The International Monetary Fund (IMF) has approved the first review of Ethiopia’s $3.4 billion lending program, clearing the way for the disbursement of $340.7 million. The decision, announced by the IMF on Friday, marks a significant step forward for the East African nation as it continues to navigate economic reforms and debt restructuring efforts.
Ethiopia secured the four-year financing program in July after implementing key reforms, including floating its currency, the birr, and taking steps to restructure its national debt. These efforts have been crucial in keeping the country’s economic recovery on track.
In late September, both Ethiopia and the IMF reached a staff-level agreement on the first review of the program. That agreement was then submitted to the IMF’s executive board for final approval, leading to this latest disbursement.
One of the central aims of Ethiopia’s government is to make “tangible progress” on its debt restructuring by December. However, the nation faces challenges as investors in its $1 billion Eurobond have rejected a proposed 18% writedown.
To closely monitor the impact of the country’s reforms, particularly in the area of foreign exchange management, the IMF has scheduled an accelerated review process for Ethiopia’s program. This fast-tracked approach underscores the importance of continuous oversight as the nation works through the complexities of its economic overhaul.
