Ethiopia’s ongoing discussions with the International Monetary Fund and the World Bank may lead to $10.5 billion of funding, Prime Minister Abiy Ahmed said, according to a Bloomberg report on Thursday.
“We have been negotiating with the IMF and World Bank on a wide range of issues,” Abiy told lawmakers in the capital, Addis Ababa, on Thursday. “When this process comes to a successful conclusion, and the reform is approved, we will receive $10.5 billion in the coming years.”
Ethiopia defaulted on its debt in December, after failing to pay a $33 million coupon on a $1 billion eurobond that matures at the end of this year. It’s in talks with the IMF about a bailout program that’s key to restructuring its external loans, which stood at $28.5 billion at the end of 2023.
The nation’s $1 billion dollar bond, which matures in November, rose 0.2% to 72.71 cents on the dollar — the highest in almost three months, according to data compiled by Bloomberg.
Members of the Paris Club, the informal group of mostly rich country creditors, said this week that its members provided Ethiopia with about $500 million in temporary debt relief since they agreed a standstill in November last year. That deal expires at the end of 2024, it said at the time.
The group’s secretariat is “hopeful” that the government will agree a program this year, it said in the Paris Club’s annual report published this week.
China, which co-chairs Ethiopia’s official creditor committee with France and is not a member of the Paris Club, had struck a bilateral deal with the government to suspend debt payments.
Ethiopia’s discussions with the multilateral lenders are currently focused on the timing of the implementation of reforms by the government, Abiy said.
“There are areas we think should be reformed now, and there are things we believe should be delayed,” he said. “If all these suggestions get accepted and we agree, there is an opportunity ahead of us. This reform agenda will play a huge impact in alleviating the debt burden on the country.”