ADDIS ABABA – The Ethiopian delegation led by Finance Minister Ahmed Shide held talks with the International Monetary Fund or IMF’s top official over potential financial support for the government’s economic reform plans.
IMF’s Managing Director Kristalina Georgieva met with the officials, involving the National Bank of Ethiopia (NBE) Governor Mamo Mihretu, who was in Washington for the 2023 World Bank-IMF spring meetings last week.
Ethiopia and the IMF team made progress over the scope of the global lender’s support for the second phase of the Homegrown Economic Reform Agenda (HGER II) during their talks last Month.
The IMF team visited Addis Ababa to conduct technical work to prepare for a potential IMF-supported program after authorities requested the global lender for financial assistance for the reform program.
The East African nation has been hit by multiple shocks including drought, internal conflicts, and spillovers from the pandemic and the war in Ukraine.
Authorities’ reform plan has been welcomed by the IMF team “as an ambitious program that aims to address key macroeconomic vulnerabilities and unleash Ethiopia’s considerable economic potential.”
The plan was a subject of the meeting between the Ethiopian delegation and IMF Managing Director Georgieva and the IMF team on Sunday.
The IMF Managing Director said the discussions were focused on Ethiopia’s economic challenges and prospects.
The talks involved “how the IMF can support the ambitious reform plans in their Homegrown Economic Reform Agenda,” Georgieva said, adding that “the IMF stands by Africa!”.
The meeting took place in the context of the delegation’s week-long discussions with various officials of the IMF and World Bank Group in Washington.
On Friday, World Bank Group President David Malpass met with Finance Minister Ahmed to discuss “the critical reforms” Ethiopia needs to restore macroeconomic stability.
He also expressed the World Bank Group’s strong support for Ethiopia including budget support in the form of grants and highly concessional credits as the Government implements the reform program.
Ethiopia’s real GDP is expected to grow at above 6%, which, although higher than last year, is still significantly below the pre-Covid-19 growth rate of 9% recorded in 2019, as per a World Bank report.
It also notes that the economy was last year held back by high inflation and conflict, while failed rains in the first half of 2022 weighed on agricultural activity – with significant losses in livestock.
The high-level discussions with the IMF and the World Bank officials in Washington have been focused on the economic reform plans and ways to help the country meet its challenges.
“Negotiation with the two Multilateral institutions advanced well to unlock the needed development and humanitarian financial assistances” to the country, Ethiopia’s ambassador to the U.S. Seleahi Bekele said in a tweet today.