The International Monetary Fund (IMF) has reached a staff-level agreement with Ethiopia on the fourth review of its $3.4 billion lending programme, clearing the way for a new disbursement of $261 million once approved by the Fund’s Executive Board.
The latest tranche will raise total IMF support to Ethiopia under the Extended Credit Facility (ECF) to approximately $2.13 billion, reflecting continued engagement as the country pushes ahead with macroeconomic and structural reforms.
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Ethiopia secured the multi-year bailout in July 2024, at a time when the government was intensifying efforts to restructure its external debt. In its review statement, the IMF emphasized that sustaining reform momentum will be essential to reinforcing macroeconomic stability, encouraging private investment, and supporting medium-term growth and poverty reduction.
The Fund also recommended that authorities maintain a tight monetary policy stance to help contain inflation and preserve economic gains.
Ethiopia is restructuring its external debt under the G20 Common Framework, following a default on its only Eurobond in late 2023. The government has already reached an agreement to rework its official bilateral debt, but negotiations with private creditors — particularly over the scale of a potential writedown on the $1 billion Eurobond — remain unresolved.
On the overall debt restructuring process, the IMF said efforts to secure appropriate debt treatment and restore debt sustainability are “advancing.” The staff-level agreement will now be submitted to the IMF Executive Board for final approval before funds are released.
