Nation Avoided Commercial Loans to Limit Pressure of Accumulated External Debt, Says Finance Minister

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Addis Ababa June 5/2019 Ethiopia has totally avoided any commercial loan during the past ten months of the fiscal year in order to limit the pressure of accumulated external debt, according to Ministry of Finance.

External and domestic accumulated debt has hit 27 billion US dollars and 731 billion birr, the ministry reported.

Finance Minister Ahmed Shide, in his performance report to the HPR, said the country has paid 9.4 billion USD of its external debt.

Beginning from the 2018/19 budget year, Ethiopia has avoided any commercial loans from foreign creditors due to the huge burden that challenged the capacity of the country’s balance of debt payment.

Noting that domestic and external debt pressure is always measured by their Growth Domestic Product (GDP) that should not jump above 56 percent, Ethiopia’s debt pressure is 44 percent.

State Minister of Finance, Admasu Nebebe pointed out that as Ethiopia has not been listed among countries with heavy debt burden it has been receiving loans from international financial organizations.  

However, the country has prioritized concessional loans by considering the grace period and maturity date of the loans that the country pays the credit in the long run, he added.Admasu stated that the low export performance which amounted 2.1 billion USD has created hard currency shortage caused the shortfall in paying debt .