- To offer local currency-based loans
The International Finance Corporation (IFC), best known as the private sector arm of the World Bank Group, has inked agreements to guarantee Ethiopia’s global trade, mostly involving import bills.
The global trade financing scheme agreement was signed between the IFC and the National Bank of Ethiopia (NBE), in the presence of Phillipe Le Houerou, Chief Executive Officer of the IFC.
During the signing, Le Houerou said that Ethiopia will have a guaranteed import while the amount of the trade financing will depend on the scale and capacity of local banks. Singing the agreements, Yinager Dessie (PhD), governor of NBE said that the global trade financing comes at a time when the country is being tested with acute shortage of hard currency.
Though not yet disclosed, the amount of the trade financing program or import bill guarantee is expected to cover the whole import bill as believed by government officials. The country’s import bill currently lingers around USD 20 billion, annually.
In addition to that, IFC also agreed to provide loans secured in hard currencies to be repaid in local currency – in birr terms. However, this window of support will start small with prioritized sectors such as agri-business.
The six-day official visit of the CEO to Ethiopia was not limited only to professional matters. He said that his visit was also a personal one and he went to visit and accompany graduating classes of the school.