The International Finance Corporation (IFC) signed an agreement with the National Bank of Ethiopia (NBE) that focuses on expanding trade and financing local currency. This agreement is part of multi-year partnership entered by IFC and NBE with the intent of developing Ethiopia's promising credit reporting system.
IFC's CEO, Philippe Le Houérou, signed the agreement on IFC's behalf during his six-day official visit. On his visit, the CEO has met with President Sahlework Zewde, Prime Minister Abiy Ahmed, Minister of Finance, Ahmed Shide, Governor of NBE Yinager Dessie. The agreement is part of a larger scheme of IFC to play a much larger part in creating new markets for private investors with the goal of supporting economic development in Ethiopia.
On the occasion, Le Houérou said, “Ethiopia is emerging as one of the most attractive investment destinations in Africa and recent policy announcements are expected to further boost the country’s appeal to private investors.” IFC-supported improved credit reporting system will enable consumers, microenterprises, and small and medium business in the country to have better financing access.
“IFC’s work will help expand credit and trade and create markets, while mobilizing private financing that can become a more important factor toward diversifying Ethiopia’s economy.” During his visit Le Houérou met with key government officials and private sector leaders in Addis Ababa and visited private companies and industrial parks.
The agreements signed between IFC and the Ethiopian authorities will give way for IFC to provide guarantees for trade-related payment obligations of selected Ethiopian banks, which will be a support to Ethiopian banks as part of a global trade finance program. Also, IFC will be able to provide support to high impact projects by being able to give loans in Ethiopian birr under the local currency facility of the World Bank Group's IDA Private Sector Window.
IFC has also signed a cooperation agreement with the Ethiopian Investment Commission (EIC) to support reform efforts that plan to improve the ease of doing business.
IFC has been active in Africa for over sixty years. During those years, IFC has invested over $25 billion in African businesses and financial institutions, with a current portfolio exceeding $5 billion.
Sources: Fana BC, IFC in Sub-Saharan Africa