IMF, Ethiopia to extend aid talks in Washington later this month
Ethiopia and the International Monetary Fund will continue talks later this month about a bailout program that would help clear the way for the country to restructure its debts.
A two-week visit to Ethiopia by IMF staff “made substantial progress towards establishing how the IMF could support the authorities’ economic program,” Mission Chief Alvaro Piris said in a statement Tuesday. He added that talks would continue during the IMF Spring Meetings in Washington, which start April 15.
Ethiopia defaulted in December, after failing to pay a $33 million coupon on a $1 billion eurobond that matures at the end of the year. Ethiopia’s official creditors in November set a four-month deadline for the government to reach a preliminary deal with the fund, failing which they threatened to nullify a debt-servicing suspension deal.
An IMF program could also help unlock billions of dollars in concessional financing from other sources, including the World Bank and African Development Bank,
The Horn of Africa nation has been trying to rework its liabilities since 2021 as a civil war in the northern Tigray region soured investor sentiment and sapped economic growth. The government applied to renegotiate its obligations under a Group of 20 initiative known as the Common Framework, set up more than three years ago to help poorer countries overhaul loans with sovereigns, bondholders and commercial lenders.
While Ethiopia hasn’t said how much of its liabilities it wants to rework, public sector external debt totaled $27.8 billion at the end of September, according to data from the Finance Ministry.
