Ethiopia - Structural Adjustment Loan II

The proposed Structural Adjustment Loan is designed to assist the Government of the Federal Democratic Republic of Ethiopia in implementing its I-PRSP. The ADF support aims at building synergy with the IMF and the World Bank support, while also focusing on important areas of the Bank’s vision and the ADF-VIII Lending Policy. It will support reform in four key areas, namely, macroeconomic framework, agriculture development and food security, public expenditure policy and management, and legal and judicial system reform. Designed to provide balance of payments support, the program will contribute towards meeting Ethiopia’s foreign exchange gap and hence contribute to boosting the official reserves. It will also indirectly help to ease government’s fiscal constraints since the counterpart funds will feed directly into the budget. Thus, the loan proceeds would also enhance the capacity of the Government to implement its poverty reduction programmes.