Ethiopia and the International Monetary Fund (IMF) have made progress toward reaching a staff-level agreement on the fourth review of the country’s Extended Credit Facility (ECF), as discussions centre on fiscal discipline and policy reforms aimed at stabilising the economy.
An IMF mission led by Alvaro Piris held consultations in Addis Ababa from October 30 to November 13 with senior government officials, including Finance Minister Ahmed Shide and National Bank Governor Eyob Tekalign. The team also met representatives from the banking sector and private firms.
“The staff team made good progress towards staff-level agreement on the fourth ECF review. Discussions will continue virtually in the coming weeks,” Piris said in a statement issued at the end of the visit.
The review comes at a critical time for Ethiopia, which is seeking to restore macroeconomic stability while attempting to achieve single-digit inflation, a stable foreign exchange market, and a narrower fiscal gap. The government has embarked on a gradual fiscal consolidation effort, including subsidy rationalisation and tighter monetary policy, as part of its reform commitments under the ECF.
Observers say the phrase “good progress towards staff-level agreement” means the IMF’s technical team and the Ethiopian authorities have largely aligned on policy performance and targets, though some outstanding issues remain. “They’re close, but not there yet.” Once both sides sign off, the report will be submitted to the IMF Executive Board for approval, paving the way for the next loan disbursement.
The outcome of the fourth review will be key to unlocking the next tranche of IMF financing and maintaining creditor confidence as the government continues to negotiate debt treatment with official and private lenders.