World Bank approves $1.5b for Ethiopia

The World Bank (WB) has approved a $1.5 billion policy operation to support Ethiopia‘s sustainable and inclusive growth through significant economic reforms.

The package, consisting of a $1 billion grant and $500 million concessional credit from the International Development Association (IDA), aims to strengthen Ethiopia’s financial sector, expand trade options, and improve fiscal transparency while safeguarding vulnerable households during economic transitions.

Key reforms focus on addressing macroeconomic imbalances, increasing financial stability and competition, enhancing public spending efficiency, and improving state-owned enterprises’ performance.

The initiative also emphasises sustainable land and forest management and expanding access to renewable energy, aiding Ethiopia’s climate change goals and resilience.

The WB comprehensive support for Ethiopia includes investments in various sectors such as health, education, and agriculture. Ethiopia receives over $2 billion annually in concessional financing from IDA, with commitments standing at $15.5 billion. Moreover, over the next three years, the WB plans to provide around $6 billion in new commitments, IFC expects $2.1 billion in investments, and MIGA aims to expand its engagement, totalling over $16.6 billion in financial support.

Attribution: WB