World Bank approves rural development credit

The World Bank has approved a US $274.72 million credit to Ethiopia to fund rural development projects, including improving electrification and road construction in the Horn of Africa country. Some $133.42 million would be used to enhance access to electricity in rural areas, $87.3 million for the construction of roads, while $54 million is earmarked to support other rural development programmes, the bank announced on Friday. The loans would be paid back within 40 years, following a 10-year period of grace. With a population of 77 million people, Ethiopia is one of sub-Saharan Africa's second most populous countries. It is ranked seventh among the world’s poorest countries. At least 10 percent of Ethiopia's annual budget comes from foreign aid disbursements. The World Bank and Britain in May decided to redirect some $385 million in direct budgetary support to education and health programmes for Ethiopia. Key aid donors to Ethiopian had in December 2005 suspended budgetary support to the Ethiopian government, a consequence of the violent suppression of opposition demonstrations organised in protest at the alleged rigging of parliamentary and local government elections in May 2005. See related story: Suspended funding redirected to poverty alleviation