Under the influence of the external policy pressure of donors such as the World Bank, higher education in Ethiopia has witnessed a series of institutional and system-wide reforms. This article reviews selected policy documents to show key neo-liberal policy agendas endorsed in the reforms and explicate how they have affected social equity in the subsystem. The analysis shows that higher education reforms in Ethiopia, primarily framed by concerns of economic efficiency, have constrained social equity in two important ways. First, at a discursive level, the problem of inequality is represented as a lack of access and a disadvantage in the human capital formation of the nation. Second, the drive for greater efficiency and reduced costs in the educational provision embedded in the reforms is inconsistent with the need for the financial and political commitments required to benefit marginalised members of the society through relevant equity instruments. If the equity policy provisions should be instrumental in ensuring participation, retention and successful completion, and thereby supporting the social mobility of disadvantaged groups, they need to draw on a broad social justice perspective.