Ethiopia Secures $8.4 Billion Debt Relief Agreement with Creditors

Ethiopia has reached an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) regarding the restructuring of approximately $8.4 billion in international debt under the G20 Common Framework. The Ministry of Finance announced that this AIP is part of a broader financing package with the International Monetary Fund (IMF) aimed at achieving a $3.5 billion reduction in debt service over the program period. The agreement is expected to provide around $2.5 billion in debt service relief from 2023 to 2028, facilitating smoother external repayments and allowing for greater allocation of resources to public investments. Ethiopian officials, including Finance Minister Ahmed Shide, expressed optimism that this deal will help restore economic stability and improve relations with international partners. The move comes in the wake of Ethiopia's default on a $1 billion eurobond in December 2023, prompting urgent negotiations with external creditors. This agreement signals Ethiopia's commitment to transparency and compliance with debt sustainability, as it engages with commercial creditors and bondholders.