INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PUBLIC EXTERNAL DEBT OF ETHIOPIA

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized This report is not to be published nor may it be quoted as representing the Bank's views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PUBLIC EXTERNAL DEBT OF ETHIOPIA October 5, 1950 No. E 107 ;, I,, Economic Department Prepared by: Andrew C. Huang

2 Pu:BtIO EXTER.i.141 DEBT OF ETHIOPIA Table of Contents I. Debt Outstanding II. Service Payments. Page 1 2 Annex Table 1 - The Public External Debt of Ethiopia, September Annex Table 2 - Estimated Interest and Amortization Pa3lnents on the External Debt of Ethiopia,

3 PUBLIC EXTEIUIAL DE:BT OF ETmOPIA 1. Debt Outstanding As of September 1950 Ethiopia has external loans outstanding or authorized in the amount of $11.6 million. Nearly 90%. or about $10.2 million, repre. sents U.S. dollar credits. The balance is made up of a ~~dish Government loan now outstanding in the amount of $1.4 million. The principal components of the obligations of $12 million 11 are shown in detail in Annex Table 1 and are summarized as follows: Export-Import Bank loan SUrplus Property credit I:BRD loan Swed:ish loan (in Grand total Amou.."1t thousands of U.S.$) $ 3, , $ The % Export-Import Batik credit of $3 million is repayable in equal semi-annual installments over 5t years beginning in June As of August 31, 1950, $1,850,000 of the total still remained undisbursed - including an allocation of $1 million by the ErB in June, 1950 for the purchase of air transport equipment. The credits expire at the end of rropert'[ U.S. surplusacredits to Ethiopia aggregate $ The loan bears ~n interest rate of 2-3/8%. Up to Harch 1950 about $194,000 of the principal amount had been repaid. chiefly in local currency spent on work done on U.S. property in Ethiopia. The balance of $ is likely to be repaid by the end of On September 1), 1950, Ethiopia obtained t'll10 loans totalling $7 million from the IBRD, one for $5 million for the development of the country's roads, the other for $2 million for the foreign exchange costs of projects to be financed by a ne'i'l Ethiopian development bank. Both loans mature in 20 years and carry interest at 35b u1us 1% commission. Principal repayments start in Up to the end of September 1950 none of these credits had been disbursed.!.i Excluding: a) b) Lend-lease silver loan of $ Other lend-lease loaneof $200,000.

4 - 2 - The SWedish debt of SKr 7.5 million (U.S. $1.4 million) originated from two separate Swedish Government loans. one in 1945 and the other in 1946 in the amounts of SKr 5 million and 2.5 million respectively. The interest payable is 3.5~ on the first loan and 3% on the second. The princi~l remaining amount is to be repaid in 1950 and II. Service Payments Projected service charges on the funded external debt of Ethiopia throughout 1970 are sho1'ul in detail in Annex Table 2 on the assumption that the undisbursed portion of the EIB credit '"ill be dra1'ffi in full before it ex)ires at the end of Projected Service Paym~nts on the External Debt of Ethio)2ia (in millions of U.S. dollars) Total Total Tota.l Service Payments Credits Ou.t- Amorti- Service by Currencies ~ standillg zation Interest Payments U.S.~ Debts SKr Debt II< ) Annual principal repayments approximate $1 million during and average $500,000 from Interest charges 1.1ill be about $100,000 in 1950; and they will amount to $400,000 in 1951 and thereafter decline to $200,000 in Total service payments average $1.4 million during Beginning in 1952 they will decline from about $900,000 to $600,000 in Interest and principal payments in S"Tedish kronor account for almost 50~ of the total during since the Swedish loans mature in 1950 and Tr~reafter the entire debt \,lil1 be serviced in U. S, cutrency, * As of 1/1/50 excluding the IBRD loan of $7 million.

5 Annex table 1: THE PUBLIC EXTERNAL DEBT OF :'THIOPIA, S':';PTElJBER 1950>( (In thousands of U.S. dollars) Item Net BJ.llount Authorized Outstanding Remarks A. B. U.S. dollar debt Export-Import Bank Loan #405, 3%, ,000 3,00011 Payable semi-annualj.y in 5 1/2 years from 6/30/51. Surplus property credit, 2 378% , I.B.R.D. Loan 4%, ,000 Y 7,000 Y Payable in 20 years from Total U.S. dollar debt 10,42]. 10,233 Swedish krona debt Swedish loan 3-3 1/2%, , , Interest payable at 3 1/2% on the first SKr 5 million and 3% on the balance. Aruortization in five years from Grand total 11,870 11,60,3 * Excluding the fol101l'd.ng loans: a) Silver loan of ~3,858,000. The loan is interest-free and payable in kind within 5-7 years after the U.S, declaration of the end of the state of emergency. b) A lend-lease credit of :;l200,000. y. ~;1.85 million of this amount unutilized as of August ]I None of this amount has been disbursed up to 9/30/50. ]I SKr 7.5 million converted at Gl = SKr fi SKr 7.1 million converted at :::>1 = SKr 5.18.

6 Anne::-: table 2: ESTHIATED HJTEREST iu'id Al-10RTlZATION PAYMENTS Olil THZl EXT:illNAL DEBT OF ETliIOPIA, 19) Yeal" (Expressed in thousqnds of U.S. dollars).... Page_l Exuort-Import Batik Surplus property I.B.R.D. loans Amount outstanding (12/31/49) Amotmt undisbursed1f(12!31/49).. Amount Service payments Amount Service payments Amount Serv1ce payments l~ount Serv1ce payments of Amorti- In- of Amort i- In- of' Amort i- In- of Amort i- Indebt zation terest Total debt zation ter.e_s_t._ Total debt ) za ti. Oll }i~rest_ Total debt zation terest Total , , , , , , , , , , , , , , , , , , , , , , , See footnotes at end of table.

7 Annex table 2: ESTII ratiid IHTEIUJST AND ANORTIZATIOn PAYM:::::UTS ON TIrE JJXTJRNAL DEBT OF ~THIOPIA, Continued (Expressed in thousands of U.S. dollars) Page 2 Total dollar debt 11 Swedish lerona debt Grand total 11 Year Amount Service na~ents.amount Service ~ayments Amount Service paments of Amort i- In- Total of Amort i- In- Total of Amort i- In- Total debt zation terest debt zation tercst debt zation terest ,410':!./ , ,7808:1 1,095 III 1, , ,685 1, , , , , , , , , , ,117 7, , , , , , , , , , , , , , , , , , , , , , , , , , !I As of 8/.31/50 the undisbursed amount stood at $1,850,000 of hich $1 million was allocated for the purchase of transport facilities. The balance is to expire on December 31, gf As of 3/.31/50 the amount outstanding was reduced to $233,000. Jl Does not include: ~ a. Lend Lease Silver Loan of $3, b. Other Lend Lease loans of $200,000. As of 1/1/50 excludes the IBRD loans of $7 million.