FM Discusses Ethiopia’s Debt Revamp Request with Creditors Committee Co-chair

ADDIS ABABA – Finance Minister Ahmed Shide discussed Ethiopia’s request for debt restructuring with William Roos, co-chair the official creditors committee, or OCC, for Ethiopia.

Ahmed met with Roos, who is also Assistant Secretary of the French Ministry of Economy, on Thursday.

“The two parties discussed the progress of the OCC’s work and the steps to accelerate Ethiopia’s debt treatment,” the Ministry of Finance said in a statement.

The meeting comes after progress made in recent talks between the IMF and Ethiopia over a new IMF-support program, which would include a debt-sustainability analysis required for the debt revamp.

The creditor committee for Ethiopia was formed on September 16, 2021, more than a year after its application for debt treatments was endorsed by a group of 20 top economies and the Paris Club.

The committee, which is co-chaired by China and France, has since met five times to discuss the request and provide Ethiopia the necessary financing assurance.

French Assistant Secretary of Economy Roos, in his capacity as the Co-Chair of the Paris Club and the Co-Chair of the official creditors committee for Ethiopia, briefed Ahmed about the current state of the discussion, according to the Ministry of Finance.

He also spoke about “the working dynamics of the OCC and the commitment shown by all creditors to deliver a financing assurance in line with the broader IMF program,” MoF’s statement says.

Ross highlighted the success of Creditor Committees that completed debt treatment requests for Chad and Zambia.

The French Assistant Secretary assured Finance Minister Ahmed “of the dedication of the Paris Club to expeditiously resolve the debt treatment request of Ethiopia,” the statement reads.

The G20 Common Framework was launched in 2020 and designed to streamline debt restructuring efforts in the wake of poor countries buckling under the fallout from the pandemic. The process is, however, often criticized for its slow progress.

Last week, the President of the World Bank Group David Malpass urged bilateral and private sector creditors to accelerate the work on debt treatments sought by Ethiopia. “It has been far too long for the people of Zambia and Ethiopia to be waiting for the debt relief that they desperately need,” Malpass said.

The amount of debt owed by the two nations, while very substantial to them and relative to the size of their economies, is relatively small for the creditors, said the President, adding the “progress can and should be made fast”.

Ethiopia reportedly had about $26 billion of external liabilities as of September, mainly from China, and has spent $1.7 billion in debt service payments in the first half of the current fiscal year alone.

Securing debt restructuring deal will allow the IMF to seek board approval of new extended credit facility agreement, which could unlock financial support for authorities’ reform program.