The International Monetary Fund announced on Wednesday that it had reached a staff-level agreement with Ethiopia on the fourth review of a $3.4 billion lending programme, setting the stage for a $261 million disbursement once the Fund’s board approves it.
This payment would raise the IMF’s total financial support to Ethiopia under the extended credit facility to about $2.13 billion. Ethiopia secured the bailout loan in July 2024 amid efforts to restructure its debts, Reuters reported.
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“Maintaining reform momentum will be key to consolidating macroeconomic stability and supporting growth and poverty reduction in the medium term,” the IMF said in its review, while recommending a tight monetary stance and encouraging private investment.
The executive board must endorse the agreement before the next tranche can be released.
Ethiopia opted to restructure its external debt under the G20’s Common Framework initiative and defaulted on its only Eurobond in late 2023.
The country has since reached agreements with bilateral creditors, but negotiations over the size of a potential debt writedown have slowed progress on restructuring its $1 billion Eurobond.
On the broader process, the IMF noted that efforts to secure debt treatment and restore debt sustainability were continuing.
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Image Credit: Reuters
