Ethiopia Secures $3.5B Debt Relief Deal With Official Creditors

Ethiopia has secured a significant debt relief agreement under the G20 Common Framework, signing a Memorandum of Understanding with its Official Creditor Committee (OCC) that provides over $3.5 billion in debt relief. This milestone marks a major step towards restoring long-term public debt sustainability after years of complex negotiations, with China and France playing leading roles in the creditor committee. The Ethiopian government is now working to finalize bilateral agreements with OCC members to implement the terms and plans to engage private creditors to ensure comprehensive debt restructuring. The International Monetary Fund (IMF) has also approved a third review of Ethiopia's $3.4 billion loan program, releasing $262.3 million to support economic stability amid ongoing debt talks. Despite the restructuring progress, Ethiopia anticipates that actual debt repayments will increase starting in 2026 under revised terms, reflecting continued fiscal challenges following a 2023 Eurobond default. The agreement is seen as a critical foundation for Ethiopia's economic recovery and improved negotiations with private creditors.