ADDIS ABABA: IMF team and Ethiopian authorities have reached staff- level agreement on the first review of the four-year 3.4 billion USD Extended Credit Facility (ECF) arrangement.
Formal completion of the review by the IMF Executive Board would give Ethiopia access to financing of about 345 million USD.
According to the press release sent to the Ethiopian Press Agency, the IMF staff team led by Alvaro Piris paid a visit to Addis Ababa from September 17 to 26, 2024 to discuss progress on reforms and the authorities’ policy priorities in the context of the first review of Ethiopia’s economic program supported by the IMF’s Extended Credit Facility.
Ethiopia’s move towards the implementation of its homegrown economic reform program, including the adoption of a floating exchange rate is also appreciated by the IMF, adding the exchange rate in the official market has largely closed the gap to the parallel market, with little disruption to the broader economy.
Concluding the visit, Piris stated : “The IMF staff team and the Ethiopian authorities have reached staff-level agreement on the first review of Ethiopia’s economic program under the ECF arrangement.”
“The agreement is subject to approval of IMF management and the Executive Board in the coming weeks. Upon completion of the Executive Board review, Ethiopia would have access to SDR 255.60 million (equivalent to about 345 million USD).”
The new exchange rate regime, as to Piris, is alleviating the acute shortage of foreign exchange that previously existed, lifting a significant impediment to economic activity.
“The homegrown economic reform plan will help anchor macroeconomic stability and support economic growth. Continued tight monetary policy and the end of monetary financing of government will reduce inflation while a temporary fiscal spending package will help cushion the socio-economic impact of the reforms.”
The team also acknowledged the Ethiopian authorities for their commitment to ensure the success of the IMF-supported economic program, Piris underlined.
It was stated that the IMF team has met with Ethiopian higher officials including Ahmed Shide, the Minister of Finance, Mamo Mihretu, Governor of the National Bank of Ethiopia, EyobTekalign, State Minister of Finance, and other senior officials.
The team also had productive discussions with banks and private companies, the statement disclosed.
BY DANIEL ALEMAYEHU
The Ethiopian Herald September 29/2024
