The IMF has approved a $3.4 billion loan for Ethiopia to help with its economic challenges over the next four years. This funding aims to support Ethiopia’s reforms as the country deals with severe shortages of foreign currency and high inflation, partly due to a recent civil war in Tigray that ended in 2022.
Kristalina Georgieva, the IMF’s managing director, called the loan a “landmark moment” for Ethiopia and praised its commitment to making significant changes.
This announcement followed Ethiopia’s decision to let its currency, the birr, lose nearly a third of its value against the dollar, a crucial step in securing the loan.
The IMF will release about $1 billion immediately to help with Ethiopia’s financial needs and support its budget. The country has also been working with international creditors to restructure its debt, as it defaulted on its sovereign bond last December.
Ethiopia’s new economic plan, backed by the IMF, is expected to boost private-sector growth and increase spending on health, education, and social services.
The IMF hopes this support will also attract more funding from other international partners and help complete the ongoing debt restructuring.
Ethiopia is seeking over $10 billion in support from global financial institutions like the IMF and World Bank.
Credit : BBC
https://www.bbc.com/news/articles/cn074en1z7mo