Ethiopia signed a $1 billion deal with the World Bank and received $262.3 million from the IMF to support economic reforms, stabilize its financial sector, and boost trade and revenue.

Ethiopia announced on Friday that it has entered into a $1 billion financing agreement with the World Bank. According to a statement posted by the country’s Ministry of Finance on Facebook, the funding package will be structured as both a concessional loan and a grant. The ministry emphasized that the funds are aimed at supporting the government's initiatives to maintain the stability of the financial sector, improve the country’s competitiveness in international trade, and strengthen efforts to mobilize domestic resources.

In a related development earlier this week, the International Monetary Fund (IMF) completed its latest review of Ethiopia’s ongoing $3.4 billion loan programme. The successful review has unlocked access to a new disbursement of $262.3 million, which will be made available to the East African nation as part of the overall financial support arrangement.

These financial developments are taking place as Ethiopia continues to implement a series of economic reforms, some of which have drawn criticism from economists and analysts. There are increasing concerns about the adverse effects of policies promoted by international financial institutions on African countries. Critics argue that the structure of the global financial system remains skewed against the interests of African economies.

Among the key reforms Ethiopia has undertaken is the decision to float its national currency, the birr, in 2023. In addition, the government has been taking steps to liberalize the economy by encouraging more private sector participation in areas that were previously under strict state control. According to reporting by Reuters, these moves are part of a broader strategy to modernize the economy and attract investment.

The IMF, in its recent assessment, highlighted several areas where Ethiopia needs to focus its reform efforts. These include enhancing the operation of the foreign exchange market, increasing domestic revenue generation, restoring the sustainability of the country’s external debt, and improving transparency in fiscal management.