World Bank approves $1.2 bln in grants, loans to support Ethiopia’s financial sector

world-bank-750x430The World Bank’s Board of Executive Directors approved yesterday a $1.2 billion ($600 million grant and $600 million credit) from IDA in support of the Government of Ethiopia’s policies designed to accelerate economic growth and achieve its vision of becoming a lower-middle-income country.

The funds will go towards supporting reforms in the financial sector, including improving the investment climate.

In response to the reform pledges made by the government since Prime Minister Abiy Ahmed took office in April, the bank is providing new financial and technical support.

The support will promote public-private partnerships “to improve efficiency in key sectors” including telecom, power, and trade logistics.

Promoting public-private partnerships (PPPs) will not only improve efficiency in key sectors such as telecom, power and trade logistics but also mobilize private financing which will enable Ethiopia to maximize the resources available for development financing.

In these sectors, the bank said its support would also help the government “reduce inefficiencies and operating costs and improve financial performance” to help Ethiopia attract more foreign direct investment and raise export revenues.

Until Abiy took office and began announcing sweeping political and economic reforms, the country of 105 million had an economy tightly controlled by the state.