Ahmad 
The World Bank has approved a $1.5 billion financial aid package for Ethiopia, including grants and low-interest loans.
The decision comes after Ethiopia floated its national currency, the birr, paving the way for future debt restructuring.
The new funding aims to support the national budget as the country works to improve economic stability and promote domestic reforms, including liberalizing the foreign exchange market and implementing measures to allow the private sector to play a greater role in the national economy.
In conjunction with the World Bank funding, Ethiopia received support from the International Monetary Fund with a four-year $3.4 billion program, which was approved hours after the currency float.
Ethiopia is moving toward a flexible exchange rate regime that is creating new economic challenges, with some analysts fearing that this could lead to higher inflation and higher living costs, particularly affecting the poor.
Since the beginning of 2024, Ethiopia has been facing a severe economic crisis. Although the Ethiopian economy grew by 7.2% in 2023, the country is suffering from a significant decline in foreign reserves, which have fallen to less than $1 billion, covering less than two weeks of imports. Inflation is also still high, with a slight slowdown to 28.7% in December 2023 compared to 34.2% in March 2023.
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