Ethiopian Prime Minister Abiy Ahmed (PhD) gave lawmakers an extensive rundown on Thursday of his government’s economic stewardship to date as well as ongoing fiscal and monetary challenges.
In his address to parliament, Abiy said Ethiopia has brought down its debt-to-GDP ratio from previous high levels to 17.5 percent currently. "Our target is to reach 10 percent or lower over the coming years," Abiy said.
This comes after Addis defaulted on Eurobonds in December, the third African default in three years.
Sources said Addis has sought 3.5 billion dollars from the IMF and similar amounts from the World Bank for budget support and debt relief through reforms. Abiy indicated negotiations that began five years ago have progressed, saying "We have been having a wide range of talks, negotiations and discussions with the IMF and World Bank. Because we were a bit tough with them and they were also tough with us, the (talks) took five years."
Abiy told parliamentarians Ethiopia could receive 10.5 billion dollars if reforms are implemented, quoting him as saying "If this succeeds and we agree to the necessary changes, Ethiopia will get 10.5 billion dollars in external support in the coming years."
The premier reported tax collection of 466 billion birr over 11 months, achieving 96 percent of target, though at seven percent of GDP it shows "high evasion." On the budget, he said "The deficit has come down from four percent to 2.5 percent of GDP."
Foreign exchange earnings grew to over 10 billion dollars from exports and services, and 6.5 billion dollars in remittances, Abiy said. FDI hit three billion dollars maintaining Ethiopia as East Africa's top destination. Annual inflation fell from 30 percent to 23 percent but remains elevated.