The Ethiopian government has been making claims that the default scenario is reversed, and that debt is decreasing. When Prime Minister Abiy Ahmed appeared, last week, in the parliament to address questions from Parliamentarians, he made claims that his administration brought down the debt level from 59 percent of the total GDP to 38 percent.
But that does not seem to be the case. Wazema radio’s report, published on Saturday, indicates the debt level is actually increasing and increasing at an alarming rate.
The amount of internal and external debt is said to be up by about $3 billion this fiscal year.
The source said Ethiopia’s debt level was about $57.3 billion by June 2022. But this year the debt level has reached $60.6 billion. The difference in a year is said to be a total of six percent of Ethiopia’s total debt.
External debt was about $27.9 billion in 2022 and has reached $28.1 billion by March of 2023, according to the report by Wazema Radio.
A document from the Ministry of finance indicated that an increase in borrowing from local and external sources has contributed to the rise in the debt level.
The amount of money borrowed from external sources was higher from the amount of debt payment made during the same period. Based on the Wazema report, between July 2022 and March 2023 over a billion dollar loan was secured (much of it from ‘international development support’ ) but the amount of money paid towards external debt in the same period was only $948 million.
Borrowing from internal sources has gone up too. According to the source, in July 2022, government debt from internal sources was about 1.5 trillion Ethiopian Birr. By the end of March 2023, it went up to 1.7 trillion birr.
Prime Minister Abiy Ahmed has been widely criticized for prioritizing prestige mega projects – like the building of a new palace that is said to cost hundreds of billions of birr- over economically viable projects like completing the Grand Ethiopian Renaissance Dam (GERD). He has been denying that the project is not funded by taxpayers money but he did not specify where exactly the fund was obtained from.
Ethiopia’s auditor general last month said it could audit the Office of the Prime Minister and the projects that it is overseeing if asked.
To share information or for submission, send e-mail to firstname.lastname@example.org
Telegram Channel : t.me/borkena