Advertisement

IMF ends Ethiopia visit, deal not yet secured

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington

(Reuters) - The International Monetary Fund concluded its visit to Ethiopia to discuss a request for IMF support on Tuesday without reaching an agreement, leaving the East African nation short of a commitment it made with its official international creditors.

"The team made substantial progress towards establishing how the IMF could support the authorities' economic program," and discussions will continue later this month in Washington, the IMF said.

But the Paris Club of developed creditor nations, which does not include China, said last year that an agreement to suspend Ethiopia's debt payments through 2025 could be voided if the country did not secure an IMF loan by March 31.

It was not clear whether Paris Club members would enforce that deadline. Ethiopia reached a separate debt-service suspension deal with China earlier in 2023.

Ethiopia has been without an IMF program since its last lending arrangement with the fund expired in late 2022.

In December, Ethiopia became the third African nation to default in as many years after it failed to make a coupon payment on its $1 billion Eurobond.

Ethiopia's economy is reeling from high inflation, a shortage of hard currency and growing external debt repayments, after the federal government and a rebellious regional government signed a deal in late 2022 to end two years of armed conflict.

The country's external debt totaled $28.2 billion at the end of March, according to government data, including a $1 billion international bond maturing in December 2024.

Between 2006 and 2022, Chinese lenders had committed to extending more than $14 billion in loans to the country, according to Boston University.

(Reporting by Jahnavi Nidumolu in Bengaluru; Writing by Duncan Miriri; Editing by Hugh Lawson and Bill Berkrot)