APA-Addis Ababa (Ethiopia) Ethiopia has been downgraded to “default” from near default on international government bond after it failed to make $33 million coupon payment, according to Fitch Rating.
The east African nation downgraded to “defaults” after failing to make a payment to its creditors even after the end of its “grace period.”
The payment was due on December 11, but Ethiopia was granted a 14-day “grace period,” which ended this Tuesday.
Negotiations with the creditors, the details of which were unspecified, had been ongoing but eventually broke down.
S&P Global Credit Rating Agency downgraded Ethiopia’s rating to “default” on December 15 due to the country’s failure to make the payment on December 11.
Ethiopia now officially joins Ghana and Zambia as the third country on the continent to default.
This comes amidst claims by the Ethiopian government that it raised $24 billion in foreign currency revenue in the last fiscal year, a figure it claims to be higher than before.
Earlier this week, Ahmed Shide, Ethiopia’s Minister for Finance, had an interview with journalists in the capital Addis Ababa. He stated that Ethiopia is not currently making the payment not because it is unable to afford the amount but because the government is contesting some practices related to debt payment.
The government has been engaged in negotiations with the IMF and World Bank for several months now, although the outcome remains unknown.
MG/abj/APA