Ethiopia is currently at the center of international economic concerns, as a mission from the International Monetary Fund (IMF) is visiting the country to discuss the establishment of a loan program. This approach takes place in a context where Addis Ababa, faced with financial difficulties, has requested significant financial assistance of around $3.5 billion from the IMF to repay its debt and stabilize its economy, heavily affected by foreign exchange shortages and high inflation.
Despite this request for aid, discussions with the IMF have been hampered in recent months due to the conflict in the north of the country and the absence of guarantees from creditors regarding debt relief. In December, the Paris Club said its offer to suspend Ethiopia’s debt payments until 2025 could be withdrawn if the country did not secure an IMF loan by the end of December. March 2024.
Meanwhile, pressure is also being put on Ethiopia to repay a billion-dollar Eurobond maturing this year. In December, the country missed a payment of $31 million, putting it in default, like Zambia and Ghana.
During its visit to Addis Ababa, the IMF mission is expected to analyze the economic program proposed by Ethiopia and formulate its recommendations thereon. In addition to issues related to political stability and debt, the international body could also encourage Ethiopia to devalue its currency and initiate reforms such as the liberalization of the banking and telecommunications sectors.
This situation highlights the importance for Ethiopia to find a sustainable financial balance and implement structural reforms to revive its economy and ensure its long-term financial stability.