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Washington, July 30, 2024 — The World Bank’s Board of Executive Directors has approved the Ethiopia First Sustainable and Inclusive Growth Development Policy Operation, a substantial financial initiative aimed at bolstering Ethiopia’s economic reform agenda. This operation, consisting of $1 billion in grants and $500 million in concessional credit from the International Development Association (IDA), is poised to support home-grown reforms that encourage a more inclusive and resilient economy.
The operation is designed to enhance the private sector’s role in the economy, address macroeconomic imbalances, and expand trade opportunities. It also aims to improve fiscal transparency and public spending efficiency, ensuring a more robust and transparent economic framework. Notably, the operation will also focus on protecting poor and vulnerable households from the adverse effects of economic adjustments, providing a critical safety net during periods of transition.
Maryam Salim, World Bank Country Director for Eritrea, Ethiopia, South Sudan, and Sudan, emphasized the significance of the reforms supported by this initiative: “Successful implementation of these reforms can help the country reach its full potential so more Ethiopians can thrive. Importantly, there is a strong emphasis on protecting poor and vulnerable people from the costs of economic adjustment and expanding opportunities for them to participate in the economy.”
The policy operation is part of a broader engagement by the World Bank in Ethiopia, which includes investments in various sectors such as health, education, social protection, and infrastructure development. This includes support for sustainable land and forest management, renewable energy expansion, and resilience building against climate risks. The initiative is complemented by other World Bank engagements, including the International Finance Corporation’s $320 million investment portfolio and the Multilateral Investment Guarantee Agency’s $1.15 billion in guarantees.
Looking ahead, the World Bank commits to supporting Ethiopia’s aspirations to become a middle-income country, with plans to provide around $6 billion in new commitments over the next three years. This support aims to drive economic reforms and fast-track budget support, underscoring the Bank’s long-term investment in Ethiopia’s economic stability and growth.
The World Bank Group also expressed condolences to those affected by the recent landslide in the Gofa Zone, offering readiness to assist in recovery efforts.
For more information, visit IDA.worldbank.org.
