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· The Biden Administration is mulling economic sanctions against Ethiopia, according to some reports appearing in the international media
· If sanctions are imposed, that could impact financing from the U.S. and accessing loans from international financial institutions
· Experts say that the U.S. sanctions being considered will mainly affect financing to support Ethiopia’s budget
· Also, fund flows from World Bank and the IMF might get affected once the sanction is imposed.
The Biden Administration is mulling economic sanctions against Ethiopia, according to some reports appearing in the international media. If sanctions are imposed, that could impact financing from the U.S. and accessing loans from international financial institutions. The continuing conflict in Ethiopia’s northern Tigray region is said to be the trigger for the sanctions. Amidst the pandemic, the East African country might have to undergo a harrowing experience if sanctions are imposed.
Ethiopia is the biggest recipient in Africa of U.S. foreign aid, drawing about US$1 billion last year. Ethiopia and the US have been longtime allies. The economic sanctions, if imposed, may considerably erode the bilateral partnership and diplomatic relations. The two countries were partners in the fight against Islamist extremism in the Horn of Africa. The sanctions would add pressure to Ethiopia’s state finances as the government works to offset the impact of the coronavirus pandemic .
There is no immediate reaction from the Ethiopian government. Experts say that the U.S. sanctions being considered will mainly affect financing to support Ethiopia’s budget. Also, fund flows from the World Bank and the IMF might get affected once the sanction is imposed. Reports say that sanctions are considered based on the inept handling of the war in the Tigray and the involvement of troops from neighboring Eritrea. Last week, U.S. Secretary of State Antony Blinken expressed concern about increasing obstacles to humanitarian aid in Tigray.
As reported by www.trendsnafrica.com several times earlier, violence engulfed Tigray in November, when federal troops attacked soldiers loyal to the state’s dissident ruling party. The unrest has left thousands of people dead and displaced hundreds of thousands more. The U.S. financial sanctions are expected to be preceded by visa restrictions on perpetrators of human-rights abuses in Tigray. www.trendsnafrica.com carried a story yesterday in this regard.
Ethiopia signed a US $907 million funding agreement with the World Bank in April . In February this year, the government and the IMF reached a staff level agreement for the first and second review of extended credit facilities.
