World Bank requests Ethiopia to prepare for debt risks
World Bank requests Ethiopia to prepare for debt risks
The weight of public spending concerns the Bank
World Bank Group officials have expressed concerns over the rising level of debts in Ethiopia and suggested the need for a proper risk management aimed at employing a transparent approach.
Concluding a three-day official visit, Sri Mulyani Indrawati, managing director and chief operating officer of the WB group, told reporters on Wednesday that with the mounting level of debts, Ethiopia needs to be prepared for risks. According to the Ministry of Finance and Economic Development (MoFED), the current level of outstanding public debts rest at some USD 20 billion, out of which the external debt figures stood at some USD 12 billion last year. The debt to the Gross Domestic Product (GDP) ratio remains at 44 percent, yet that, according to WB officials, is low compared to other nations.
The managing director told reporters that one of her discussions was directed towards reforming the governance and regulatory framework, transparency and efficiency of the economy. With Prime Minister Hailmariam Desalegn, she discussed the role of state-owned enterprises. She mentioned that state-owned enterprises are expanding fast in Ethiopia. Indrawati said within the past couple of years, the investments made by state-owned enterprises kept rising. For the mounting level of debt, according to Indrawati, Ethiopia needs to be sure whether it can deter the risks of increasing debts. “A good and sound financial report, transparency and consistency and credible information are very important,” she said. “The current borrowing trend definitely will create additional exposure of risks for Ethiopia,” the managing director warned. Making matters difficult, Ethiopia’s export performance is questioned for debt financing abilities. According to the government, the performance targets have been declining for a couple of years. The worst performance was recorded in the past three years.
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World Bank Group officials have expressed concerns over the rising level of debts in Ethiopia and suggested the need for a proper risk management aimed at employing a transparent approach.
Concluding a three-day official visit, Sri Mulyani Indrawati, managing director and chief operating officer of the WB group, told reporters on Wednesday that with the mounting level of debts, Ethiopia needs to be prepared for risks. According to the Ministry of Finance and Economic Development (MoFED), the current level of outstanding public debts rest at some USD 20 billion, out of which the external debt figures stood at some USD 12 billion last year. The debt to the Gross Domestic Product (GDP) ratio remains at 44 percent, yet that, according to WB officials, is low compared to other nations.
The managing director told reporters that one of her discussions was directed towards reforming the governance and regulatory framework, transparency and efficiency of the economy. With Prime Minister Hailmariam Desalegn, she discussed the role of state-owned enterprises. She mentioned that state-owned enterprises are expanding fast in Ethiopia. Indrawati said within the past couple of years, the investments made by state-owned enterprises kept rising. For the mounting level of debt, according to Indrawati, Ethiopia needs to be sure whether it can deter the risks of increasing debts. “A good and sound financial report, transparency and consistency and credible information are very important,” she said. “The current borrowing trend definitely will create additional exposure of risks for Ethiopia,” the managing director warned. Making matters difficult, Ethiopia’s export performance is questioned for debt financing abilities. According to the government, the performance targets have been declining for a couple of years. The worst performance was recorded in the past three years.
Read More at the Reporter
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