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Forced to bridge 400 million dollars in budget
deficit, the International Monetary Fund (IMF) is
closing shop in 30 countries across the world,
including in Addis Abeba, some sources disclosed.
However, it will only be IMF’s office here that is
due to be closed in Africa.
The news was delivered to the resident
representative, Arnim Schwidrowski, three weeks ago,
through a video conferencing, according to these
sources. Mr. Schwidrowski was not available for
comment because he has left for Washington D.C.
Ethiopia is a founding member of the IMF, an
international finance organization incorporating
185 countries created in 1945, together with the
World Bank. These two organizations were known as
Bretton Woods Institutions. Unlike its sister
organization which engages in development and
poverty reduction projects, the IMF focuses on
macro-economic stability and the finance sector.
Housed for many years in the same building where the
World Bank is found, Werbek Building, in Africa
Avenue, the IMF has maintained its office in Addis
Abeba since it was re-opened in June 1993, following
the fall of the military government in 1991.
Its latest office, located in Heritage Plaza, on
Cameroon Road (in front of Bole International
Hotel),has maintained a modest staff of an average
six and has provided technical assistance to the
Ethiopian government, in areas of macro-economic
management. It has also conducted surveys of the
finance sector.
“We no longer have a program with them,” said a
government official.
After having suspended programmes to Ethiopia in
the early 1980s for a decade, the IMF began its
re-engagement with the Ethiopian government with
its unpopular Structural Adjustment Facility, worth
49.4 million dollars. This was followed by a
three-year Extended Structural Adjustment Facility (ESAF);
although the total programme was designed to provide
Ethiopia with 88.4 million dollars, the total amount
provided was only 29.4 million dollars divided into
two disbursements. In 2001, the IMF signed an
agreement of 148 million dollars with Ethiopia, in
order to implement a two-phase programme on Poverty
Reduction and Growth Facility (PDGF). This came to
an end in 2007.
IMF claims modest success from its programmes in
Ethiopia, including in its contribution to boosting
the country’s international reserve from a little
over 200 million dollars in the early 1990s to over
1.2 dollars this year; average tariff reduction went
from 230pc during the Derg time to 35pc now. It
attempted to persuade the government to create a
competitive environment in the local finance sector
as well as to introduce a market-oriented foreign
exchange market.
IMF has claimed the reputation during its years in
Ethiopia for pushing the Ethiopian government to
liberalize the financial sector, and allow foreign
interests to participate in equity contribution.
This was one of the demands that put the Fund at
odds with the government, for it was a demand never
met by the latter.
There has not been any further programme since the
end of PDGF, although consultations were held under
Article IV. A government official disclosed that the
IMF’s decision to close its office here has yet to
be officially communicated to the government.
Sources, however, told Fortune that senior
government officials have been informed of the
decision by the Resident Representative.
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