Ethiopia welcomes steps taken by Creditor Committee for debt treatment under G20 Common Framework

Addis Ababa, September 22, 2021 (FBC) – The Ministry of Finance of the Federal Democratic Republic of Ethiopia welcomes the important step taken by the Creditor Committee for a debt treatment under the G20 Common Framework to enable the timely delivery of the debt operation during its September 16 meeting.

“We are pleased with the commitment shown by the Creditor Committee to support Ethiopia in its endeavor to provide debt treatment tailored to the needs of the economy, as a foundational step towards ensuring macro-economic stability. We are particularly grateful for the work done so far by the co-chairs of the creditor committee, France and the People’s Republic of China for their tireless effort to form the committee and the opportunity extended to the Government of Ethiopia to attend the virtual meeting and present its request,”

This action will provide liquidity relief from the economic challenges created by the COVID-19 pandemic and help establish the fiscal space needed to meet our development and social spending needs, while lowering the risk of debt distress rating to moderate by reprofiling debt service, the Ministry said.

The Ministry of Finance reiterated commitment to work with creditors to finalize the details of the debt treatment.

The steadfast commitment of the Government of Ethiopia to implement our Homegrown Economic Reform Plan is resulting in a resilient economy with a stable growth path. Our achievements include a prudent and proactive macroeconomic management, a sustainable public debt management system, an improved business environment for greater private sector participation, enhanced performance of public enterprises, improved export performance, as well as increased revenues and measured expenditures.

The Ministry recognizes the important support of the International Monetary Fund (IMF) to Ethiopia’s reform process under the Extended Credit Facility (ECF)/ Extended Fund Facility (EFF) arrangement program.

The IMF’s continued engagement in Ethiopia will be critical as the program supports Ethiopia’s economic recovery after COVID-19 related shocks, while safeguarding the delivery of resources to vulnerable groups. The technical assistance by the IMF supporting fiscal, monetary, and financial sector policy reforms have also been highly beneficial in strengthening the performance of our economy.

Despite the technical expiry of the ECF component of the program, the EFF will continue to be active and we have requested a new ECF arrangement that will give us access to concessional Poverty Reduction and Growth Trust (PRGT) resources, replacing the expired component.

“We look forward to discussing the modalities of IMF engagement going forward and appreciate the continued support by our international partners for the implementation of our Homegrown Economic Reform Program,” the Ministry said in a statement.