New World Bank Financing Boosts Economic Reform, Social Protection

Jul 6 , 2025

The government has secured a 1 billion doallrs  financing agreement with the World Bank under the Second Sustainable and Inclusive Growth Development Policy Operation, marking a significant step forward in its reform agenda while also releasing the first instalment of funding. The package, which combines grants and concessional loans, will support Ethiopia’s Homegrown Economic Reform programme, stabilising the economy and driving structural transformation. Finance Minister Ahmed Shide and Maryam Salim, the World Bank’s Country Director for Ethiopia, Eritrea, Sudan, and South Sudan, signed the agreement. Officials say the funding will help strengthen the financial sector, boost trade competitiveness, increase domestic revenue collection, and improve transparency in public sector governance. Safeguarding essential social services remains a key priority. “The World Bank remains committed to accompanying Ethiopia on its journey towards inclusive and resilient economic growth,” said Maryam Salim, adding that the programme is designed to reinforce foundational policies and institutions for lasting impact. This deal is part of a wider World Bank commitment, with around 5 billion dollars in additional support expected over the next three fiscal years, subject to board approval and resource availability. The Ministry of Finance described the funding as critical to sustaining ongoing reforms that address deep-rooted economic imbalances while protecting vulnerable communities. Experts note that the concessional nature of the loan helps ease repayment pressures as the government grapples with post-conflict reconstruction, high inflation, and external debt. This latest agreement reflects the World Bank’s long-standing partnership with Ethiopia and signals cautious optimism among development partners about the country’s reform path and prospects for a sustainable recovery.