Addis Ababa July 8/2019 Prime Minister Abiy Ahmed said the new borrowing scheme, which shifted from commercial to concessional loans, has brought opportunities that helped the country emerge from economic crisis.
Presenting his government’s economic plan for the next budget year, the premier said by correcting the approach to external borrowing Ethiopia changed 47 percent of the commercial loan into concessional loan from China alone. The PM called “this is as a great achievement.”
“Because of this fruitful debt restructuring negotiation during the previous fiscal year, we have saved 400 million USD, which was expected to be payed every year,” Abiy elaborated.
The PM revealed that as the country has not been listed among countries with heavy debt burden, it has been receiving loans from international financial organizations.
According to him, the nation’s loan is insignificant as domestic and external debt pressure is always measured by Growth Domestic Product (GDP).
Yet the timely payment of debt is challenging, he noted.
Abiy stated that the external accumulated debt has reached 30 percent, adding that “this is very little ;even when compared to developed countries that are 100 percent in debt.”
The premier said Ethiopia’s export performance has, however, become a challenge to repay its loan on a given time. As a result, the country has prioritized on the productive sector in order to stimulate the export sector.
The low export annual performance, which amounted to 2.1 billion USD, has created hard currency shortage caused by the shortfall in paying debt, it was indicated.