Ethiopia has signed a $1 billion financing agreement with the World Bank to support its economic reform program and stimulate growth, the country’s finance ministry announced on Friday.
The funding, comprising a $650 million grant and a $350 million concessional loan, will help strengthen financial sector stability, improve trade competitiveness, and enhance domestic resource mobilization, the ministry said in a Facebook post.
The World Bank stated that, subject to board approval and resource availability, its International Development Association (IDA) plans to allocate roughly $5 billion in new financing to Ethiopia over the next three fiscal years. 
This development follows the International Monetary Fund’s (IMF) recent approval of the latest review of Ethiopia’s $3.4 billion loan program, granting the East African nation access to an additional $262.3 million tranche.
Ethiopia has undertaken significant economic reforms under IMF guidance, including last year’s decision to float its currency, the birr, and efforts to open its previously closed economy to private sector participation.
The IMF has emphasized the need for Ethiopia to improve foreign exchange market operations, increase domestic revenues, restore external debt sustainability, and enhance fiscal transparency to ensure long-term economic stability.
The latest funding pledges mark a crucial step in Ethiopia’s efforts to stabilize its economy and foster sustainable growth amid ongoing financial challenges.
