Ethiopia said Thursday that an International Monetary Fund (IMF) staff mission was in the country as work to secure a loan program from the multilateral lender gathers pace.
Cash-strapped Addis Ababa has requested billions from the IMF to help pay back debt and to stabilize the economy hit by currency shortages and high inflation. Reports say that the figure is $3.5 billion.
But conflict in its north and failure to secure commitments for debt relief from its creditors has seen talks with the Washington-based lender drag on for months.
In December, the Paris Club said its offer to suspend Ethiopia’s debt payments until 2025 could be withdrawn if the country does not secure an IMF loan by the end of March 2024.
Addis Ababa has already received guarantees for debt relief from China, its largest bilateral creditor. But the country faces pressure to settle a $1 billion Eurobond due at the end of this year.
In December, Ethiopia failed to pay a $31 million coupon, effectively entering default status. Zambia and Ghana have also defaulted on their debts.
During its stay in Addis Ababa, the IMF mission is expected to study Ethiopia’s proposed economic program and to give the lender’s thoughts on the same.
Analysts say that other than concerns over political stability and the debt situation, the IMF will press Ethiopia to devalue its currency and to undertake liberalization of the banking and telecom sectors.
