these reforms is the mobilization of adequate, sustainable, and diversified sources of financing to support the country’s ambitious development agenda. In this vein, membership in the NDB presents a significant opportunity for Ethiopia to expand access to development financing while strengthening its engagement with emerging multilateral financial institutions.

As clearly articulated by Prime Minister Abiy Ahmed, Ethiopia’s development strategy requires strong institutional partnerships and innovative financing mechanisms to support infrastructure development, industrial transformation, climate resilience, food security, and sustainable economic growth. Ethiopia’s long-term prosperity thus depends on mobilizing development finance that advances national priorities while preserving national ownership of its development pathways.

To advance these objectives, Ethiopia formally submitted its application for NDB membership to the Bank’s President in October 2023, prior to its formal accession to BRICS. It subsequently submitted its formal application to the NDB Board of Governors on 6 January 2024, receiving received broad political support from BRICS member states. In 2025, the NDB Board of Governors approved Ethiopia’s admission as a member. Following this decision, on 26 June 2026, the Council of Ministers approved the Draft Proclamation on the Ratification of Ethiopia Accession to the Agreement Establishing the New Development Bank and transmitted it to the HoPR for consideration and approval.

In this context, Ethiopia’s accession is closely aligned with the country’s Ten-Year Development Plan (2021-2030), which prioritizes infrastructure development, industrialization, energy expansion, climate-resilient growth, agricultural transformation, digitalization, and private-sector-led development. Access to NDB financing can therefore provide an important supplementary source of capital to support these strategic national priorities and accelerate the implementation of key development projects.

Upon ratification and the deposit of its Instrument of Accession with the Government of Brazil, the designated depository of the Agreement Establishing the New Development Bank, Ethiopia will formally become a member of the NDB, in accordance with Article 9(b) and (d) of the Terms, Conditions and Procedures for the Admission of New Members to the New Development Bank.   

Unlocking New Avenues for Development Financing

Membership in the NDB is expected to yield several strategic benefits for Ethiopia, as outlined below.

First, it will provide access to additional financing for infrastructure and sustainable development projects. Ethiopia’s ambitious development priorities, including investments in agriculture, energy, transport, manufacturing, and industrialization, require substantial long-term financing. The NDB offers an important alternative source of development finance, capable of complementing existing support from traditional multilateral institutions and bilateral partners.

Second, membership can strengthen macroeconomic resilience and financial stability by broadening financing options and reducing excessive reliance on traditional lending sources. Diversified financing enhances fiscal flexibility and contributes to sustainable economic growth.

Third, accession to the NDB will deepen Ethiopia’s engagement in South-South cooperation and emerging development finance frameworks. This will facilitate greater economic collaboration, investment opportunities, technology transfer, and policy dialogue among developing countries.

Fourth, membership can support Ethiopia’s ambition to become a leading industrial and manufacturing hub in Africa. By facilitating access to financing for industrial parks, energy infrastructure, logistical networks, and productive sectors, the NDB can contribute significantly to the country’s industrial transformation agenda.

Fifth, membership offers valuable opportunities for capacity building, technical cooperation, institutional strengthening, and knowledge exchange. Such cooperation can enhance the effectiveness of national institutions and support the implementation of Ethiopia’s development priorities.

Ethiopia’s accession to the NDB reflects a strategic commitment to diversifying development financing, strengthening international economic cooperation, and mobilizing additional resources for sustainable development. As the country continues to implement its macroeconomic reform agenda, NDB membership could provide an important source of financing for infrastructure development, industrialization, and economic transformation.

Beyond its financial benefits, membership in the NDB will enhance Ethiopia’s participation in the evolving architecture of global economic governance. As a member, Ethiopia will be able to engage directly in the Bank’s decision-making processes, contribute to discussions on development priorities, and strengthen its cooperation with emerging economies across the Global South. If effectively utilized, accession to the NDB can contribute significantly to Ethiopia’s pursuit of inclusive growth, economic resilience, and sustainable prosperity.