ADDIS ABABA – The Ministry of Finance has announced an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) under the G20 Common Framework, addressing approximately 8.4 billion USD in outstanding public debt.
The agreement commits Ethiopia to negotiating a debt treatment with its external creditors, aiming for a 3.5 billion USD reduction in debt service over the program period. This is intended to restore debt sustainability, aligning with a financing package already agreed upon with the International Monetary Fund (IMF).
According to a press release from the Ministry of Finance, the AIP will deliver approximately 2.5 billion USD in debt service relief between 2023 and 2028, significantly smoothing Ethiopia’s external redemption profile and reducing its cost.
Ethiopia expressed gratitude to the OCC co-chairs, China and France, and all OCC members for their support in reaching the agreement. The government believes this debt treatment will enable the allocation of additional financial resources to critical public investments within Ethiopia’s Perspective Development Plan.
The agreement is also expected to support ongoing engagement with external commercial creditors, including bondholders. Ethiopia reaffirmed its commitment to transparency, comparable treatment of all participating creditors, and adherence to debt sustainability targets under its IMF-supported program.
Finance Minister Ahmed Shide stated: “This agreement marks a significant milestone in our efforts to normalize our relations with international partners and deliver economic stability to the Ethiopian people. We extend our sincerest appreciation to the OCC and its co-chairs for their unwavering support in resolving our country’s public debt situation.”
The terms of the AIP will be further detailed and formalized in a Memorandum of Understanding (MoU) between Ethiopia and its official bilateral creditors, followed by bilateral agreements with each OCC member. The government anticipates prompt implementation of the agreed terms.
BY STAFF REPORTER
THE ETHIOPIAN HERALD SATURDAY 22 MARCH 2025
