WASHINGTON, December 19, 2024 – The World Bank will be significantly scaling up its support for Ethiopia’s financial sector thanks to a newly approved $700 million credit from the International Development Association (IDA)* for the Financial Sector Strengthening Project (FSSP). This project aims to enhance the stability of the country's financial sector.
Ethiopia’s financial sector faces several pressing challenges, including inadequate regulatory frameworks and weak public financial institutions. The project is designed to tackle these issues head-on by modernizing the regulatory and supervisory framework of the National Bank of Ethiopia (NBE), supporting governance reforms, balance sheet restructuring, and recapitalization of the Commercial Bank of Ethiopia (CBE), and transforming the Development Bank of Ethiopia (DBE) into a sustainable development finance institution. Additionally, the project will provide implementation support and capacity building for NBE, CBE, and DBE to ensure their resilience and sustainability. By strengthening these key financial institutions and modernizing the financial system, the project will contribute to the country's economic growth.
"We are proud to support Ethiopia in its journey to transform and strengthen its financial sector. This project reflects our commitment to promoting economic stability and inclusive growth in the country. By boosting the capacity of key financial institutions, we aim to build a more resilient and accessible financial system that truly meets the needs of all Ethiopians,” said Maryam Salim, World Bank Country Director for Eritrea, Ethiopia, South Sudan, and Sudan.
The approval of the Financial Sector Strengthening Project is a major milestone in building a stronger financial system in Ethiopia. This project goes beyond addressing current challenges; it aims to build a more resilient financial system and unlock new opportunities for growth. By focusing on key areas that need improvement, it aims to support a financial system that can better support the diverse needs of all Ethiopians.
* IDA was established in 1960 and helps low-income countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve people’s lives. IDA is one of the largest sources of assistance for its 75 client countries, 39 of which are in Africa. Since 1960, IDA has provided $552 billion to 115 countries. Annual commitments have averaged about $36 billion over the last three years (FY21-FY23), with about 75% going to Africa. Learn more online: IDA.worldbank.org. #IDAworks
