Ethiopia Avoiding International Commercial Loans - Ministry
June 5, 2019 (Ezega.com) -- Ethiopian Ministry of Finance has disclosed the country is avoiding commercial loans due to worries of accumulated debt.
Finance Minister Ahmed Shide said the country stopped borrowing commercial loans the past ten months of the fiscal year.
According to the report, Ethiopia's external and domestic accumulated debt has hit 27 billion US dollars or 731 billion birr.
In his performance report to the HPR, Ahmed Shide said the country has paid 9.4 billion USD of its external debt.
Ethiopia's Gross Domestic Product (GDP) to debt ratio is currently 44 percent, which is modest. The government wants to limit that figure from going over 56 percent.
Ethiopia has long struggled from weak export earnings. The country of over 100 million people is landlocked and relies on neighboring countries for sea access. Port fees, regulatory delays and poor infrastructure within the country itself are belived to be major factors affecting Ethiopia's competitiveness.
Currently, Ethiopia relies for hard currencies primarily on agriculture and Ethiopian diaspora remittances.
US Dollar-Birr exchange rate in the black market is believed to have reached 38-40 levels, up from the official rate of about 28.