The 1995 constitution created the Federal Democratic Republic of Ethiopia, organised into ethnically based regional states. Eritrea became independent in 1993, and the two countries fought a border war from 1998 to 2000.

In 2018 Abiy Ahmed became prime minister and made peace with Eritrea, for which he received the Nobel Peace Prize in 2019. A devastating war in Tigray (2020–2022) ended with the Pretoria agreement, though conflict in other regions has continued.

Ethiopia joined BRICS in 2024. The Grand Ethiopian Renaissance Dam was formally inaugurated in 2025, and Addis Ababa remains the diplomatic capital of Africa as seat of the African Union.