Jan 16 (Reuters) – The executive board of the International Monetary Fund completed the latest review of Ethiopia’s current financial program on Friday, the fund said in a statement, a move that will lead to the disbursement of around $261 million to the government.
The East African nation secured its $3.4 billion lending program with the IMF in 2024 as part of a far-reaching economic reforms package that also includes an overhaul of its external debt.
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“Maintaining reform momentum is essential to consolidate gains and support growth and poverty reduction in the medium term,” the IMF said in a statement. Staff of the fund and the government reached a deal on the review, the fourth under the program, last month.
Maintaining tight monetary conditions remains important to sustain disinflation, it added.
The government in Addis Ababa said earlier this month that it had reached a preliminary agreement with a group of bondholders of its sole $1 billion international bond on how to restructure it after negotiations. The deal requires approval from the IMF and bilateral creditors.
The initial deal marks an important step on Ethiopia’s journey to restore debt sustainability, the IMF said on Thursday.
“IMF staff are assessing the consistency of the agreement with the objectives and parameters of the IMF-supported program,” said Julie Kozack, the Fund’s head of communications.
The East African nation defaulted on its Eurobond two years ago after it opted to rework its external debt under the G20’s Common Framework initiative, which requires similar treatment of all creditors in the event of a restructuring.
In July last year, it formalised a restructuring deal with its bilateral creditors which is designed to provide cashflow relief of more than $3.5 billion.
Reporting by Duncan Miriri in Nairobi and Hyunsu Yim in Barcelona; Additional reporting by Rodrigo Campos in New York; Editing by Aurora Ellis
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