Ethiopia has successfully finalized a two-year debt suspension agreement with China, providing a much-needed respite from its financial challenges.
Concurrently, the Ethiopian government has taken proactive steps by reaching out to holders of a Eurobond maturing in December 2024 to initiate discussions on debt restructuring, further addressing the nation's economic concerns.
Since Prime Minister Abiy Ahmed assumed office in 2018, Ethiopia, Africa's second most populous country with a population of approximately 120 million, has witnessed heightened investor interest due to promises of economic liberalization.
However, the nation has faced formidable obstacles, including double-digit inflation, foreign currency shortages, escalating debt repayments, and conflicts in various regions that has undermined reforms taken under his rule.
The finance ministry of Ethiopia also revealed that the country had reached an agreement in principle with its official bilateral creditors regarding an interim debt-service suspension.
This agreement follows a previous successful debt suspension deal with China. Eyob Tekalign, the State Minister of Fiscal Policy and Public Finance, confirmed that the terms proposed by the creditors committee align closely with the conditions agreed upon with China, with the possibility of some creditors offering more favorable terms.
