Prime Minister Abiy Ahmed (PhD) alighted in the French capital last week, ushering his high-level entourage, Mamo Mihretu, the central bank governor, and Ahmed Shide, his finance minister, into the "New Global Financing Pact" talks. He was met by the world's financial elite, including Ajay Banga, the new chieftain of the World Bank Group; Melinda Gates, the American philanthropist; Janet Yellen, the US Treasury's guardian; and Malfada Duarte, the helmswoman of the Green Climate Fund.

During a spirited panel discussion on the subject of multilateral development financing, Abiy delivered a lucid diagnosis of the daunting crisis cocktail beleaguering the African continent, a mélange of climate financing shortfalls, weighty debt burdens, and potent political instability. Abiy proposed a remedy of sorts, recommending that prior financing promises be upheld, more concessional loans and grants be awarded, and restructuring of IMF`s special drawing rights (SDRs) be instituted.

"Private and public debt has scaled new altitudes," the Prime Minister admonished the gathered financial titans.

The Prime Minister's plea for more favourable financial conditions, in light of Ethiopia's pressing debt burden, is a vivid illustration of the broader economic plight faced by many developing countries, particularly in Africa. The fiscal plan set forth by his Finance Minister to the Ethiopian parliament demonstrates the gravity of this issue. The budget bill proposes a 159 billion Br allocation to debt repayment next year, which only grazes the surface of the looming 27 billion dollars debt Ethiopia`s economy is shouldering. It appears that, despite all the rhetoric, the harsh reality of the country's economic straits cannot be ignored.

PUBLISHED ON Jun 24,2023 [ VOL 24 , NO 1208]

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