Ethiopia’s total external debt climbed to $39.97 billion at the end of 2025, up 9.1 percent from a year earlier, according to the World Bank’s newly released International Debt Report 2026. The figure is nearly double the $20.4 billion the country owed in 2015, underscoring a decade of steady borrowing to finance infrastructure and development.

Almost all of the debt, $39.03 billion, is public or publicly guaranteed, with short-term obligations accounting for just $941 million. Multilateral lenders hold the largest share at $19.8 billion, led by the World Bank’s International Development Association (IDA), which alone is owed $14.1 billion, making it Ethiopia’s single biggest creditor. The African Development Bank accounts for another $2.2 billion.

Bilateral lenders are owed $12.4 billion, nearly half of which, $6.1 billion, is owed to China. Private creditors, including holders of Ethiopia’s international bond, account for $6.8 billion.

Restructuring: bondholder deal expected by year-end

The report describes 2025 as a turning point in Ethiopia’s long-running debt restructuring. The country reached an agreement in principle with its Official Creditor Committee in March 2025, and in December all 14 committee members signed a memorandum of understanding covering roughly $8.4 billion in debt. The first bilateral agreement under that framework was signed with France in February 2026.

Talks with bondholders have been bumpier. An initial deal was rejected by official creditors, who said it did not meet the “comparability of treatment” standard requiring private lenders to offer relief on terms similar to governments. A revised proposal won official creditors’ backing in August 2026, and the World Bank expects an agreement with bondholders to be signed and implemented before the end of this year.

Mixed signals in debt ratios

Ethiopia’s debt burden relative to its earnings looks lighter than a decade ago in some respects. External debt stood at 238 percent of exports in 2025, down 13.3 percent, while debt service consumed 7 percent of export earnings, down 27.1 percent. Debt service amounted to about 1 percent of gross national income.

However, external debt as a share of GNI rose 29.3 percent to 32 percent. The report puts Ethiopia’s GNI at $126.1 billion and its population at 135.5 million.

On new borrowing, official creditors lent to Ethiopia in 2025 on highly concessional terms, averaging a 31-year maturity, a six-year grace period and a 0.7 percent interest rate. Private lenders offered far tougher terms: 12-year maturities, almost no grace period and an average interest rate of 2.9 percent.

Transparency setback flagged

The World Bank also singled out Ethiopia as one of the countries where public debt data has become less accessible, noting that disclosure has weakened since the country defaulted on its international bond in 2023. The finding stands against a broader regional improvement: the share of Sub-Saharan African countries publishing fully accessible debt data rose from 50 percent in 2020 to 76 percent in 2025.

Ethiopia remains classified as a low-income, IDA-eligible country in the report, and its data are listed as fully reported to the World Bank’s Debtor Reporting System.