Addis Abeba– The International Monetary Fund (IMF) executive board is scheduled to meet on Friday, January 17, to deliberate Ethiopia’s second review under its $3.4 billion Extended Credit Facility (ECF) program. The meeting follows a staff-level agreement reached on November 27, 2024, which, if approved, would unlock over $250 million in funding for Ethiopia.
The latest review “doesn’t mention an agreement in principle between the government and its official creditors on a debt rework,” an individual familiar with the matter told Bloomberg. However, the IMF noted that “key milestones have been reached under the Common Framework process,” and its staff has determined sufficient progress to recommend approval of the review.
Ethiopia is currently restructuring its $12.4 billion external debt under the Group of 20’s Common Framework. The creditor committee, co-chaired by China and France, includes other nations such as Israel, Japan, and India.
The staff-level agreement was reached after an IMF mission to Addis Abeba from November 12 to 26, 2024, which assessed the country’s reform progress. “Implementation of Ethiopia’s homegrown economic reform program, including the adoption of a market-determined exchange rate, continues to advance well,” the IMF stated, adding that foreign exchange shortages had “eased substantially” and the gap between official and parallel market exchange rates had “again fallen below 10%.”
This comes after the successful completion of the first review of Ethiopia’s four-year ECF program. On October 18, 2024, the IMF board approved the first review, allowing Ethiopia to receive $340.7 million.
The IMF’s $3.4 billion loan package is part of a broader macroeconomic reform program launched by Ethiopia in late July 2024. The reforms marked a transition from a crawling peg exchange rate system to a market-based foreign currency regime.
Following the implementation of these reforms, Central Bank Governor Mamo Mihretu announced in an online statement that Ethiopia would secure $10.7 billion in external financing from the IMF, World Bank, and other creditors as part of the reform package. AS
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