International Monetary Fund (IMF) Staff Conclude Article IV Discussions and Reach Staff-Level Agreement on the Third Review of the Extended Credit Facility for Ethiopia
IMF staff and the Ethiopian authorities have reached staff-level agreement on economic policies to conclude the third review of the four-year US$3.4 billion Extended Credit Facility arrangement. Once approved by the IMF Executive Board, Ethiopia will gain access to about US$260 million in financing.
Ethiopia's macroeconomic performance has exceeded program expectations, with better-than-forecast results for inflation, export growth, and international reserves.
Maintaining reform momentum remains essential for consolidating recent gains, correcting macroeconomics imbalances, restoring external debt sustainability, laying the foundations for high, private sector-led growth, and ensuring the success of Ethiopia's homegrown reform agenda.
A staff team from the International Monetary Fund (IMF) led by Mr. Alvaro Piris, visited Addis Ababa from April 3 to 17, 2025, to discuss the 2025 Article IV consultation and the third review under the Extended Credit Facility (ECF). Discussions continued at the Spring Meetings in Washington DC, April 21-28, and subsequently. The ECF arrangement was approved by the IMF Executive Board on July 29, 2024, for a total amount of US$3.4 billion (SDR 2.556 billion). Subject to approval by the IMF Executive Board, the third review will make available about US$260 million (SDR191.7 million), bringing total IMF financial support under the ECF arrangement so far to about US$1,849 million (SDR1,406.4 million).
Today, Mr Piris issued the following statement:
'The IMF staff team and the Ethiopian authorities have reached staff-level agreement on the third review of Ethiopia's economic program under the ECF arrangement. The agreement is subject to the approval of IMF management and the Executive Board in the coming weeks. A memorandum of understanding with official creditors is expected to be agreed ahead of the IMF Board's consideration of the third review.
'The authorities' policy actions in the first year of the program have yielded strong results. The transition to a flexible exchange rate regime has proceeded with little disruption. Measures to modernize monetary policy, mobilize domestic revenues, enhance social safety nets, strengthen state-owned enterprises, and anchor financial stability continue to show encouraging results. Macroeconomic indicators have performed better than expected, with substantially better outcomes than forecast for inflation, goods exports, and international reserves.
'Recent policy action should help deepen the FX market and tackle remaining distortions. While real exchange misalignment has been corrected and FX availability has improved from a year ago, the spread between the official and parallel market widened again in early 2025 and high fees and commissions persist. Actions that are being rolled out to enhance transparency, reduce costs, ease restrictions on current account transactions, and strengthen prudential regulation will help to improve the functioning of the FX market.
'Maintaining reform momentum will be key to consolidating gains and securing sustainable high growth. Continued tight monetary and financial conditions will be important for managing inflation and exchange rate expectations. Further revenue mobilization is needed to provide sustainable financing for critical development spending. Reforms to improve the business environment, ensure fair taxation practices, encourage foreign direct investment, and facilitate open dialogue with business will be important to secure private sector investment. Efforts to end the remaining elements of financial repression and develop the capital market will help to mobilize savings and support the efficient allocation of capital.
'The staff team is grateful to the authorities for the excellent policy discussions and their strong commitment to the success of the IMF-supported economic program. The team met with Minister of Finance Ahmed Shide, Governor of the National Bank of Ethiopia Mamo Mihretu, State Minister of Finance Eyob Tekalign, and other senior officials. Staff also had productive discussions with representatives of banks and businesses that are operating in a range of sectors and representatives of civil society.'
Distributed by APO Group on behalf of International Monetary Fund (IMF).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
11 hours ago
- Gulf Today
China rolls over $3.4 billion of commercial loans to Pakistan
China has rolled over $3.4 billion in loans to Islamabad, which together with other recent commercial and multilateral lending will boost Pakistan's foreign exchange reserves to $14 billion, a finance ministry source said on Sunday. Beijing rolled over $2.1 billion, which has been in Pakistan's central bank's reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago, the source said. Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, he said. 'This brings our reserves in line with the IMF target,' he said. The loans, especially the Chinese ones, are critical to shoring up Pakistan's low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30. Pakistani authorities say that the country's economy has stabilised through ongoing reforms under a $7 billion IMF bailout. Few days earlier, the Asian Development Bank (ADB) has approved a $800 million financing programme to support Pakistan's fiscal sustainability and strengthen its public financial management systems, the Associated Press of Pakistan (APP) reported, citing a press release issued by the ADB. The initiative, titled the 'Improved Resource Mobilisation and Utilisation Reform Programme - Subprogramme 2,' includes a $300 million policy-based loan and ADB's first-ever policy-based guarantee of up to $500 million. Agencies
UAE Moments
15 hours ago
- UAE Moments
UAE Welcomes Peace Deal Between DRC and Rwanda
The United Arab Emirates has officially welcomed the signing of a landmark peace agreement between the Democratic Republic of the Congo (DRC) and Rwanda, describing it as a vital move toward long-term peace and stability across Africa. According to WAM, the UAE's state news agency, the deal — brokered by the United States and signed on Friday in Washington — aims to bring an end to a violent three-decade-long conflict in eastern DRC. The region has recently seen an escalation in fighting after M23 rebels, allegedly backed by Rwanda, seized strategic cities including Goma and Bukavu. 'A Positive and Constructive Achievement' Sheikh Shakhbout bin Nahyan Al Nahyan, UAE Minister of State, praised the efforts of US President Donald Trump and Sheikh Tamim, Amir of Qatar, for facilitating the agreement. He noted that the breakthrough aligns with the ongoing African Union mediation efforts and builds on outcomes from the joint summit of the Southern African Development Community (SADC) and East African Community (EAC). 'This international cooperation reflects the significance of collective action in addressing regional issues,' Sheikh Shakhbout said, adding that 'the UAE supports any efforts that contribute to enhancing security, peace and sustainable development on the continent.' He also reiterated the UAE's strong diplomatic ties with African nations, including both the DRC and Rwanda, highlighting the Emirates' continued commitment to the region's stability and progress. What's Behind the Conflict? The decades-long tensions between the two nations have largely stemmed from competition over eastern Congo's vast mineral wealth, with clashes involving numerous armed groups and external influences. The new deal signals a major turning point — though experts say sustained diplomacy and implementation will be key. With backing from global and regional leaders, and endorsement from nations like the UAE, many are hopeful this peace agreement will mark the start of a more secure and prosperous future for Central Africa.
Khaleej Times
15 hours ago
- Khaleej Times
China rolls over $3.4 billion of commercial loans to Pakistan, says source
China has rolled over $3.4 billion in loans to Islamabad, which together with other recent commercial and multilateral lending will boost Pakistan's foreign exchange reserves to $14 billion, a finance ministry source said on Sunday. Beijing rolled over $2.1 billion, which has been in Pakistan's central bank's reserves for the last three years, and refinanced another $1.3 billion commercial loan, which Islamabad had paid back two months ago, the source said. Another $1 billion from Middle Eastern commercial banks and $500 million from multilateral financing have also been received, he said. "This brings our reserves in line with the IMF target," he said. The loans, especially the Chinese ones, are critical to shoring up Pakistan's low foreign reserves, which the IMF required to be over $14 billion at the end of the current fiscal year on June 30. Pakistani authorities say that the country's economy has stabilised through ongoing reforms under a $7 billion IMF bailout.
