The Ad Hoc Committee of Bondholders has reached an agreement in principle with Ethiopia to restructure $880 million in debt while criticizing the IMF and official creditors for flawed projections that prolonged a sovereign default.
The committee, representing about 45 percent of Ethiopia’s 2024 Eurobonds, announced the deal to convert the outstanding debt into a new bond maturing in July 2029. It accused the IMF of using inaccurate forecasts in its Debt Sustainability Analysis that underestimated Ethiopia’s export performance by 129 percent and 88 percent during the first two years of the Extended Credit Facility program.
The bondholders said these errors produced an unnecessarily alarmist view of Ethiopia’s debt needs. They also faulted the Official Creditors Committee for applying comparability rules based on outdated assumptions and ignoring stronger economic data.
The statement noted that the IMF faces a conflict of interest as both a preferred creditor and arbiter in restructurings. The group added that Ethiopia could have avoided the two-and-a-half-year default by accepting an earlier sustainable proposal from the committee.
