Ethiopia to receives $400 million for development projects from the World Bank amid Russia-Africa summit
As African states, including Ethiopia, participate in the Russia-Africa leaders summit in St. Petersburg, the World Bank and Ethiopia’s Ministry of Finance finalized a crucial agreement.
$350 million will be provided as grant, while the remaining $50 million will be extended as a loan, requiring repayment in due course. Ethiopia’s Finance Ministry, however, did not provide specific details about any political, economic, or cultural conditions attached to the financial arrangement.
The signing ceremony took place virtually, with Finance Minister Ahmed Shide, and Mr. Ousmane Dione, World Bank Country Director for Ethiopia, Eritrea, Sudan, and South Sudan, representing their respective entities. According to an update published on the Ministry’s website on Thursday, Ethiopia stands to receive $400 million from the World Bank through this agreement.
The package incorporates elements of “Program for Results (PforR)” and “Investment Project Financing (IPF).” The “PforR” component aims to reinforce basic service delivery systems, mitigate crises’ impact, enhance learning outcomes, and address stunting in selected Woredas (administrative divisions).
Accordingly, funding will go to towards youth education and nutrition services for young adults, while strengthening service delivery and accountability in regions affected by conflicts, droughts, and high levels of refugees.
On the other hand, the “IPF” portion of the funds is allocated for providing technical assistance and capacity building support, which will strengthen systems and enhance the delivery of quality services.
This is a boost to Ethiopia’s economy aiming to recover from post war conflict, where education, nutrition and health have been negatively impacted. The country is currently in the middle of ongoing negotiations to security a much bigger funding program from the IMF.
The timing of this funding has spawned speculators, who assume the decision to finance Ethiopia amid the Russia-Africa Summit is meant to pull the country away from Russian influence.
In addition, Ethiopia anticipates a two-day working visit from World Bank President Ajay Banga starting on July 31. His visit will primarily focus on identifying opportunities for job creation among the country’s young population and women.