Ethiopia’s public creditors recommit to debt relief

A group of creditor nations on Wednesday recommitted to granting cash-strapped Ethiopia debt relief in the face of glacial progress.

Ethiopia requested debt relief from its creditor governments in early 2021 under a new G20 framework for debt restructurings, but progress has been complicated by a 21-month civil war that began in the northern Tigray region.

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Ethiopia’s creditor committee, which is co-chaired by representatives of the Chinese and French governments, first met only in September 2021.

In a statement issued on Wednesday, the creditor committee said that members had discussed the latest macroeconomic developments at its most recent meeting on July 19.

“The creditor committee for Ethiopia will pursue its work to find an appropriate solution to external debt vulnerabilities of Ethiopia, in a timely, orderly and coordinated manner,” the committee said.

The committee said it welcomed talks in June between the government and International Monetary Fund staff and looked forward to further discussions about an IMF support program, which is necessary for debt relief.

An IMF mission to the country is due next month to follow up on the June visit, a senior advisor to the country’s finance ministry said on Tuesday.

The IMF, the World Bank and others are pushing China, Ethiopia’s biggest creditor, and private creditors to accelerate work on debt treatments sought by Ethiopia, Chad and Zambia under the G20 joint debt restructuring framework.

Ethiopia’s finance ministry said in a statement it appreciated the IMF’s engagement and that it had shared all the relevant data about its debt stock and its strategy for managing its debt over the long term in four meetings with the creditor committee.

“The Government of Ethiopia thanks the Creditor Committee for their commitment and looks forward to an expeditious conclusion of the debt treatment discussion,” it added.

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