Ethiopia First Sustainable and Inclusive Growth Development Policy Operation

This Development Policy Operation (DPO) is the first in a programmatic series of two operations to support the Government of Ethiopia’s efforts to: (i) advance financial sector restructuring and trade liberalization, (ii) promote fiscal sustainability and transparency, and (iii) enhance social resilience and climate action. It comprises an International Development Association (IDA) grant in the amount of SDR 760.3 million (US$1,000 million equivalent) and an IDA credit in the amount of SDR 380.2 million (US$500 million equivalent). The DPO series supports reforms that help to address market distortions and constraints undermining macroeconomic stability and inclusive private-sector-led growth. This DPO series is part of a broader stabilization program that includes a four-year International Monetary Fund (IMF) Extended Credit Facility (ECF) program and expected debt treatment from the G20 Common Framework. The stabilization program supports the liberalization of the foreign exchange (FX) market and complementary measures to reduce financial and fiscal risks, promote trade, mobilize revenues, and expand social safety nets to mitigate the effects of the adjustment on the poor. This DPO is aligned with a forthcoming World Bank Country Partnership Framework for Ethiopia (CPF, FY2025-30) and the 2024 Ethiopia Country Climate and Development Report (CCDR).