IFC signs accords with NBE to support Ethiopia’s private sector

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IFC (International Finance Corporation) CEO has signed accords with the National Bank of Ethiopia (NBE) to expand trade and local currency financing as part of broad-based private sector support in Ethiopia.

Last week, IFC entered into a multi-year partnership with the NBE to further develop Ethiopia’s nascent credit reporting system. The new agreements were signed during a six-day official visit to the country by IFC CEO Philippe Le Houérou.

The first agreement will allow IFC to support Ethiopian banks as part of a Global Trade Finance Program. Under this program, IFC will provide guarantees for trade-related payment obligations for selected Ethiopian banks. The second agreement will allow IFC to provide loans in Ethiopian birr under the local currency facility of the World Bank Group’s IDA Private Sector Window.

The window allows IFC to provide support for high impact projects when local currency solutions are otherwise unavailable. An improved credit reporting system supported by IFC will facilitate access to finance for consumers, microenterprises, and small and medium businesses in Ethiopia.

“Ethiopia is emerging as one of the country’s most attractive investment destinations in Africa and recent policy announcements are expected to further boost the country’s appeal to private investors,” said Le Houérou, “IFC’s work will help expand and expand markets. this is a major important factor towards diversifying Ethiopia’s economy. ”

During his visit Le Houerou opened the Ethiopia Capital Markets Development Workshop, sponsored by IFC and the Ministry of Finance and Economic Development. Ethiopia aims to move towards a more market-oriented approach that promotes the efficient allocation of scarce financial resources, which will require a market-based government bond market.

Le Houérou also with key government officials and private sector leaders in Addis Ababa and visited private companies and industrial parks. With President Sahle-Work Zewde, Prime Minister Abiy Ahmed, Minister of Finance and Economic Cooperation Ato Ahmed Shide, and NBE’s Governor Yinager Dessie.

Over the past five years, IFC has provided $ 452 million in new investment commitments in Ethiopia across agribusiness, finance, manufacturing, and other sectors, and providing advisory services in support of leasing, financial infrastructure, and investment climate. IFC’s strategy calls for significantly expanding its investments and mobilizing new resources from other private investors.

IFC has developed innovative public-private partnership solutions that support its policy agenda. IFC investment and advisory support is expected to help further develop agribusiness, light manufacturing and financial markets.

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