African Development Bank strengthens Ethiopia’s debt management capacity

The African Development Bank (AfDB) conducted last week the first of a series of capacity development sessions on debt management for Ethiopia in Addis Ababa.

The training covers several themes including loan negotiations and management, domestic debt and capital markets development, and enhancement of analytical and evaluation advisory capacity, among others.

Skills and competencies acquired through the training will enable the Government to improve debt management and increase domestic resources mobilization, notably through the development of domestic debt and capital markets.

Furthermore, Government authorities will apply the acquired skills to rigorously assess the risks associated with various financing options, leading to the design and implementation of a prioritized public investment program. The phased implementation of public investments will also increase access to finance for the private sector and thereby promote private investment.

Strengthening the private sector’s role as a leading driver of growth is consistent with Ethiopia’s Growth and Transformation Plan II (2015-2016 and 2019-2020). Ethiopia has achieved strong economic progress with real GDP growth averaging over 10% during 2003-2004 and 2016-2017 driven by public infrastructure and foreign direct investment especially in infrastructure and manufacturing.

However, fluctuations in global demand and commodity prices and the vulnerability of debt sustainability to export performance are key downside risks to Ethiopia’s economic outlook.

In addition to the ongoing measures to promote and diversify exports, such as the development of industrial parks across the country, robust debt management capacities will be required to mitigate these downside risks.

In this context, this technical assistance is part of the operationalization of the Bank’s Country Strategy Paper (2016-2020) for Ethiopia, which focuses on accelerating structural transformation and private sector development. It is also aligned with the Bank’s Ten Year Strategy (2013-2022) and High 5s.

Funded by the South-South Cooperation Trust Fund and managed by the African Development Bank, the assistance runs from December 2017 to March 2018.

Reports show that In 2016, the national debt of Ethiopia amounted to around 30.73 billion U.S. dollars. Values have been rounded for better understanding of the statistic. Exchange rate as of May 28, 2018, 1 ETB = 0.0362732 U.S. dollars.