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Ethiopia’s Drought Causing Inflationary Pressure, Risk of Public Debt Distress

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The drought that Ethiopia faced in 2015 has required an emergency food aid and is now causing an inflationary pressure, a new report by the United Nations Development Program has revealed.


The report, which is expected to be released on Thursday in Addis Ababa, found out that there is also a risk of public debt distress that is caused by non- concessional borrowing and the underlining export underperformance in 2014/2015.

“Despite that, the economy showed strong growth in 2014/15 estimated at 10.2%,” the report said adding that the growth will continue in the 2016/17 period while public investment is expected to ease infrastructure bottlenecks and bolster economic structural transformation. “The urban population, growing at 3.8% per annum, is expected to reach 42.3 million by 2037, which could pose significant development challenges if not addressed.”

Minister at the Ministry of Finance and Economic Cooperation, Ahmed Shide, and other UN officials are expected to launch the Country Report at the Sheraton Addis on Thursday.