Ethiopia signs $1.3 bln loan and grant agreement with World Bank

The World Bank on Friday signed a $1.3 billion loan and grant agreement with Ethiopia to improve governance and fund an anti-poverty package that provides financial relief for people facing food shortages.

The bank said a loan of $700 million would be used to “improve equitable access to basic services and strengthen accountability” in education, health, agriculture and other sectors.

The remaining $600 million was a grant to finance the Horn of Africa country’s “Rural Productive Safety Net” scheme, which is handing out cash or food to 8 million people in exchange for participation in public development projects, a statement said.

An additional 8.5 million people in Ethiopia are currently in need of emergency food aid owing to severe drought.

In June, the government and humanitarian groups warned that Ethiopia would run out of relief food for 7.8 million people hit by the drought, which has also affected Kenya and Somalia.

The failure of successive rainy seasons, blamed by meteorologists on fluctuations in ocean temperatures known as the Indian Ocean Dipole (IOD), has created a series of severe back-to-back droughts in the Horn of Africa region.