The International Monetary Fund announced on Friday the conclusion of the fourth review of its financial program with Ethiopia, a decision that will allow the disbursement of approximately $261 million to the Ethiopian government.
Awarded in 2024, the $3.4 billion loan program was intended to support an ambitious economic reform plan, including a thorough review of the country's external debt.
The program continues under strict monetary discipline, deemed necessary by the Fund to support disinflation. The IMF and Ethiopian government teams reached an agreement on this fourth review last month.
Meanwhile, the government in Addis Ababa announced it had reached a preliminary agreement with the holders of its sole $1 billion Eurobond regarding its restructuring. This agreement remains subject to approval by the IMF and bilateral creditors, but already represents a significant step toward restoring the sustainability of Ethiopian debt, the Fund indicated.
Ethiopia, which defaulted on its Eurobond two years ago, is conducting its restructuring negotiations within the framework of the G20 Common Framework, which requires equal treatment of all creditors. Last July, the country also finalized an agreement with its bilateral creditors, offering cash flow relief exceeding $3.5 billion.
