World Bank has approved a $250-million supplemental financing to Ethiopia on Wednesday. The financing, approved by the Bank's Board of Executive Directors, is part of Ethiopia's second and ongoing Growth and Competitiveness Programmatic Development Policy Financing. Half of the amount, $125 million, is in grants, while the remaining half is a loan.

The financing aims to help Ethiopia revitalize its economy by broadening the role of the private sector and attaining a more sustainable development path. In addition to this, it will "help the Government of Ethiopia close an unexpected financing gap due to the COVID-19  pandemic," the World Bank said in a statement.

A $1.5-billion extra financing need is anticipated as the coronavirus pandemic threatens to weaken the collection of revenues, while at the same time causes an acute increase in expenditure.

Carolyn Turk, World Bank Country Director for Ethiopia, Sudan, South Sudan, and Eritrea, said, “The COVID-19 pandemic is expected to severely impact Ethiopia’s economy. The austerity of the required containment measures, along with disruptions to air travel and the collapse in international demand for goods exported by Ethiopia are already taking a toll on the economy,” 

The Country Director estimated "1.8 million jobs are at risk, and the incomes and livelihoods of several million informal workers, self-employed individuals and farmers are expected to be affected.”

The financing is expected to add to the efforts of the Ethiopian government to mobilize financial assistance for crisis response. The operation is one of the pillars of the World Bank’s immediate response to mitigate the impact of the global crisis on Ethiopia.

The World Bank had provided initial funding of $82.6 million to Ethiopia in April, in an effort to help the latter combat the pandemic.

Sources: The World Bank (website), ENA