ADDIS ABABA – World Bank has decided to provide 250 million U.S. dollars in supplemental financing to help Ethiopia withstand the economic impact of COVID-19.
The funding – comprised of $125 million grant and $125 million credit – is also geared towards helping Ethiopia to revitalize the economy by broadening the role of the private sector and attaining a more sustainable development path, according to the bank.
Carolyn Turk, World Bank Country Director for Ethiopia, said the COVID 19 pandemic is expected to severely impact Ethiopia’s economy.
“The austerity of the required containment measures, along with disruptions to air travel and the collapse in international demand for goods exported by Ethiopia are already taking a toll on the economy,” said Turk said.
“Additionally, an estimated 1.8 million jobs are at risk, and the incomes and livelihoods of several million informal workers, self-employed individuals and farmers are expected to be affected,” she said.
The supplemental financing will help to mitigate the impact of the ongoing COVID-19 crisis on the Government’s reform agenda, her office said.
Specifically, the program is intended to help address some of the unanticipated financing needs the Government of Ethiopia is facing due to the COVID-19 crisis.
Additional financing needs are estimated to be approximately $1.5 billion, as revenue collection is expected to weaken, and additional expenditure is needed to mitigate the public health and economic impacts of the crisis.
“This additional financing to the Second Growth and Competitiveness Programmatic Development Policy Financing, approved in March 2020, will support the continued implementation of the structural reforms towards private-sector-led development under the Homegrown Reform Agenda,” said Miguel Eduardo Sanchez Martin, World Bank Task Team Leader for the Operation.
The financing will complement the government of Ethiopia’s ongoing efforts to mobilize financial assistance for crisis response.
The operation is one of the pillars of the World Bank’s immediate response to mitigate the impact of the global crisis on Ethiopia.
In April, the World Bank had already provided $82.6 million for Ethiopia COVID-19 Emergency Response Investment Policy Financing under the Fast-Track COVID-19 Facility to prevent, detect, and respond to the threat posed by COVID-19 and to strengthen national systems for public health preparedness.