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News: IMF, Ethiopia agree on a US$2.9 B financing package

Kristalina Georgieva, IMF managing Director, (3rd from left), pictured in October this year with Amb. Fitsum Arega (1st from left), NBE President Yinager Dessie (2nd from left) and Finance Minister Ahmed Shide. Photo: Archive

Addis Abeba, December 11/2018 – In a statement issued today by the International Monetary Fund (IMF), the IMF said the Ethiopian government and the IMF staff team “reached preliminary agreement,” subject to approval by the Fund’s Executive Board, on policies that could constitute the basis for Ethiopia’s new program supported by the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements. “The overall objective of the program would be to support implementation of the authorities’ Homegrown Economic Reform Program.”

An IMF staff team led by Ms. Sonali Jain-Chandra visited Addis Abeba from October 29 to November 8, 2019 to hold discussions on the 2019 Article IV Consultation for Ethiopia, and the authorities’ request for a three-year US$2.9 billion (SDR 2.1049 billion) financing package that could be supported by the IMF under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF). Discussions with the authorities continued after the mission.

The Fund-supported program would consist of five main pillars: IMF said, they are: durably address the foreign exchange shortage and transition to a more flexible exchange rate regime; strengthen oversight and management of state-owned enterprises to contain debt vulnerabilities; strengthen domestic revenue mobilization and expenditure efficiency to create space for adequate poverty-reducing and essential infrastructure spending; reform the financial sector to support private investment and modernize the monetary policy framework; and strengthen the supervisory framework and financial safety nets.

“We will submit the program request to the Executive Board for its consideration,” the statement said. AS/IMF dispatch.

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