A US government agency has delayed the disbursement of a $500million (Sh53.97 billion) loan to finance the entry of a Safaricom-led consortium into the Ethiopian telecoms market, citing uncertainty over the ongoing unrest in the country’s Tigray region.
The US International Development Finance Corporation (DFC) said it was still weighing the escalation of armed conflict in the horn of Africa nation before it could release the loan.
The financing had earlier been thrown into doubt after the US State financier threatened to recall the loan following allegations of acts of violence against civilians in Tigray.
“DFC is working closely with its partner agencies in the US government to monitor the situation in Tigray and will carefully consider its impact on any potential financing of the Vodafone consortium,” the US State agency told the Business Daily in an e-mail response.
US Secretary of State Antony Blinken, who is the DFC Board chair, has said the current environment in Ethiopia is marked by “credible reports of armed forces…committing acts of violence against civilians, including gender-based violence and other human rights abuses and atrocities.”
“The Secretary of State has made a legal determination that the Government of Ethiopia has engaged in a pattern of gross violations of human rights and the [US] President has issued an executive order imposing sanctions on persons with respect to the humanitarian and human rights crisis in Ethiopia,” DFC said.
The deepening conflict in Ethiopia could force DFC to pause the investment and push the telecoms companies to source the cash elsewhere and at a greater cost. The Safaricom consortium had agreed to take the Sh53.9 billion loan from DFC to help with acquisition and development costs.
An air and ground offensive by Ethiopian troops and their allies against rebellious forces from the northern Tigray region is intensifying, reports said.
An executive order signed last month by US President Joe Biden seeks to slap harsh sanctions on all sides involved in the war in the Tigray region — including the governments of Ethiopia and Eritrea.
The sweeping order prompted swift pushback from Ethiopian Prime Minister Abiy Ahmed, who accused the United States of putting on “unwarranted pressure, characterized by double standards”
“As a long-time friend, strategically and partner in security, the United States’ recent policy against my country comes not only as a surprise to our proud nation but evidently surpasses humanitarian concerns,” wrote Mr Ahmed in an open letter to Mr Biden.The war is threatening the […]