21 July 2014

Ethiopia's Loan Reimbursement Capacity Is Growing

The World Bank Country Director for Ethiopia, Mr. Guang Z. Chen says the reimbursement capacity of Ethiopia is continuing to improve. The Debt Sustainability Analysis of the World Bank has indicated that the country finds it relatively easy to secure loans as its debt burden is low. Equally, the growing capacity to pay back loans helps it secure further loans.

Other factors are the growth of Foreign Direct Investment and the relative increase of export trade. The Country Director said it would be possible to increase foreign trade by adding additional export items and diversifying products; he also added that it was essential to encourage the manufacturing sector for this.

Mr. Chen noted that the success attained in utilizing loans for targeted objects ensured the continuity of the supply of credit. He said Bank loans extended for agriculture, roads, safe water supply and similar programs were now being finalized according to schedule. Some eight projects were launched in Ethiopia last year, utilizing the US$6 billion Bank loan given to Ethiopia. These raise the total number of projects supported by the Bank to over 35. Data from the Bank notes that 20,000 hectares of land has been readied for irrigation development and World Bank has provided US$2 billion in loans and grants for expansion of roads since 1991.

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