A team from the International Monetary Fund (IMF), led by Mr. Alvaro Piris, visited Addis Ababa from September 17 to 26, 2024, to evaluate Ethiopia’s progress on its ongoing economic reforms. This visit was part of the first review of the country’s economic program supported by the IMF’s Extended Credit Facility (ECF), following the approval of a financial arrangement amounting to SDR 2.556 billion (approximately $3.4 billion) by the IMF Executive Board on July 29, 2024.
In a statement concluding the visit, Mr. Piris confirmed that IMF staff and Ethiopian authorities had reached a staff-level agreement on the first review of the ECF program. This agreement now awaits approval from IMF management and the Executive Board. Once endorsed, Ethiopia will gain access to an additional SDR 255.60 million (approximately $345 million).
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Ethiopia’s economic reform agenda, including the recent adoption of a market-determined exchange rate, is reported to be progressing smoothly. Since the transition to a floating exchange rate regime on July 29, 2024, exchange rate fluctuations have narrowed the gap between formal and informal markets with minimal economic disruption. The new system has also eased the foreign exchange shortage, a key barrier to economic growth.
Looking ahead, the IMF noted that continued progress on Ethiopia’s homegrown economic reforms will be vital to maintaining macroeconomic stability and driving growth. Key measures include tight monetary policies to control inflation, ending the practice of monetary financing of the government, and implementing a temporary fiscal package to mitigate the socio-economic impact of the reforms. Efforts to boost revenue and improve the financial health of state-owned enterprises will enable sustainable government spending on priority areas.
The IMF team expressed appreciation for Ethiopia’s commitment to the reforms. During their mission, they met with key government officials, including Finance Minister Ahmed Shide, National Bank Governor Mamo Mihretu, and State Minister of Finance Eyob Tekalign, as well as representatives from banks and private companies.
