Ethiopia has secured a significant financial boost, receiving more than $850 million in grant from the World Bank.
The Ministry of Finance recently announced the signing of a monumental agreement between Ethiopia and the World Bank, totaling $1.72 billion, equivalent to 97 billion birr.
The agreement, a testament to the collaborative efforts between Ethiopia and the World Bank, was formalized through the signatures of Finance Minister Ahmed Shide and Ousmane Dione, the World Bank’s representative for Sudan and South Sudan.
Of the total financial assistance received, $850 million is earmarked for various developmental projects across Ethiopia.
Specifically, $500 million of the grant will be channeled towards supporting food security and climate change initiatives in rural areas. Additionally, $82 million is allocated to ensure food security in urban regions.
Recognizing the diverse needs across Ethiopia, $340 million has been allocated to enhance food security in lowland areas and support climate change adaptation efforts.
Furthermore, $275 million is designated to address challenges related to clean drinking water supply and sanitation in urban centers.
This financing pact underscores Ethiopia’s commitment to addressing critical developmental challenges and fostering inclusive growth across the nation.
In related developments, a team of International Monetary Fund (IMF) experts recently concluded a two-week consultation with Ethiopian authorities in Addis Ababa.
While the Ethiopian government declared the visit a success, indicating fruitful discussions, some unresolved issues will be further deliberated upon during future meetings in Washington.
Ethiopia finds itself in a challenging financial situation, becoming the third country, after Ghana and Zambia, to default on the one-billion-euro Eurobond issued 11 years ago.
In response, the Ethiopian government emphasized its commitment to treating all creditors equally, citing this as the reason for delaying Eurobond repayments, rather than a lack of funds.
With $29 billion in foreign loans, half of which are owed to China, Ethiopia is seeking an extension of the loan repayment period.
However, countries and lending institutions outside of China have shown reluctance to grant such extensions, despite Ethiopia’s credit pressure.
Prime Minister Abiy Ahmed disclosed in a recent discussion with honest taxpayers that Ethiopia had repaid $10 billion in loans over the past five years.
The country faces multiple economic challenges, including the impact of war, the COVID-19 pandemic, climate change, rising living costs, and global economic conditions.
