The International Monetary Fund’s executive board completed the fourth review of Ethiopia’s ongoing financial program on Friday, the fund said in a statement, paving the way for a disbursement of around $261 million to the government.
Ethiopia secured the $3.4 billion lending program with the IMF in 2024 as part of a comprehensive economic reform package, which also includes an overhaul of its external debt.
“Maintaining reform momentum is essential to consolidate gains and support growth and poverty reduction in the medium term,” the IMF said. Staff of the fund and the Ethiopian government reached an agreement on the review last month, according to Reuters.
The IMF emphasized that maintaining tight monetary conditions remains critical to sustaining disinflation.
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Earlier this month, the government in Addis Ababa said it had reached a preliminary agreement with a group of bondholders on restructuring its sole $1 billion international bond.
The deal requires approval from the IMF and bilateral creditors. The IMF described the agreement as an important step toward restoring Ethiopia’s debt sustainability.
“IMF staff are assessing the consistency of the agreement with the objectives and parameters of the IMF-supported program,” said Julie Kozack, the Fund’s head of communications.
Ethiopia defaulted on its Eurobond two years ago after choosing to restructure its external debt under the G20’s Common Framework, which mandates similar treatment for all creditors in a restructuring.
In July 2025, the country formalized a restructuring deal with its bilateral creditors, providing more than $3.5 billion in cashflow relief.
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Image Credit: Reuters
