Ethiopia’s total debt passed $52 billion, made up of $27 billion owed abroad and 731 billion birr, about $25.4 billion, owed at home, the Ministry of Finance said in its 11-month report to parliament for the fiscal year that began on 8 July 2018, New Business Ethiopia reported. In January the total had been about $50 billion. The ministry said the country paid $9.4 billion over the 11 months.
State Minister of Finance Eyob Tekalign said the borrowing had not delivered. “We borrowed a lot of money but we have been unable to repay on the given time… We have borrowed significantly for infrastructure projects which really failed to achieve the desire[d] result,” he told lawmakers.
He said Ethiopia was renegotiating its repayment schedule with China, its biggest lender, and was avoiding new loans and new public investment projects. “We have already avoided commercial loans because these loans when they have matured have really created a challenge of accumulated debt,” he said.
The minister said the government now wanted growth from productive sectors such as mining, tourism, manufacturing and agriculture. “We are still importing wheat and edible oil which in an economy like Ethiopia is really unacceptable,” he said. The debt built up during more than a decade of fast growth led by public spending, while exports stayed weak and private business played a small role. The government expected 9.2 percent growth that year, even as political unrest weighed on the economy.
Sources: New Business Ethiopia