Ethiopia has secured an Agreement in Principle with its Official Creditor Committee to negotiate debt relief that covers approximately USD 8.4 billion in public debt. This initiative aims for a USD 3.5 billion reduction in debt service and is tied to a financing agreement with the IMF. The agreement will provide about USD 2.5 billion in relief from 2023 to 2028, helping to improve Ethiopia’s financial stability and support public investment priorities.
Ethiopia has successfully reached an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) concerning a debt treatment plan under the G20 Common Framework. This plan addresses approximately USD 8.4 billion in public debt. The Ministry of Finance announced this development in a statement issued today, highlighting the critical nature of the agreement for the country’s financial strategy.
Under the terms of the AIP, which is part of a broader financing package approved by the International Monetary Fund (IMF), Ethiopia aims for a USD 3.5 billion reduction in debt service payments over the program’s duration. The OCC agreement is integral in achieving this target, providing about USD 2.5 billion in debt service relief from 2023 to 2028.
The primary objectives of the agreement include improving Ethiopia’s external repayment structure, significantly reducing debt costs, and enhancing the allocation of resources towards public investments in line with the nation’s Perspective Development Plan. This strategic restructuring is expected to foster economic growth and stability.
In summary, Ethiopia’s engagement with the Official Creditor Committee marks a pivotal step in addressing its substantial public debt. Through the Agreement in Principle, the country aims for significant debt service reductions, which will enhance fiscal stability and free up resources for essential public investments. This initiative aligns with Ethiopia’s long-term development goals while ensuring smoother repayment conditions.
Original Source: www.2merkato.com
