Economic Update: Ethiopia’s Debt Restructuring Efforts
Ahmed Shidi, Ethiopia’s Minister of Finance, announced on Sunday that the nation is in the “final stage” of negotiations with its creditors as part of a comprehensive debt restructuring strategy. These discussions are a crucial component of Ethiopia’s initiative under the G20 framework aimed at managing its sovereign debt.
Although efforts are underway to realign its financial obligations, progress in talks with creditors has been gradual. Ethiopia is facing significant challenges in servicing its substantial debts, having defaulted on international bond payments amounting to one billion dollars in 2023.
At a joint press conference held in the capital city of Addis Ababa, Minister Shidi reaffirmed, “We are in the final stage of negotiations on debt restructuring,” and indicated that completion of this process is expected soon.
By the end of June, Ethiopia’s external debt had reached approximately $28.9 billion, with around 50% owed to multilateral institutions, including the International Monetary Fund (IMF), the World Bank, and the African Development Bank.
Imfb President Kristalina Georgieva highlighted the significance of this process, stating, “It is at the top of my priority list,” underscoring the need for swift resolution in restructuring Ethiopia’s debt.
In July, Ethiopia secured a new financing arrangement with the IMF, totaling $3.4 billion, aimed at bolstering its economic stability and facilitating the debt restructuring process.