In a remarkable financial turnaround, Ethiopia has successfully reduced its foreign debt from $23 billion to $4.5 billion—an impressive decrease of over 80%. This significant achievement comes as a result of the government’s Homegrown Economic Reform Programme, which focuses on fostering domestic resources for economic growth rather than relying on foreign loans.
A substantial portion of the previous debt, approximately $13.7 billion, was owed to China, primarily for various infrastructure projects across the country. With this debt reduction, Ethiopia is setting a new course aimed at economic independence, signaling a shift towards a more sustainable economic model.
Despite this positive development, challenges remain. Inflation and the rising cost of living continue to pose difficulties for many citizens. However, the government’s reform initiative marks a pivotal step towards establishing a more resilient economy capable of thriving on domestic capabilities.
As Ethiopia moves forward, this debt reduction not only alleviates financial burdens but also enhances the nation’s prospects for growth and stability in the years to come. The focus will now be on leveraging local resources to sustain this momentum and improve the livelihoods of its citizens.
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