IMF, Ethiopia Reach Preliminary Deal on US$2.9bln Financing Package

ADDIS ABEBA – International Monetary Fund (IMF) announces today it has reached a staff-level agreement on a US$2.9 billion financing package with Ethiopia.

An IMF staff team led by Sonali Jain-Chandra visited Addis Ababa from October 29 to November 8, 2019 to hold discussions on the 2019 Article IV Consultation for Ethiopia.

During the visit, the Fund says the authorities request a three-year US$2.9 billion financing package that could be supported by the IMF under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF).

Discussions with the authorities continued after the mission which ended in agreement.

“The Ethiopian government and the IMF staff team reached a preliminary agreement, subject to approval by the Fund’s Executive Board, on policies that could constitute the basis for Ethiopia’s new program supported by the ECF and EFF arrangements,” Jain-Chandra said in a statement issued on the staff-level agreement today.

“The overall objective of the program would be to support the implementation of the authorities’ Homegrown Economic Reform Program,” Chandra said.

Accordingly, the Fund-supported program would consist of five main pillars.

Durably address the foreign exchange shortage and transition to a more flexible exchange rate regime; strengthen oversight and management of state-owned enterprises to contain debt vulnerabilities; strengthen domestic revenue mobilization and expenditure efficiency to create space for adequate poverty-reducing and essential infrastructure spending; reform the financial sector to support private investment and modernize the monetary policy framework; and strengthen the supervisory framework and financial safety nets, are stated as the five pillars, according to IMF’s team.

“We will submit the program request to the Executive Board for its consideration,” Chandra concluded.