Ethiopia Secures Agreement for Debt Relief with Official Creditor Committee
Ethiopia has secured an Agreement in Principle with its Official Creditor Committee for a debt relief plan covering approximately USD 8.4 billion in public debt. The agreement aims to facilitate a USD 3.5 billion reduction in debt service, providing USD 2.5 billion in relief from 2023 to 2028, while enabling increased public investments aligned with national development goals.
Ethiopia has successfully negotiated an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) regarding a debt treatment plan under the G20 Common Framework. This plan addresses approximately USD 8.4 billion in outstanding public debt. The Ministry of Finance stated that alongside a previously arranged financing package with the International Monetary Fund (IMF), Ethiopia is dedicated to seeking debt relief from external creditors to facilitate a USD 3.5 billion reduction in debt service during the program period.
The newly established AIP with the OCC represents a significant advancement towards this objective, enabling approximately USD 2.5 billion in debt service relief from 2023 to 2028. The primary goals of this agreement are to streamline Ethiopia’s external repayment obligations, significantly decrease debt servicing costs, and facilitate a greater allocation of resources towards public investments that align with Ethiopia’s Perspective Development Plan.
Ethiopia’s agreement with the Official Creditor Committee marks a critical step in the country’s efforts to reduce its public debt and manage its financial obligations more effectively. The planned debt relief aims to enhance fiscal sustainability and support national development priorities, thus contributing positively to Ethiopia’s economic landscape.
Original Source: www.2merkato.com
