Addis Abeba — Ethiopia is advancing debt restructuring negotiations with creditor nations in an effort to actual $3.5 billion in debt relief, Minister of Finance Ahmed Shide instructed lawmakers on Tuesday.
Addressing the Home of Folks’s Representatives during the presentation of the 2025/26 draft federal finances, the Minister stated the manager is nearing an agreement but has no longer yet finalized or signed any deal.
“We are in the final stages of negotiation with our creditor countries. The agreement will be signed soon,” Minister Ahmed is quoted by celebration-owned media as saying.
Then again, he cautioned that even with the expected restructuring, the actual funds Ethiopia will create on its exterior debt “will increase“, as the country prepares to resume repayments starting next one year below revised phrases.
Ethiopia is restructuring $12.4 billion in exterior debt below the G20’s Fashioned Framework, having joined the technique in 2021. The restructuring grew to develop into more pressing following the country’s default on its sole $1 billion Eurobond in December 2023.
In January this one year, the IMF Executive Board met to assess Ethiopia’s progress below its $3.4 billion Extended Credit ranking Facility (ECF). Whereas the IMF stopped in need of confirming an agreement in principle on debt restructuring at the time, it acknowledged that “key milestones” had been completed below the Fashioned Framework and authorised a 2nd disbursement of $250 million. The IMF praised Ethiopia’s reform power, including foreign commerce liberalization, and famed easing rigidity on parallel market commerce charges.
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By March 2025, Ethiopia’s Ministry of Finance announced that an agreement in principle had been reached with official creditors to restructure $8.4 billion of the country’s $12.4 billion exterior debt. The restructuring turned into as soon as expected to beef up the country’s bargaining space with deepest creditors, including bondholders.
In April 2025, Reuters reported that the official creditor committee, co-chaired by China and France, turned into as soon as cease to finalizing a deal that will give Ethiopia more time to repay its debt with out Ethiopia’s proposed 18% haircut, which turned into as soon as rejected by bondholders.
If concluded, the anticipated $3.5 billion debt relief marks a turning point in Ethiopia’s macroeconomic reform program, which began in July 2024. Below this understanding, the manager shifted from a crawling peg commerce price draw to a market-pushed regime, helping free up over $10.7 billion in promised exterior financing from the IMF, World Financial institution, and other partners.
Whereas the prompt debt relief affords fiscal breathing home, Minister Ahmed Shide pledged that Ethiopia’s compensation tasks will resume below the extended phrases.
