Ethiopia’s debt is closely linked to economic policy. The previous Ethiopian People’s Revolutionary Democratic Front (EPRDF) administration had applied a developmental state approach for two decades.
Government was thus the core enabler of the “normative, structural, institutional, technical, and administrative environments […] to achieve its national development vision” according to a paper entitled ‘Developmental State’ as an Alternative Development Path in Ethiopia: Miracle or Mirage?’.
The State needed funds for the construction and development of industrial parks, railways, highways, dams etc. Although it borrowed domestically, the country’s limited financial system and domestic savings meant it was forced to look to foreign creditors.
In the following years, public debt went from 39.61% of the GDP (2010) to reach 57.72% of the GDP (2019).
Abiy Ahmed’s rise
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