Musings From Abroad

US to resume food aid to troubled Ethiopian regions

Published

1 year ago

November 15, 2023

Months after it stopped aid action to Ethiopia, the United States is set to resume food aid for people across the country.

A statement by the US Agency for International Development (USAID) says the return of the aid follows the implementation of comprehensive reforms.

“USAID is committing to a one-year trial period of the nationwide resumption, during which we will continuously monitor and evaluate the efficacy of the reforms put in place by USAID, implementing partners, and the government of Ethiopia,” the statement said.

Resuming food aid across the country comes after significant diplomatic engagement over the last several months resulted in “widespread and substantial reforms of the food assistance structure by the government of Ethiopia and our humanitarian partners.”

According to the agency, among other things, the reforms will “fundamentally shift” Ethiopia’s food aid system by bolstering commodity tracking and programme monitoring and oversight.

“USAID places the highest priority on taking every possible measure to make sure that U.S. humanitarian assistance is used for its intended purpose reaches the most vulnerable, and ultimately saves lives,” the statement said.

“Given the significant number of people in need of food assistance in Ethiopia, we are pleased these important reforms will allow the delivery of food assistance to those who need it most.”

In June, the US temporarily stopped providing food aid to the northern region of Ethiopia after complaints of widespread donation theft. The World Food Programme (WFP) did the same in May, subsequently cutting off all aid to Ethiopia in June.

More than 20 million Ethiopians, or roughly 16% of the country’s 120 million inhabitants, depend on food assistance as a result of ongoing droughts or regional conflicts that have forced 4.6 million people to escape their homes.

Related Topics:Ethiopia Featured Tigray USAID

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Musings From Abroad

World Bank doubts Ethiopia-IMF debt assessment

Published

14 hours ago

December 24, 2024

Ifeoluwa Dada

Some officials of the World Bank have questioned if the study supporting Ethiopia’s debt restructuring may be “faulty” after criticising an evaluation of the country’s finances done with the International Monetary Fund (IMF).

World Bank consultant, Brian Pinto, and its head economist, Indermit Gill, evaluated the July Debt Sustainability Analysis (DSA), which was created by the IMF and employees of the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries, in an internal document seen by Reuters.

According to the authors, Ethiopia is experiencing a short-term cash shortage rather than a long-term solvency problem, which is a source of conflict between the government and holders of its $1 billion international bond that is in default, based on the DSA.

“We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty,” Pinto and Gill wrote in the paper from earlier this month. “The disagreements about Ethiopia’s debt sustainability will be repeated as other countries become debt distressed.”

A World Bank representative responded to a question regarding the paper by saying, “We generally don’t comment on internal deliberations between the World Bank and the IMF or any of our partner institutions.”

As part of the most recent review of the Fund’s loan program, Ethiopian State Finance Minister Eyob Tekalign told Reuters that the DSA had just been reviewed by IMF and World Bank teams and that the status had not changed significantly.

Without providing further details, an IMF representative acknowledged that its officials travelled to Ethiopia in November for the second review of the Fund’s loan program and added that every review incorporates an update to the DSA. Regarding the memo, the spokeswoman remained silent.

A request for comment from Pinto and Gill was not answered. There has been a tense confrontation between Ethiopian officials and bondholders.

The main point of contention is whether, as bondholders contend, Ethiopia is experiencing a liquidity shortage that may be resolved by rescheduling debt or if it is experiencing longer-term financial issues that necessitate haircuts, or debt write-downs.

According to the DSA, certain statistics on exports indicated pressures on both liquidity and solvency.

It was reported in October that the DSA indicated a solvency problem and that writedowns were inevitable. Investors have criticised a government proposal that suggests an 18% haircut in addition to rejecting the evaluation.

Musings From Abroad

Swiss company Mercuria partners Zambia’s IDC in new metals trading firm

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

According to a statement released by Swiss commodities trader, Mercuria, on Thursday, it has established a metals trading arm with Zambia, the second-largest producer of copper in Africa.

The trading unit is jointly owned by Mercuria and an arm of Zambia’s Industrial Development Company (IDC), and its purpose is to allow Zambia to engage directly in the minerals trading market.

The joint venture “envisages the establishment of a vehicle to market and trade Zambian copper by mutual leverage,” according to a statement from Cornwell Muleya, the CEO of IDC.

The southern African nation wants to increase copper output to roughly 3 million metric tonnes within the next ten years, and in 2023, it produced roughly 698,000 tonnes of copper, down from 763,000 metric tonnes the year before.

In June, the Zambian government announced that it would establish a minerals trading unit.

Investors including First Quantum Minerals and Barrick Gold are ramping up production, with output set to receive a further boost once Vedanta Resources’ Konkola Copper Mines restart activity.

“Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market,” Kostas Bintas, Mercuria’s global head of metals and minerals, said in the statement.