Hey fam, big news from Addis Ababa 📣! On Friday, the IMF executive board wrapped up the fourth review of Ethiopia's $3.4B lending program, unlocking around $261M to boost the nation's ongoing economic reforms.
This $3.4B deal, secured in 2024, is part of a broader package that includes overhauling external debt and tightening monetary policy to keep price rises in check. The IMF notes that keeping those tight money conditions is key to sustaining disinflation – aka easing inflation back down to healthier levels.
Meanwhile, Ethiopia also reached a preliminary agreement with bondholders on restructuring its sole $1B international bond. This initial deal, pending IMF and bilateral creditors' sign-off, marks a crucial step toward restoring the country's debt sustainability.
After the nation defaulted on its Eurobond in 2022 under the G20's Common Framework, July last year brought a restructuring deal with bilateral creditors, delivering over $3.5B in cash-flow relief. Now, IMF staff are assessing the new bond deal to ensure it lines up with the program's goals and parameters.
With these moves, Ethiopia is aiming to lock in reform momentum, support growth, and reduce poverty in the medium term 🌱.
Reference(s):
IMF board completes fourth review of Ethiopia's financial program
cgtn.com
