Economy
Ethiopia to get $10.5 billion if IMF, World Bank talks succeed, PM says
Prime Minister Abiy Ahmed seeks substantial support from international lenders to stabilize Ethiopia’s economy
Ethiopian Prime Minister Abiy Ahmed announced on Thursday that Ethiopia is expecting approximately $10.5 billion in financial aid over the coming years, pending the conclusion of negotiations with international lending institutions.
Ethiopia, Africa’s second most populous nation, has been severely impacted in recent years by armed conflicts, the COVID-19 pandemic, and various climate shocks. The country is engaged in prolonged discussions to secure a support program from the International Monetary Fund (IMF).
There has been speculation that as a condition of IMF aid, Ethiopia may need to devalue its currency, the birr. Addressing parliament, Abiy acknowledged the tough negotiations with the IMF and the World Bank, describing both sides as “stubborn.”
“We have been negotiating with the IMF and World Bank on a wide range of issues,” Abiy said. “Several of our proposals were finally accepted. When this process comes to a successful conclusion, and the reform is approved, we will receive $10.5 billion in the coming years.”
The IMF did not immediately respond to AFP’s request for comment on Abiy’s statements. According to a source familiar with the negotiations, the current program under discussion with the IMF involves around $3.5 billion in financial assistance. Any agreement with the IMF could potentially unlock an equivalent amount from the World Bank.
Ethiopia is contending with approximately $28 billion in external debt, sky-high inflation, and a severe shortage of foreign currency reserves. The country’s credit rating was downgraded to partial default in December by Fitch after it missed a $33 million coupon payment on a Eurobond.
The two-year conflict in Ethiopia’s northern Tigray region, which concluded in November 2022, led to the suspension of numerous development aid programs and budget assistance. When Abiy took office in 2018, he pledged to reform Ethiopia’s closed and state-dominated economy, but progress has been limited since then.
Veteran Development Expert Qimiao Fan to Oversee $17.2 Billion Portfolio in Kenya, Uganda, Somalia and Rwanda
The World Bank has announced the appointment of Qimiao Fan as its new Country Director for Kenya, Uganda, Somalia, and Rwanda. Effective September 1, 2024, Fan steps into the role at a critical juncture, bringing with him a wealth of experience that spans over three decades.
Fan’s career is distinguished by a rich blend of public and private sector expertise. Since joining the World Bank in 1991, he has held pivotal roles including Country Manager for Cambodia, and Country Director for Belarus, Moldova, and Ukraine, as well as Bangladesh, Bhutan, and Nepal. His strategic acumen was further honed in his role as Director of Strategy and Operations for the Equitable Growth, Finance, and Institutions Vice Presidency.
In addition to his extensive World Bank experience, Fan has also made significant contributions in the private sector. During a sabbatical in the late 1990s, he held senior executive positions in China, including CEO of HC International and Vice Chairman of the Board and CEO of Tintic Trust and Investment Company. This diverse background positions him uniquely to navigate the complex development challenges in East Africa.
Fan takes over from Keith E. Hansen, who has served as the Country Director for the region since September 2020. Hansen’s tenure was marked by intense scrutiny of the World Bank’s policies, particularly regarding structural adjustment programs and their impacts on local economies. As Fan assumes this role, he will be responsible for managing an impressive portfolio of 102 active projects valued at $17.2 billion—a testament to the World Bank’s commitment to the region.
Fan’s appointment comes at a pivotal time for East Africa, where development needs are increasingly urgent amidst ongoing socio-economic challenges. His role will be instrumental in shaping the future direction of World Bank support and ensuring that projects align with the evolving needs of the region.
Holding a PhD in Economics from the University of Birmingham, England, Fan’s academic credentials complement his vast practical experience. His leadership is anticipated to be a crucial factor in advancing development goals and fostering economic growth across Kenya, Uganda, Somalia, and Rwanda.
As Fan embarks on this new chapter, the East African region—and indeed the broader international development community—will be watching closely. His tenure promises to be a defining period for the World Bank’s engagement in East Africa, with high expectations for effective management and impactful outcomes.
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