Friday, May 24, 2024
BusinessEthiopia, Russia agree on debt relief scheme

Ethiopia, Russia agree on debt relief scheme

Russia provided a “debt for development” scheme for Ethiopia through which the latter can service the remaining USD 162.2 million debt it has incurred during the military regime.

According to reports, officials from both sides have agreed in April allowing Ethiopia to utilize its arrears for development projects in the country but with a precondition of involving Russian companies.

Senior officials at Ministry of Finance and Economic Cooperation of Ethiopia have confirmed the agreement that was reached with Russia adding that the government is now considering a list of projects in engineering, science and technology.

“If these projects are approved by Russian counterparts then the government will invite interested Russian companies to compete,” the senior official told The Reporter.

Ethiopia has obtained debt relief worth six billion dollars in 2001 under the Highly Indebted Poor Countries (HIPC) Initiative. Out of the stated amount 4.8 billion dollar was canceled by the government of Russia.

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Former minister of Ethiopian Finance and Economic Development Sufian Ahmed was vocal at the time of the debt relief by boldly urging the Government of Russia to write-off the entire debt that Ethiopia owed to Russia. Sufian had been busy up until he was in office urging his Russian counterparts to entirely annul Ethiopia’s debt, explaining the debt as bad one and utilized for destructive ends.

The former Ethiopian president Mengistu Hailemariam was known to be a staunch supporter of Marxist ideology and was one of Russia’s staunchest supporters against Western influences especially in the Horn of Africa.

This deep relationship helped him to spent billions of dollars trying to suppress rebellion that arose in the Northern part of the country against his rule and the neighboring Somalia’s expansionist movement.

The debt the Derg regime incurred was not filly paid until now while the other debts that Ethiopia owed are from Bulgaria, Libya, Yugoslavia, Italy, Czechoslovakia and India.

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