Ethiopia’s national debt was estimated to be around 42.79 billion dollars in 2020.
How much in debt is Ethiopia?
Ethiopia’s state debt was 46,985 million euros ($53,667 million) in 2020, down 29 million from 2019. This means that in 2020, Ethiopia’s debt will be 55.43 percent of GDP, down 2.49 percentage points from 2019, when it was 57.92 percent. The evolution of Ethiopian debt can be seen in the tables.
How much is Ethiopia’s 2021 debt?
According to Trading Economics global macro models and analysts, Ethiopia’s government debt to GDP is predicted to reach 62.00 percent of GDP by the end of 2021.
Who owns Ethiopian debt?
It also authorized a request for Ethiopia to use its Rapid Financing Instrument, which provided $411 million in emergency aid. These funds were made available to the central government in the form of direct budget support and were intended to help with the purchase of health supplies, the security of essential goods (such as food), and the cushioning of foreign exchange shortages—which were made worse by export losses, a drop in foreign remittances, and lower-than-expected FDI.
With a similar goal in mind, the World Bank approved a $82 million USD COVID-19 Emergency Response Project after endorsing the Growth and Transformation Plan II with $1.2 billion in 2018-2019 and an additional $500 million in 2020.
The G20 launched a single framework for debt treatments by the end of 2020, with the goal of going beyond the DSSI in tackling unsustainable debts resulting from the pandemic. Because the details of the program are still unknown, assessing how ambitious it will be is a guessing game. What appears to be certain is that it will involve some type of debt relief.
Analysts doubt that anything as significant as the Highly Indebted Poor Countries (HIPC) project is being prepared, but they point to similarities between G20 pronouncements and Paris Club rules on the subject.
Solidarity, consensus, information sharing among Club members, case-by-case decision making, conditionality on beneficiary country participation in an IMF program, and comparability of treatment for non-Paris Club commercial and bilateral creditors were all established by the influential group of creditor countries.
Creditors, who have significant incentives to fight calls for debt revision, aspire to achieve a fair distribution of debt relief burdens by following these principles. Ethiopia has officially stated that it will pursue a restructuring of its sovereign debt, so now is a good moment to look at the problems this project may present, as well as how Ethiopia will approach the next negotiations.
Due to the current circumstances, the federal government is unable to pursue its pre-crisis reform agenda while seeking debt relief. On the latter point, a number of obstacles could stymie speedy development.
First, any structure that requires the government to engage into agreements with the IMF is likely to delay down negotiations. In fact, despite the fact that the administration has already received IMF assistance for its plans, payouts are falling behind schedule.
This could be attributable to Ethiopia’s desire for re-phasing payments, but the IMF’s unconditional support for debt restructuring plans should not be taken for granted.
Second, the framework confronts challenges relating to public financial openness, which originate from charges that China and private creditors are frequently concealing loan terms. Ethiopia is no exception in this regard.
Overall, the central government’s performance has improved, with the central government receiving largely Bs on public finance transparency indicators in a 2019 PEFA assessment, which rates countries’ public finance management on a scale of A to D.
While the structure and ownership of a $1 billion Eurobond are transparent, the terms of the remaining 85 percent of external debt owed to private creditors, which is split between suppliers (25 percent) and commercial banks (60 percent), are not.
Furthermore, there have been concerns voiced about China’s opaque financing processes, which raises uncertainty for other participants in the project.
Third, the most significant unknown in the negotiations is what terms the government will be expected to demand from other creditors. If recent debt restructuring frameworks, such as the Evian approach, set the tone of the debate, participants may be compelled to “…seek debt relief from non-Paris Club commercial and bilateral creditors on comparable conditions to those given by Paris Club members.”
To put it another way, if the G20 asks for a comparable clause to be included, private and bilateral public sector creditors, whether they are state lenders or commercial companies, would have to agree to the same terms for the agreement to take effect.
Figure 2, which illustrates the percentages of Ethiopian external debt by owner, demonstrates why those negotiations could be lengthy and difficult. Because official bilateral or private creditors hold 52 percent of it, multilateral actors are unlikely to agree on a settlement that leaves them as the sole losers.
The support thus far from China, which is generally hesitant to undertake debt restructuring and holds a major portion of the Non-Paris Club bilateral obligations, is an encouraging sign. Nonetheless, private actors, who possess roughly 23% of the total, may hinder the government’s objective.
Despite the Finance Ministry’s cautious statements, bondholders were not pleased with the price decline on their Ethiopian debt titles, which followed the lowering of Ethiopia’s long-term foreign currency credit rating by rating agencies.
The reputational damage suffered on international capital markets as a result of similar shocks, which are likely to make borrowing from private actors more difficult in the future, is severe, to the point where countries like Kenya have already stated that they will not enter similar G20 agreements.
Internally, the formation of the Liability and Asset Management Corporation is a first step in resolving SOE debt problems. The corporation will buy the debt of these enterprises and fund itself primarily from the proceeds of their privatization. Still, with few information about how it will work available, it’s difficult to say whether the proposal will be much more than a debt-restructuring exercise.
Even if a sound execution produced the anticipated short-term results, long-term debt management success can only be accomplished in a thriving economy within a united country.
Regrettably, the current climate does not appear to be conducive to the latter two requirements. The macroeconomic situation has deteriorated dramatically, with IMF projections for the previous and coming year indicating that growth has nearly halted, the balance of payments has deteriorated to a historic negative level, and exports have shrunk to 2017 levels. The NBE reported a negative balance between its Foreign Exchange Holdings and Liabilities for the first time in FY 2019/2020.
Which country owes the most debt?
What countries have the world’s largest debt? The top 10 countries with the largest national debt are listed below:
With a population of 127,185,332, Japan holds the world’s biggest national debt, accounting for 234.18 percent of GDP, followed by Greece (181.78 percent). The national debt of Japan is presently $1,028 trillion ($9.087 trillion USD). After Japan’s stock market plummeted, the government bailed out banks and insurance businesses by providing low-interest loans. After a period of time, banking institutions had to be consolidated and nationalized, and other fiscal stimulus measures were implemented to help the faltering economy get back on track. Unfortunately, these initiatives resulted in a massive increase in Japan’s debt.
The national debt of China now stands at 54.44 percent of GDP, up from 41.54 percent in 2014. China’s national debt currently stands at more than 38 trillion yuan ($5 trillion USD). According to a 2015 assessment by the International Monetary Fund, China’s debt is comparatively modest, and many economists have rejected concerns about the debt’s size, both overall and in relation to China’s GDP. With a population of 1,415,045,928 people, China currently possesses the world’s greatest economy and population.
At 19.48 percent of GDP, Russia has one of the lowest debt ratios in the world. Russia is the world’s tenth least indebted country. The overall debt of Russia is currently about 14 billion y ($216 billion USD). The majority of Russia’s external debt is held by private companies.
The national debt of Canada is currently 83.81 percent of GDP. The national debt of Canada is presently over $1.2 trillion CAD ($925 billion USD). Following the 1990s, Canada’s debt decreased gradually until 2010, when it began to rise again.
Germany’s debt to GDP ratio is at 59.81 percent. The entire debt of Germany is estimated to be around 2.291 trillion € ($2.527 trillion USD). Germany has the largest economy in Europe.
How much money does Ethiopia owe China?
According to data provided by the China Africa Research Initiative (CARI) at Johns Hopkins University and Boston University, Ethiopia borrowed $13.7 billion from Chinese lenders between 2000 and 2019.
Does Eritrea have debt?
In 2020, Eritrea was hit by a locust invasion and the COVID–19 pandemic, both of which slowed economic activity. Real GDP is predicted to fall by 0.6 percent in 2020, compared to 3.8 percent increase in 2019. Supply chain and working-hour delays caused by pandemics, as well as containment measures such as travel restrictions, all hinder growth. Private spending and investment, as well as lower net exports, all contributed to the GDP drop. Prices rose 4.7 percent in 2020 after deflation of 16.4 percent in 2019, owing in part to COVID–19-induced disruptions in regional and global supply chains. In 2020, the budget deficit increased to 5.2 percent of GDP, up from 1.6 percent in 2019. The decline was caused by increasing government spending to combat the pandemic’s effects while revenues declined. The fiscal deficit was covered by withdrawing government deposits from the central bank and borrowing at a low interest rate. The current account surplus is expected to fall to 10.1 percent of GDP in 2020, down from 12.1 percent in 2019, owing to a narrowing savings–investment difference as savings fell in line with slower economic growth. The surplus of savings over investments is due in part to a business regulatory environment that has discouraged investment and employment growth. Poverty remains widespread, with the working poor (those earning less than $3.10 per day at purchasing power parity) accounting for 75.2 percent of total employment.
Real GDP growth is expected to rebound to 5.7 percent in 2021 before slowing to 3.7 percent in 2022, according to the forecast. Following a steady increase in global demand and pricing, a rebound in metal exports will fuel economic growth. In 2021, growth is predicted to be supported by a rebound in private consumption and rising investment demand. The primary downside risks to growth are continued civil unrest in neighboring Ethiopia’s Tigray area, climate change shocks, and restricted financial inflows. As domestic production expands, inflation is expected to rise to 2.6 percent in 2021 before falling to 1.9 percent in 2022. Domestic revenues are expected to expand in lockstep with the economy, reducing the budget deficit to 4.4 percent of GDP in 2021 and 1.3 percent in 2022. Due to changes in national savings, the current account surplus is expected to rise to 10.8% of GDP in 2021 before declining to 10.5 percent in 2022. Because the services sector, which employs 30.3 percent of the workforce, was the hardest hit by the COVID–19 control measures, poverty and income inequality are anticipated to rise. Remittance inflows, a crucial source of income in Eritrea, will increase as the global economy improves, reducing poverty and income inequality.
Eritrea’s overall public debt increased to 189.2% of GDP in 2019, up from 185.8% in 2018, putting the country in debt difficulty. Primary deficits and high real effective interest rates drove the increase in gross public debt, with real GDP growth somewhat offsetting the increase in debt. Due to government initiatives to expedite debt servicing, gross public debt is expected to fall to 185.6 percent of GDP in 2020 and 165.7 percent in 2022. Strong policy changes, particularly fiscal austerity, will be good, but debt restructuring is required to assure debt sustainability. The Country Policy and Institutional Assessment score for Quality of Policies and Institutions is less than 2.69, indicating insufficient capacities, especially debt management. High economic growth with increasing private sector participation, as well as fiscal reforms—particularly domestic resource mobilization, fiscal consolidation, and institution strengthening—should be part of policy measures to assure debt sustainability in this setting.
Does China have a national debt?
7.0 trillion dollars), or around 45 percent of GDP. Chinese local governments may have an additional CN 40 trillion ($5.8 trillion) in off-balance sheet debt, according to Standard & Poor’s Global Ratings. According to the International Monetary Fund, debt owed by state-owned industrial businesses accounts for another 74 percent of GDP. A additional 29 percent of GDP is owed by the three government-owned banks (China Development Bank, Agricultural Development Bank of China, and Exim Bank of China). China’s high debt level is a contemporary economic issue.
- Ethiopia strives for increased transparency and democratic processes. Since 2018, a variety of steps have been done to promote domestic reconciliation as well as international peace. The rapprochement with Eritrea over a two-decade-old border issue is a positive sign for Ethiopia’s long-term stability.
- More than 70% of the 115 million people in the country are under the age of 30, and 50% are under the age of 15.
- The government’s 70:30 higher education program, which trains 70% of students in technology and science and 30% in social science and humanities, has aided in the production of competent workforce for the country’s burgeoning industrial industry.
- Railway projects, sugar development plants, industrial parks, hotels, Ethiopian Airlines, Ethio-Telecom, energy production projects, and the Ethiopian Shipping and Logistics Services Enterprise are among the state-owned firms slated for partial or complete privatization.
- Ethiopia serves as a crossroads for travel to the Middle East, Europe, and Asia. Ethiopian Airlines is a key player in this area, linking Africa to the rest of the world. In addition to the more than 100 foreign embassies, the country is home to the African Union and the United Nations Economic Commission for Africa.
- Ethiopia is rich in renewable energy resources, with the capacity to create more than 60,000 megawatts (MW) of electricity from hydropower, wind, sun, and geothermal sources. Ethiopia is currently one of the few countries that offers low-cost electric power to businesses.
- Ethiopia is constructing the Grand Ethiopian Renaissance Dam (GERD), which will generate 45,000 megawatts of electricity. Millions of Ethiopians could benefit from the dam, which has the capacity to pull them out of poverty and improve their living conditions. It will strengthen Ethiopia’s ties with its neighbors and pave the way for regional economic union. (As of December 2020)
Ethiopia is the size of France and Spain combined and five times the size of the United Kingdom, with a total area of 114 million square kilometers. The Abyssinian highlands span from north to south across the country. The ground declines to the Sudanese grasslands to the west of the chain, and the Afar deserts to the east. The Rift Valley Lakes dominate the landscape south of Addis Ababa.
Ethiopia occupies a crucial position in Africa’s Horn. Its international trade is boosted by its proximity to the Middle East and Europe, as well as convenient access to the region’s major ports. It is bordered on the west by Sudan, on the east by Somalia and Djibouti, on the north by Eritrea, and on the south by Kenya.
Ethiopia is three hours ahead of GMT. It’s worth remembering, though, that Ethiopia has its own time zone. This is based on the assumption that an Ethiopian day consists of approximately 12 hours of daylight beginning at 6 a.m. and approximately 12 hours of darkness beginning at 6 p.m. As a result, 7 a.m. is 1 a.m. Ethiopian time.
Both systems are frequently used by Ethiopians throughout the city. Nonetheless, it is always worth knowing which system is being used when asking for dates and times!
In Ethiopia, there are two seasons: the dry season lasts from October to May, with brief showers in March, and the rainy season lasts from June until the end of September. The seasons are different in the Omo and Mago parks in Southern Ethiopia, with the main rainfall from March to June and lesser showers in November.
Despite the fact that Ethiopia is only 15 degrees north of the equator, the central highlands, where the majority of Ethiopians live, have a temperate and pleasant climate due to the moderating influence of high altitude. In much of the country, temperatures rarely surpass 25°C in the highlands above 2,000 meters. It can grow more hotter in the lower lying areas (Awash, Omo, and Mago parks), which have sub-tropical and tropical temperatures. The temperature tends to drop significantly when the sun sets.
What is the national currency of Ethiopia?
- The Ethiopian birr (ETB), the country’s official currency, is issued by the National Bank of Ethiopia, which controls its value through a filthy float.
- The birr is classified as an unusual or lightly traded currency in the foreign exchange market.
- The Maria Theresa thaler, named after the Empress of the Holy Roman Empire, was the first recorded currency.
What country has no debt?
Brunei is one of the least indebted countries in the world. It has a debt-to-GDP ratio of 2.46 percent, making it the world’s debt-free country with a population of 439,000 people. Brunei is a tiny island nation in Southeast Asia. Despite this, Brunei has been recognized as one of the richest countries in the world due to its oil and gas development. Since gaining independence from the United Kingdom in 1984, the country has experienced remarkable economic growth in the 1990s.
