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Country
will divert WB loans to buy fertilizer: report
FREQUENT DEBATES
ON NATION'S DEV'T AGENDA ADVISED |
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 ADDIS
ABEBA(August 16 - 17,2008) - Ethiopia and the World
Bank are close to an agreement that will allow the country to divert
$237 million in loans and grants for infrastructure projects to purchase
fertilizer, an online media reported citing the bank.
Ethiopia needs the fertilizer before next year's planting season,
according to Bloomberg which cited Kenichi Ohashi, director of the
World Bank's Ethiopia and Sudan program, as having said in an interview.
Ethiopia is Africa's largest coffee producer.
``What we're trying to do is provide foreign exchange'', the report
quoted the official as saying. ``This is like doing budget support.
It's helping the government with hard currency.''
An additional $64 million in credit from the African Development Bank
will be diverted for fertilizer purchases, the state-run Ethiopian
Herald said on Aug. 2.
Rising domestic demand, drought, and higher world fuel and food prices
expanded Ethiopia's trade deficit to $4.7 billion in the 12 months
to July from $3.9 billion a year earlier, the report said. The country
has less than two months of foreign currency reserves, according to
the International Monetary Fund.
The financing of the fertilizer is equivalent to about 10 percent
of the World Bank's $2.4 billion Ethiopia program, which includes
$1.6 billion in loans and $800 million in grants this year. Most of
that money was allocated to road building, irrigation systems and
the construction of power transmission lines to connect Ethiopia and
Sudan.
In a related story, the Country Director has called for a regular
roundtable discussion among the concerned about the prospects of Ethiopia's
economic development on Thursday.
The Director broadly conferred at the World Bank's Country Office
with local media practitioners on issues of managing the current high
inflation rates and potential means of sustaining macro-growth pace
underscoring the imperatives of integrating fiscal and monetary policies.
Ohashi briefed the discussants on the subject of the national macro
and micro economic statures which were alluded within his op-ed statistical
report sheets.
The Director described that the current inflation rate "has jumped
to 55 percent by June which was troublingly high at 19 percent in
January"; and that Ethiopia's foreign exchange reserves are running
low, making it more difficult for domestic investors to secure foreign
currencies needed to import key materials and equipment. He nevertheless
maintains that "over the last several years, Ethiopian economy
has become much stronger" through the complex new challenges
it faces today.
In his reference to the World Bank's efforts in fighting poverty and
improving the living standards of the people of Ethiopia, he elucidated
that Ethiopia is one of the largest beneficiaries of the World Bank's
concessional lending program, the International Development Association
(IDA), with a portfolio of 28 active projects as of June 30, 2008
worth over US$ 2.6 billion of which US$ 1.74 billion is provided as
credit and the remaining 915 million is provided as Grant.
In the context of active projects support initiatives across, Ohashi
mentioned in his study report that they will involve varied areas
of: Governance and Public Sector Development, Agriculture and Rural
Development, Private Sector Development, Protection of Basic Services,
Health and HIV/AIDS, Transport, Education, and Water Sector Development
Programme.
He upheld that "today's discussion is a beginning process"
to discuss and debate actively on the country's development agenda
on a more regular and thematically focused basis. |
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