NAIROBI (Reuters) – The International Monetary Fund (IMF) wants to start talks with Ethiopia for a funding programme as soon as conditions permit, the fund said on Tuesday.
The Horn of Africa nation asked the IMF for a new loan programme late last year, just as France and China convened a creditor committee to try to rework its nearly $30 billion in external debt under the G20’s Common Framework.
The IMF would continue to cooperate closely with the Creditor Committee to provide technical support to the Common Framework process, it said in a statement.
It was also working on steps towards commencing discussions on an IMF programme “as soon as conditions allow,” it said, adding that the package was “essential to reduce debt vulnerabilities.”
The G20’s initiative, known as the Common Framework for Debt Treatments, is designed to reduce the overall debt burdens of poor countries as they deal with the impact of the COVID-19 crisis.
The IMF approved credit facilities for $2.9 billion for Ethiopia in December 2019, but it has not made any disbursements yet.
Economic growth in Ethiopia fell to 3.8% in the 2021/22 financial year, the IMF said, dragged by conflict in the northern region of Tigray, falling agricultural output, a drop in donor funding, drought, foreign exchange shortages and the effects of the war in Ukraine.
The fund’s growth figure for the period was lower than that of the finance ministry, which said the economy was estimated to have expanded by 6-7%.
The nation of 115 million has been one of the world’s fastest-growing economies in the past 15 years, bolstered by heavy infrastructure investment, but the COVID-19 pandemic and the armed conflict in Tigray, which has now subsided, curbed growth in the past two years.
(Writing by George Obulutsa; Editing by Duncan Miriri and Alex Richardson)
