The World Bank has approved a $700 million credit to Ethiopia to support the East African country’s Financial Sector Strengthening Project (FSSP).
The credit to be funded through the International Development Association (IDA) aims to fortify the stability and resilience of Ethiopia’s financial sector, laying the groundwork for sustainable economic growth, the world bank said in a statement on Saturday.
According to the statement, Ethiopia’s financial system currently faces significant hurdles, including outdated regulatory frameworks and struggling public financial institutions.
The FSSP is designed to address these challenges by modernizing the regulatory and supervisory framework of the National Bank of Ethiopia (NBE), overhauling governance structures, and restructuring the balance sheets of key institutions like the Commercial Bank of Ethiopia (CBE) and the Development Bank of Ethiopia (DBE).
The project will also support the transformation of the DBE into a sustainable development finance institution, ensuring its long-term viability in driving Ethiopia’s economic development.
A critical component of the initiative is the capacity-building and implementation support for the NBE, CBE, and DBE, aimed at fostering resilience and improving financial accessibility for Ethiopians across the board.
Maryam Salim, World Bank Country Director for Eritrea, Ethiopia, South Sudan, and Sudan, emphasized the project’s transformative potential.
“We are proud to support Ethiopia in its journey to transform and strengthen its financial sector. This project reflects our commitment to promoting economic stability and inclusive growth in the country. By boosting the capacity of key financial institutions, we aim to build a more resilient and accessible financial system that truly meets the needs of all Ethiopians,” Salim said.
The approval of the FSSP marks a pivotal moment in Ethiopia’s efforts to build a financial system that supports economic diversity and inclusiveness.
MG/as/APA