New Ethiopian cabinet gears up for next economic plan

Subject

Ethiopia's new government line-up.

Significance

Following his re-election for a five-year term in early October, Prime Minister Hailemariam Desalegn announced a cabinet reshuffle. The changes come amid final preparations for the second phase of the Growth and Transformation Plan (GTP II), an ambitious development strategy that seeks to turn Ethiopia into a middle-income country by 2025.

Impacts

• Ethiopia is likely to issue a new euro-bond to mobilise additional funds for GTP II.
• Sovereign debt levels are manageable, but off-budget loans to state enterprises may cause future distress.
• Low oil prices are beneficial for managing balance-of-payments and foreign-exchange strains.