An IMF delegation is in Ethiopia for the fourth review of the nation's Extended Credit Facility program. The review highlights debt restructuring and currency challenges. Successful completion would unlock about $262.3 million in funding.
An International Monetary Fund (IMF) delegation is in Ethiopia conducting the fourth review of the country's Extended Credit Facility (ECF) program, a key part of its economic reform efforts. Led by Alvaros Piris, the team arrived in late October and has been meeting with government officials, economic stakeholders, and financial institutions, including the state-owned Commercial Bank of Ethiopia, which is undergoing reforms launched in July 2024. These discussions continue from the IMF and World Bank annual meetings in Washington D.C. last month.
The Ethiopian government is seeking additional international support beyond the four-year, $3.4 billion ECF approved in July 2024, which is being disbursed to address macroeconomic imbalances, enhance stability, and ease foreign currency shortages while building reserves. The review evaluates progress on quantitative performance criteria and structural benchmarks, including targets for net international reserves by the end of June 2025.
Experts point out that this assessment aligns with ongoing debt restructuring talks with official creditors and private bondholders, which are nearing completion. It also addresses challenges from the widening gap between official and parallel market exchange rates. In recent weeks, the government has intensified efforts to curb illegal activities, such as illicit remittance networks and the illegal gold trade.
Some traders note a dip in foreign currency availability at commercial banks, possibly due to seasonal factors or banks' preferences for dealings with the Ethiopian Petroleum Supply Enterprise, which provides local currency in exchange for foreign currency amid its strong liquidity. This period also signals the start of the harvest season, potentially boosting exports.
Upon successful completion of the review, Ethiopia stands to receive an additional SDR 191.7 million (about $262.3 million) from the IMF.