Latest news with #EyobTekalign
Zawya
7 hours ago
- Business
- Zawya
State Minister Calls for Rigor and Responsibility in Economic Discourse at Ethiopian Economics Association (EEA) Conference
State Minister of Finance, Dr. Eyob Tekalign, opened the 22nd International Conference on the Ethiopian Economy, organized by the Ethiopian Economics Association (EEA). In his keynote address, Dr. Eyob praised the EEA for its consistent contribution to policy-relevant research over more than two decades, highlighting the Association's role as a vital platform for evidence-based economic dialogue. In his opening speech the state minister conveyed a strong message on the importance of professionalism, analytical rigor, and responsible communication in shaping the nation's economic future. The State Minister also outlined the progress Ethiopia has made under its ongoing macroeconomic reform program, noting significant gains in inflation control, export performance, debt sustainability, and tax revenue mobilization. Beyond the macroeconomic achievements, Dr. Eyob shed light on a growing challenge in the public policy space: the need for clarity, integrity, and responsibility in economic analysis and communication. 'In recent months, we have witnessed how unclear communication or imprecise use of statistics, particularly around sensitive issues such as debt sustainability, can sow confusion and erode public confidence,' Dr. Eyob remarked. 'In today's fast-moving information environment, rigor and clarity are not optional—they are essential.' He emphasized the EEA's unique responsibility as a trusted and independent economic institution to uphold the highest standards of analysis and avoid sensationalism or politicized interpretations. Dr. Eyob underscored the Ministry of Finance's readiness to deepen collaboration with the EEA and other institutions that share a commitment to informed, evidence-based policymaking. The annual international Conference on the Ethiopian Economy brings together leading economists, academics, policymakers, and practitioners to deliberate on key economic developments and policy directions. Distributed by APO Group on behalf of Ministry of Finance, Ethiopia.
Arabian Post
10-06-2025
- Business
- Arabian Post
Ethiopia Targets 8.9 % Growth as Budget Widens
Ethiopia's finance minister has announced that the economy is projected to expand by 8.9 % in the fiscal year beginning 8 July 2025, alongside a modest increase in the budget deficit amid structural reforms. Finance Minister Ahmed Shide addressed parliament on Tuesday, outlining the forecast for the next fiscal year, citing an acceleration in real GDP growth from an estimated 8.4 % this year to 8.9 % next year. The state budget deficit is expected to rise slightly to 2.2 % of GDP, compared to 2.1 % in the current year. Total government expenditure is projected at 1.9 trillion birr, equivalent to around US $14 billion. This positive outlook is deeply anchored in ongoing reforms backed by an International Monetary Fund programme. These include the liberalisation of the exchange rate, debt restructuring negotiations, and the establishment of the Ethiopian Securities Exchange, which opened in January after a 50‑year absence. ADVERTISEMENT The cabinet's approval of the new budget earlier this month signalled a strategic reallocation of resources, with spending set to increase by 31 % compared to the previous year's 971 billion birr. A significant portion is earmarked for national security, productivity enhancement, and disaster relief, including continued subsidies for fuel, fertiliser, oil and medicines—a move aimed at dampening inflationary pressure on households. Reforms and their impacts The IMF programme that began in July 2024 has been a linchpin in the reform agenda. In April, State Finance Minister Eyob Tekalign reported that the third review of the four‑year US $3.4 billion loan arrangement had reached staff‑level agreement, with approval by the IMF executive board anticipated this month. Subsequent draws will hinge on continued reform progress, notably debt restructuring. Debt, inflation and exchange rate liberalisation remain pressing concerns. A draft budget revealed that 463 billion birr—nearly 39 % of recurrent expenditure—will go towards debt servicing, surpassing planned capital outlays. The government intends to restructure approximately US $3.5 billion in external liabilities through agreements in upcoming weeks. Bondholder writedowns are expected as part of a broader debt resolution strategy. Monetary reforms have lessened inflation, which reached 29.2 % in 2022/23, and narrowed the spread between official and parallel exchange rates. Foreign reserves have rebounded, tripling to US $3.6 billion, easing foreign exchange shortages. These financial indicators have been central in IMF assessments. Policy makers are awaiting formal debt restructuring talks this summer with official and private creditors alike, guided by the G20 Common Framework. Iran‑timed agreements with Chinese policy banks, the U.S. International Development Finance Corporation and other funders are being explored to support infrastructure and development needs. Regional comparisons and strategic outlook Ethiopia remains one of sub‑Saharan Africa's highest growth economies, although still below the pre‑covid annual average of around 10 %. The country's trajectory continues to be shaped by recovery from the Tigray war, covid‑19 disruptions, droughts and locust invasions, but ongoing reforms are expected to unlock further expansion. The imminent fiscal year budget, combining a steep rise in expenditure with a stabilising deficit, underscores a cautious but ambitious strategy: focusing on debt management, reform momentum and public service delivery, rather than unfettered spending. Key stakeholders, including opposition figures such as Desalegn Chane of the National Movement of Amhara, have voiced concern over rising tax burdens amid steady living costs and a depreciating birr. Criticism has targeted new levies on motor vehicles and excise taxes, with claims these conflict with subsidy policies. The finance minister, however, defended these as necessary for fiscal resilience and revenue expansion. Broader reform dynamics have been influenced by Prime Minister Abiy Ahmed's economic agenda, including the launch of Ethiopia's first stock market since the Haile Selassie era, currency liberalisation, and opening the banking sector to foreign investment. These steps have been deemed essential to securing up to US $27 billion in external funding from IMF, World Bank, UAE, China and others over the next four years. Looking ahead The projection of roughly 8.9 % GDP growth signals confidence that reforms are gaining traction, even as the government prepares to finance a wider budget and service rising debt. The success of the IMF programme's next review, debt restructuring outcomes, and reform implementation will determine whether Ethiopia can sustain its economic momentum and weather domestic and global headwinds.
Zawya
29-04-2025
- Business
- Zawya
Ethiopia expects $3.4bln deal on IMF review within days
Ethiopia expects to reach a preliminary agreement on the third review of its $3.4 billion loan programme with the International Monetary Fund early this week and sees formal debt talks with bondholders starting in summer, State Finance Minister Eyob Tekalign told Reuters. The country, which struck a four-year, $3.4 billion programme IMF deal last July, is in the midst of a far-reaching reform push, including the floatation of its birr currency and a push to get its debt restructuring over the line. Speaking on the sidelines of the IMF and World Bank Group spring meetings in Washington, Eyob said he had met IMF Managing Director Kristalina Georgieva as well as other staff to discuss progress on reforms.'They are very much pleased with how the programme is going,' said Eyob in an interview on Saturday. 'The results we've seen now were pleasant surprises, because we've over-achieved in many areas, whether it's in reserve accumulation, in inflationary trends or in export growth.'Eyob expected the Fund's executive board to sign off on the review in June - a step needed to trigger the next payout of the loan programme. Read: Ethiopia's tough new rules for foreign banksMeanwhile, talks in Washington with some holders of Ethiopia's sole $1 billion international bond had also been productive, he said, adding formal talks aimed at hammering out details of a debt rework could start in the summer.'We cannot get into substantive discussions, because they are waiting to see the latest DSA macro tables from the fund,' he said, referring to the IMF's debt sustainability analysis. Ethiopia in March reached a draft agreement with its official creditors on restructuring $8.4 billion 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 U. S. side,' he said, adding discussions had focused around direct project financing as well as guarantees across a range of sectors, including energy. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Reuters
28-04-2025
- Business
- Reuters
Exclusive: Ethiopia expects preliminary deal on IMF review within days, finance minister says
WASHINGTON, April 28 (Reuters) - Ethiopia expects to reach a preliminary agreement on the third review of its $3.4 billion loan programme with the International Monetary Fund early this week and sees formal debt talks with bondholders starting in summer, State Finance Minister Eyob Tekalign told Reuters. The East African nation, which struck a four-year, $3.4 billion program IMF deal last July, is in the midst of a far-reaching reform push, including the floatation of its birr currency and a push to get its debt restructuring over the line. Speaking on the sidelines of the IMF and World Bank Group spring meetings in Washington, Eyob said he had met IMF Managing Director Kristalina Georgieva as well as other staff to discuss progress on reforms. "They are very much pleased with how the program is going," said Eyob in an interview on Saturday. "The results we've seen now were pleasant surprises, because we've over-achieved in many areas, whether it's in reserve accumulation, in inflationary trends or in export growth." Eyob expected the Fund's executive board to sign off on the review in June - a step needed to trigger the next payout of the loan programme. Meanwhile talks in Washington with some holders of Ethiopia's sole $1 billion international bond had also been productive, he said, adding formal talks aimed at hammering out details of a debt rework could start in the summer. "We cannot get into substantive discussions, because they are waiting to see the latest DSA macro tables from the fund," he said, referring to the IMF's debt sustainability analysis. Ethiopia in March reached a draft agreement with its official creditors on restructuring $8.4 billion 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 U.S. 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 U.S. side," he said, adding discussions had focused around direct project financing as well as guarantees across a range of sectors, including energy.
Zawya
21-03-2025
- Business
- Zawya
Ethiopia reaches agreement in principle with official creditors, state finance minister says
Ethiopia has reached an agreement in principle with its official creditors during debt default negotiations, the country's state finance minister said on Friday. The East African nation opted to restructure its external debt under the G20's Common Framework, before it defaulted on its sole Eurobond in December 2023. It struck a financing deal with the International Monetary Fund last July, enabling it to attempt to jumpstart the stalled debt restructuring process. "AIP (Agreement In Principle) is reached," Eyob Tekalign told Reuters, without providing more details. (Reporting by Dawit Endeshaw; Writing by Hereward Holland and Duncan Miriri; Editing by Tomasz Janowski)
