The International Monetary Fund (IMF) and Ethiopia have reached a working-level agreement on the economic policies needed to complete the initial review of a four-year, $3.4 billion loan program. The IMF announced today that the formal completion of this review by its Executive Board would allow Ethiopia to access approximately $345 million in financing.
Ethiopia, Africa’s most populous country after Nigeria, initiated the $3.4 billion financing program with the IMF in July. The country is working hard to implement economic reforms, including the introduction of a flexible exchange rate system. According to the IMF, these efforts are making good progress.
The IMF emphasized that the successful implementation of these reforms is expected to strengthen Ethiopia’s macroeconomic stability, improve the availability of foreign exchange and promote sustainable economic growth. The East African country has faced significant economic challenges in the past, including high inflation rates and persistent foreign currency shortages. At the end of last year, Ethiopia also became the third African country to default on its external debt.
The next critical step for Ethiopia to access the agreed funds is the formal completion of the review process by the IMF Executive Board. This process will be closely monitored as it could be a game-changer not only for Ethiopia but also for other developing countries in similar economic situations.
Reuters contributed to this article.
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