The east African country, which is one of the poorest nations in the world, aims to put a state-of-the-art satellite into orbit within five years as part of its plans to improve communications.
Ethiopia, which is receiving £300 million in British aid this year, will now become the fourth country to have developed a space programme while receiving support from UK taxpayers.
It follows on from India, Nigeria and Pakistan who have all been granted millions of pounds in aid from the Department for International Development (DfID).
The programme in Ethiopia has already kick-started with a £1.9million observatory being built in the hills above the capital of Addis Ababa.
The first step was building two metal domes, which will be used to house two computer-controlled telescopes, on the top of Mount Entoto.
The observatory was paid for by Mohammed Alamoudi, an Ethiopian-Saudi businessman and the country’s richest man, who used funds from the Ethiopian Space Science Society (ESSS) which he set up in 2004.
Solomon Belay, the director of the observatory, insisted the space programme was not a luxury, despite a quarter of the 96 million population of Ethiopia living in extreme poverty.
He said: “Being poor is not a boundary to start this programme. Engineering and sciences are important to transform our [traditional] agriculture into industry.
“People said we were crazy. The attention of the government was to secure food security, not to start a space and technology programme. Our idea was contrary to that.”
After completing the first stage of the project, Ethiopia then plans to build another observatory in the northern mountains around Lalibela.
The country’s government will then hope to launch a national space agency, with its main aim of sending a satellite into orbit within five years.
Abinet Ezra, communications director for the ESSS, said the ultimate goal of the project is to inspire young children to be involved in science and technology.
He added: “Science is part of any development cycle – without science and technology nothing can be achieved.”
In the last Parliament, Prime Minister David Cameron made it a legal requirment for Britain to spend 0.7 per cent of gross national income on foreign aid each year.
DfID, which has an £11.1bn budget, last night defended its funding to Ethiopia and said “not a penny” of British cash is going towards the space programme.
A spokesman went on to claim that DfID funding had helped to reduce child mortality by a quarter in Ethiopia and saved almost eight million people from needing humanitarian food aid.
The spokesman said: “Not a penny of British aid goes to Ethiopia’s space programme.
“The aid we do give is saving lives and addressing the root causes of poverty, migration and extremism, which directly benefits Britain.”
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