Ethiopia expects preliminary deal on IMF review in days: finance minister
Ethiopia in March reached a draft agreement with its official creditors on restructuring $8.4bn (R156.98bn) of debt, but has been locked in a standoff with its bondholders. Bondholders and Ethiopia are at odds over whether the country is facing a liquidity issue, meaning it might only need more time to pay, or a solvency issue, which could require more debt writedowns known as haircuts.
A draft deal with official creditors, which is expected to be finalised within months, gives the government more time to pay but stops short of an outright haircut in favour of focusing on payment extensions, lowering the debt service during the IMF programme and cutting interest levels.
Eyob said the country had to follow the principle of comparability of treatment with other creditors.
"Haircut or not, I think this is sometimes an unnecessary debate," he said. "The whole exercise is to help the country sustainably finance its development — that's the whole idea behind the debt treatment."
Ethiopia opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023.
Eyob also said he was in talks with China's main trade policy banks — Export-Import Bank of China and the China Development Bank — over concessional financing for projects such as Addis Ababa's city rail and airport expansions. He also held meetings with the US International Development Finance Corporation.
"We understand that they see us as one of the priority countries, so we should be able to see more investment from the US side," he said, adding discussions had focused around direct project financing as well as guarantees across a range of sectors, including energy.
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