Ethiopia’s financial program has undergone its fourth review by the IMF board
The executive board of the International Monetary Fund finalized its latest review of Ethiopia’s current financial program on Friday, as stated by the fund, a decision that will result in the disbursement of approximately $261 million to the government.
The East African nation finalized its $3.4 billion lending program with the IMF in 2024, as part of an extensive economic reforms package that also encompasses a comprehensive restructuring of its external debt.
The IMF stated, “It is crucial to sustain reform momentum in order to solidify achievements and foster growth and poverty alleviation in the medium term.” The fund’s staff and the government finalized an agreement on the review, the fourth under the program, last month.
It emphasized that keeping strict monetary conditions is crucial for supporting disinflation.
This month, the government in Addis Ababa announced that it had come to a preliminary agreement with a group of bondholders regarding the restructuring of its sole $1 billion international bond following negotiations. Approval from the IMF and bilateral creditors is necessary for the deal.
The initial agreement signifies a crucial advancement in Ethiopia’s efforts to achieve debt sustainability, according to the IMF on Thursday. “IMF staff are evaluating the alignment of the agreement with the goals and parameters of the IMF-supported program,” stated Julie Kozack, the Fund’s head of communications.
The East African nation defaulted on its Eurobond two years ago after choosing to restructure its external debt under the G20’s Common Framework initiative, which mandates equal treatment of all creditors during a restructuring process.
In July of the previous year, it finalized a restructuring agreement with its bilateral creditors aimed at delivering cash flow relief exceeding $3.5 billion.
