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Ethiopia's economy is highly dependent on external assistance and borrowing. The income thus obtained is very important, especially in the financial sector.

Ethiopia's economy is highly dependent on external assistance and borrowing. The income thus obtained is very important, especially in the financial sector.

Ethiopia's debt has increased steadily in the 1990s, reaching 10.4 billion U.S. dollars and constituting 84% of the GNP. This burden has been lightened by two significant measures: Russia cancelled a debt of 4.8 billion U.S. dollar owed by Ethiopia, and Paris club and other creditors relieved Ethiopia of some of her debt, and by the year 2000/01 her foreign debt had been reduced to 5.3 billion. Besides, the World Bank and IMF?s Highly Indebted Poor Countries (HIPC) Initiative has accepted Ethiopia as eligible for debt relief.