World Bank Approves $1.5 Billion in Budget Support for Ethiopia

#Finance
World Bank Approves $1.5 Billion in Budget Support for Ethiopia

Loveworld / 5 hours

August 5, 2024

2 min read

The World Bank’s board has approved $1.5 billion in budget support for Ethiopia, marking the first time the institution has provided such direct lending to the country. This significant financial boost comes as Ethiopia advances its long-standing debt restructuring efforts.
The approval follows Ethiopia’s recent achievement of securing a $3.4 billion program from the International Monetary Fund (IMF) earlier this week. This program was made possible by the Ethiopian central bank’s decision to float its currency, the birr, a key step in facilitating the country’s debt restructuring process.
The World Bank’s support consists of a $1 billion grant and a $500 million low-interest credit line. This funding represents the first direct budgetary support facility extended to Ethiopia by the global lender. The financial assistance is contingent upon the Ethiopian government’s commitment to implementing crucial economic reforms, including the liberalization of the foreign currency market.
According to Ethiopian officials, this new funding is part of a broader $10.7 billion financial package involving contributions from the IMF, World Bank, and other international lenders. This comprehensive support package is designed to bolster Ethiopia’s economic stability and advance its restructuring efforts.
The World Bank’s approval and the recent IMF program collectively underscore the international community’s support for Ethiopia as it navigates its economic reforms and works toward sustainable fiscal health.