Because Ethiopia didn’t sign the US proposed rotten deal over the dam, the Pathetic World Bank Shamelessly Suspends the $500m Emergency loan
The World Bank has suspended the $500 million it had pledged for Ethiopia as emergency financial support.
Local media reported that the Bank cited two reasons to suspend financial support; the first was the country’s sluggish effort to improve its currency exchange rate against the dollar.
Both the World Bank and International Monetary Fund (IMF) had recommended the government of Ethiopia to devalue the Ethiopian birr against the dollar as a remedy to rectify a shortfall in foreign exchanges.
In March this year, the World Bank’s Board of Executive Directors pledged $500 million ($312.2 million grant and $187.8 million credit) from the International Development Association (IDA) in continued support of the Government of Ethiopia’s Homegrown Reform Agenda.
The financial support was intended to accelerate Ethiopia’s economic growth and achieve its vision of becoming a lower-middle-income country by 2025.
The bank also cited the government’s failure to execute energy-based projects as per their schedules as a second reason to suspend the much-needed money by Ethiopia.
The Bank had also required the government to enhance the role of the private sector and realize the homegrown economic reform.
The suspension followed Ethiopia’s decision to start filling the Grand Ethiopian Renaissance Dam’s reservoir in July even though Egypt and Sudan persisted demanding the filling should start after an agreement is reached among the countries.
The World Bank and the United States of America which mediated the previous talks between Ethiopia, Egypt, and Sudan had insisted that Ethiopia should not begin filling the dam ahead of agreement among the countries.
The US, which has a greater say in the World Bank, is trying to persuade Ethiopia to accept its decision otherwise it was impossible for Ethiopia to meet the bank’s requirement amid COVID-19 pandemic, local political experts commented