Finance Minister Ahmed Wants Sustainable Debt, Not Simply Available Loans

Jun 1 , 2024


[ssba-buttons]

Ethiopia's Finance Minister, Ahmed Shedie, issued a stark reminder about the importance of sustainable debt practices during a panel at the African Development Bank (AfDB) annual meetings in Nairobi, Kenya. He stressed that debt should not be taken simply because it is available but should be leveraged when proven sustainable, marking it as a responsibility. His remarks come as Ethiopia finds itself among 22 African economies that are highly indebted or on the brink of default. The country's external debt has reached 28 billion dollars, part of the 1.15 trillion dollar debt stock held by African countries, nearly twice the continent’s GDP. The debt dilemma was a prominent topic at the AfDB meetings, where African leaders and financial experts debated balancing debt management with economic growth. Minister Ahmed advocated for using debt to spur economic development while maintaining sustainability. "The most important thing is what you do with the debt," he asserted. Ahmed pointed to domestic resource mobilisation and prudent external and local borrowing as key strategies, despite being faced with an economy that generates only eight percent of its GDP in taxes, well below the 13pc average for sub-Saharan Africa. The panellists also discussed the importance of balancing domestic and external debt. They discussed while domestic borrowing can reduce foreign exchange risks, it also has implications for the domestic economy. Finance Minister Ahmed agreed that domestic resource mobilisation could be crucial but argued that responsible borrowing practices must complement it. He outlined Ethiopia's efforts to balance domestic and external debt while focusing on generating growth and exports.


Radar

Bank of Abyssinia Signs Partnership with Droga Cooperative

Bank of Abyssinia has entered into a partnership agreement with Droga Health & Financial Savings and Credit Cooperative to provide financial support and services for its members. The agreement was signed yesterday at the Bank's headquarters. The deal aims to strengthen collaboration between the two institutions, enabling cooperative members to access tailored banking services. It was signed by Wosenyeleh Abera, Deputy CEO for Customer Relations and Marketing at the bank, and Zelalem Yilma...


Radar

Wegagen Introduces Real Time SWIFT Tracking

Wegagen Bank has launched a new mobile app feature enabling customers to track international SWIFT payments in real time. The bank is the first in Ethiopia to introduce an online SWIFT payment tracking system. By integrating SWIFT Global Payment Innovation, customers, particularly those involved in import-export trade, can monitor cross-border transactions using a Unique End-to-End Transaction Reference (UETR) directly from their smartphones. To use the service, customers select the SWIFT...


Radar

National ID, Zambia Partners to Expands Program Reach

The National ID Program has signed an agreement with Zambia's counterpart to provide consulting services for the development of software that will issue digital IDs. It is the first time the institution has extended its expertise beyond national borders, a sign of growing recognition for its rapid progress. Program officials described the partnership as a milestone in their effort to position themselves as a regional player in digital transformation. The collaboration is expected to center...