WB Approves Loan to Restructure Ethiopian Financial Sector

The World Bank has approved a loan of $700 million to restructure the Ethiopian financial sector.

The loan is aimed at modernizing the National Bank of Ethiopia, recapitalizing the Ethiopian Commercial Bank and strengthening the Development Bank of Ethiopia.

Ethiopian Prime Minister recently, defending financing agreements with World Bank and International Monetary Fund, said that had the agreements not been signed, the Commercial Bank of Ethiopia would have collapsed. Ethiopian State Enterprises owe billions of birrs to the Commercial Bank of Ethiopia and recovery has been extremely slow.

Ethiopian government, in July this year, introduced macro economic reforms. It liberalized foreign exchange market, retail, real estate, banking and other sectors. The World Bank project plans to support governance reforms and restructure balance sheet.

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