World Bank has approved $700 million loan to strengthen Ethiopia’s financial sector.
“We are proud to support Ethiopia in its journey to transform and strengthen its financial sector. This project reflects our commitment to promoting economic stability and inclusive growth in the country. By boosting the capacity of key financial institutions, Our goal is to create a stronger and more accessible financial system that better serves the needs of all Ethiopians,” said World Bank in an official statement.
In July this year, the Ethiopian government introduced macro economic reforms. It liberalized foreign exchange market. Retail, real estate, import, export, banking and other sectors were opened to foreign investors. The $700 million project is aimed at modernizing the National Bank of Ethiopia and recapitalizing the Commercial Bank and Development Bank of Ethiopia.
Recently, Abiy Ahmed, the Ethiopian Prime Minister, said that had Ethiopia not secured financing agreements with IMF & World Bank, the Commercial Bank of Ethiopia (CBE) wouldhave collapsed. The new World Bank loan is expected to strengthen CBE. Ethiopian State Entities owes a huge amount of money to the Commercial Bank of Ethiopia.
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