原文
ℹ️ Editor’s note: This story is part of Mariblock’s “State of Fiat” coverage. Digital assets such as bitcoin are seen as competitors to central bank money. Therefore, we consider informing our audience of the state of their local currencies worthwhile.
The World Bank has approved a $350 million finance package to support Ethiopia’s digital identity (ID) drive. The digital ID program — Fayda — introduced in 2022, has seen the enrollment of 3.5 million people in its pilot phase and is set for full rollout in 2024.
The details
- Per a World Bank press release, most of the funding comes under its Digital ID for Inclusion and Services project.
- As part of the finance package, $50 million is a grant for host communities and refugees under the bank’s International Development Association (IDA) window.
- The IDA typically provides grants and low-interest loans to 74 of the world’s poorest countries, 39 of which are in Africa.
- Other reports citing official documents claim that $214 million has already been earmarked for inclusive issuance and $68 million for Fayda’s technical infrastructure.
- $21 million and $35 million were allocated to building infrastructure and service delivery, respectively, while $12 million went to project management.
- The executive director of Ethiopia’s Fayda program, Yodahe Zemichael, said the World Bank’s disbursement is crucial to implementing the ID project, which has been in the pipeline for a while.
- The country hopes to improve its financial inclusion with the new digital ID. As part of the project, Ethiopian banks are set to mandate Fayda as the primary means of identification for financial transactions by 2024.
Key quote
“This finance will help us to roll out the digital ID project that we have been working on for a long time at the country level.”
Key background
- Ethiopia’s foreign reserves are depleted. The $350 million World Bank funding package adds to its growing debt portfolio, valued at $28.2 billion at the end of March.
- Last week, the country’s finance minister announced that Ethiopia would miss a scheduled Eurobond repayment due to insufficient foreign exchange to complete the payment.
- It is now working to secure an emergency relief package from the International Monetary Fund (IMF). While preliminary talks have been held, there is no agreement yet.
- The conflict-ravaged East African country recently secured a temporary waiver on its debt payments to Chinese creditors and an agreement in principle on further debt relief with its bilateral creditors.
- The World Bank’s funding for the Fayda project could prove pivotal, especially since the country’s extensive debt portfolio means it has less foreign exchange to meet local economic needs.