Ethiopia's federal government allocates almost one billion dollars (45 billion Birr) to repay debt in the next 12 months, Birrmetrics learnt. It will be the third-highest expenditure of the government, just next to road and education.
The money allocated for debt servicing is almost equal to 13pc of the country's budget and is approved at a time when Ethiopia's government waiting for approval of its request for debt restructuring to G20 countries. The East African country hopes it would lower the risk of debt distress rating to moderate by reprofiling debt service obligations.
The country's debt has already surpassed 50 billion dollars, half of which is external, while the rest was secured from domestic lenders. Last week, the IMF urges for the swift formation of the creditor committee for Ethiopia to enable the timely delivery of the debt operation that the country is requesting.