IMF Sees Progress in Program Support Talks with Ethiopia

ADDIS ABABA – The International Monetary Fund (IMF) says it has made “good progress” in the program support talks with Ethiopia.

More discussions are expected to be held in the coming weeks to reach an agreement “on a set of reforms” for the program, per the IMF mission.

Ethiopia launched its second homegrown economic reform agenda (HGRA II) and requested the global lender’s support to fund the program. Reports say authorities are looking to borrow at least two billion US dollars.

This week, Finance Minister Ahmed Shide and Central Bank Governor Mamo Mihretu discussed the program with the IMF Managing Director Kristalina Georgieva at the annual IMF meeting in Marrakech.

Afterward, Kristalina said she was “impressed by their determination to advance” the economic reform agenda.

The talks in Marrakech came days after the IMF mission concluded its 10-day visit to Addis Ababa, to hold discussions on the authorities’ request for IMF support for their reform program.

“The mission made good progress in discussing how the IMF could support the authorities’ economic program,” Alvaro Piris, the mission leader, said in a statement on Thursday.

Discussions to continue ‘in the coming weeks’

The three-year HGRA II aims to address key macroeconomic vulnerabilities and unleash Ethiopia’s considerable economic potential.

During the visit, according to Piris, the IMF “team noted the important steps taken to bring down inflation and stabilize the economy, including significant fiscal and monetary tightening.”

“This has put in place a critical foundation for success of the Homegrown Economic Reform Agenda, which aims to fulfill Ethiopia’s considerable economic potential,” Piris said. “Discussions will continue in the coming weeks to reach an agreement on a set of reforms for the requested program”.

Debt Revamp: Creditors Awaite for the IMF deal

The parameters of an IMF-supported program are key in Ethiopia’s ongoing bid to reach a debt restructuring deal with its Creditors under the G20 Common Framework.

The official creditor committee (OCC), formed under the CF and co-chaired by China and France, has remained engaged with the Ethiopian authorities.

The Global Sovereign Debt co-chairs progress report issued today says the creditors have already indicated “their readiness to move forward as soon as the authorities have reached agreement” with the IMF.

China agreed with Ethiopia on a temporary debt service suspension when the leaders of the two countries met in Johannesburg on the sidelines of the BRICS Summit last August.

“Discussions are ongoing within the OCC on how other official bilateral creditors could implement debt service suspension,” the report reads.

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