Ethiopia’s Ministry of Finance and the World Bank signed a 700 million USD loan agreement to support the implementation of the Financial Sector Strengthening Project, which aims to enhance the stability and sustainability of Ethiopia’s financial sector.
The agreement was signed by Ahmed Shide, Minister of Finance, representing the Government of Ethiopia, and Maryam Salim, Country Director for Ethiopia, Eritrea, Sudan, and South Sudan at the World Bank.
The Financial Sector Strengthening Project (FSSP) is strategically designed to support critical financial sector reforms and recapitalization efforts of the Commercial Bank of Ethiopia and the Development Bank of Ethiopia.
The financing supports the government’s recent bold reform to modernize and liberalize banking operations in the country, according to the Ministry of Finance.
It follows the recent decision to issue 900 billion ETB worth of government debt securities to settle CBE’s non-performing loans and facilitate its recapitalization.
Accordingly, a substantial portion of the funding will be allocated to recapitalizing THE Commercial Bank of Ethiopia (CBE) and Development Bank of Ethiopia (DBE), addressing debt legacy issues, improving asset quality, and ensuring compliance with capital adequacy requirements.
Moreover, it supports enhancing financial stability by strengthening the supervisory and regulatory framework of the banking sector.
It supports the government’s effort to create opportunities for access to capital to enhance job creation and sustain economic growth.
Source: ENA
