Ethiopia has expressed optimism that international creditors would restructure its sovereign debt as negotiation with them reaches the final stage.
Speaking to the media over the weekend, finance minister, Ahmed Shide said the negotiation with the International Monetary Fund (IMF) to restructure Ethiopia’s external debt is nearing completion.
“We are in the final stage of negotiations with the IMF in terms of debt restructuring and Ethiopia expects IMF’s and other creditors to restructure the country’s external debt.
Ethiopia is currently restructuring its external debt through the G20 Common Framework for Debt Treatments. Under the Common Framework, the IMF determines what level the debt should be reduced to.
The International Monetary Fund (IMF) Managing Director Kristalina Georgieva, who concluded her two-day visit to Ethiopia on Saturday, on her part described Ethiopia’s debt restructuring process as being in the “final stretch” of completion and said “It’s on the top of my priority list.”
The IMF assessed that in 2023 the present value of Ethiopia’s external government debt was 204% of exports, and estimated it would rise to 220% by 2025. If the debt was being paid in full, external debt service in 2025 would be 26.3% of revenue and 24.7% of exports. External debt service was expected to stay above 17% of exports until 2030, based on pre-restructuring payment schedules, and be only just below the threshold of 10% from 2031 to 2034
Ethiopia has been closely working with international financial institutions to succeed with its national macroeconomic reform launched in July last year.
Georgieva praised Ethiopia’s macroeconomic reform as “rewarding,”
Following a full fledged implementation of a macroeconomic reform, the east African nation has secured a USD3.4 billion financing agreement with the IMF, aiming to stabilise its economy and regain financial credibility.
MG/as/APA