In a major step toward stabilizing its public finances, the Ethiopian government has finalized a Memorandum of Understanding (MoU) with its Official Creditor Committee (OCC) under the G20 Common Framework, securing debt relief exceeding USD 3.5 billion.
The agreement formalizes a deal reached in principle back in March 2025 and marks the successful end of a complex, multi-year negotiation process. The OCC is co-chaired by China and France, with other bilateral creditors participating. The debt relief is expected to ease Ethiopia’s external payment pressures and help restore long-term debt sustainability amid ongoing macroeconomic reforms.
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According to the Ministry of Finance, the MoU will now be followed by bilateral agreements with each OCC member, a process the government hopes will move swiftly.
“Ethiopia remains confident that the collaborative and pragmatic spirit that has prevailed so far will help expedite the process,” said Dr. Eyob Tekalign, State Minister of Finance. He reaffirmed Ethiopia’s commitment to engaging in good faith with all external creditors, including private bondholders, under the comparability of treatment principle.
Why This Matters
This deal is part of Ethiopia’s broader economic recovery agenda following years of fiscal strain due to conflict, pandemic shocks, and FX shortages. It comes on the heels of reforms supported by the IMF’s Extended Credit Facility (ECF) and includes steps such as currency reform, monetary tightening, and the launch of the Ethiopian Securities Exchange (ESX).
The agreement also opens a clearer path for Ethiopia to complete debt restructuring talks with other external creditors, including Eurobond holders, as the country navigates a delicate balance between reform and economic stability.
