The International Monetary Fund (IMF) has given a nod to the second review of Ethiopia’s financing program, unlocking a $250 million disbursement to support the country’s economic reforms.
This move is part of a four-year, $3.4 billion program agreed upon last July, aimed at putting Ethiopia’s debt restructuring back on track.
Ethiopia has made significant strides in implementing far-reaching reforms, including floating its birr currency, to restore debt sustainability and secure debt treatment. The IMF has welcomed the progress made in debt restructuring negotiations under the Common Framework.
The Fund’s assessment reveals that Ethiopia’s economy has performed better than expected, with inflationary pressures under control and hard currency reserves rising faster than anticipated.
The IMF has now switched to a conventional six-month review schedule, having closely monitored the impact of the reforms.
However, the IMF’s role in Ethiopia’s debt overhaul has faced criticism, particularly from World Bank staff, who questioned the Fund’s debt sustainability assessment.
