Ethiopia became Africa’s third default in as many years on Tuesday after it failed to make a 33-million-dollar “coupon” payment on its only international government bond. Africa’s second most populous country announced earlier this month that it intended to formally go into default, having been under severe financial strain in the wake of the Coronavirus (COVID-19) pandemic and a two-year civil war that ended in November 2022. It had been supposed to make the payment on Dec. 11, but technically had up until Tuesday to provide the money due to a 14-day ‘grace period’ clause written into the 1 billion dollars bond. On Dec. 8, the government said parallel negotiations it had been having with pension funds and other private sector creditors that hold its bond had broken down. Credit ratings agency S&P Global then downgraded the bond, to “Default” on Dec. 15 on the assumption that the coupon payment would not be made.

Ethiopia’s financial woes deepened as the nation defaulted on its bond payments, failing to meet a $33 million coupon obligation due on December 11. “Ethiopia is committed to treating all creditors equally,” affirmed Finance Minister Ahmed Shide, reflecting the government’s stance on the non-payment of the coupon. “Ethiopia has defaulted on her bond payments,” financial analyst, Kalu Aja noted. “Africa’s credit risk rating which was up will rise further, this means it will now be very difficult for African debt especially Nigeria to find buyers. This default marks a critical juncture for Ethiopia’s economy, with implications resonating beyond its borders, raising concerns about Africa’s credit rating and the accessibility of credit for other nations in the region.

Ethiopia garnered six foreign investment initiatives in 2022, with Safaricom Ethiopia being a notable contributor Photo: Reuters)Addis Abeba – Amid global economic shifts and domestic instability, Ethiopia is contending with a marked decrease in foreign direct investment (FDI), as detailed in a new report by Ernst & Young. Tanzania saw significant growth in foreign investment, reaching pre-pandemic levels with 21 projects worth $1.3 billion, creating 4,566 jobs. The report from Ernst & Young points to balance of payments issues and the risk of sovereign default amid rising inflation as challenges for Ethiopia. However, the report underscores that such economic challenges could overshadow the investment climate, deterring foreign investment and complicating economic management. In addition to inflation, Ethiopia faces pressures due to currency depreciation.

Focusing first on the war in Eastern Europe, the immediate negative effect of the Russia-Ukraine war is the shortage of grain supply to the world from Ukraine, as farming has been impossible. Evidential of the scenario above is a recent report by the Council of the EU and the European Council that has concluded that:“Due to the war, Ukraine, a leading grain exporter, has seen a dramatic drop in its exports. Enough has been written and discussed about the war in Eastern Europe. According to the ICC report below, Africa and particularly Nigeria are more susceptible to collateral damage from the Israel-Gaza war. This subdued atmosphere of Xmas necessitates the creation of a new vocabulary to aptly capture the socio-economic challenges faced by my compatriots.

Get Breaking NewsSign up now to get our FREE breaking news coverage delivered right to your inbox.

Ethiopia joined Ghana and Zambia as Africa’s latest defaulter after it failed to make interest payment of $33 million on its $1 billion bond following the expiration of a grace period on Monday. The nation, located in the Horn of Africa, was obligated to pay a $33 million coupon on Dec. 11. Ethiopia had previously reached an agreement with bilateral creditors last month to suspend debt payments. However, the face value is set to remain at $1 billion, ensuring that creditors will not be required to accept a so-called haircut on their holdings. The report further stated that around 60% of low-income countries are either at risk of debt distress or likely already experiencing debt distress.

Ethiopia Declares Sovereign Default, Echoing Financial Strain Across AfricaEthiopia, the second most populous nation in Africa, has officially declared a sovereign default, marking the continent’s third such event in as many years. This move follows the nation’s failure to fulfil a $33 million coupon payment on its single international government bond. This financial challenge has been exacerbated by the aftermath of the COVID-19 pandemic and a two-year civil conflict that concluded in November 2022. An Anticipated DefaultThe Ethiopian government had previously indicated its intent to declare a default due to the country’s severe financial strain. With Ethiopia now joining Zambia and Ghana in a major restructuring under the Common Framework, this situation sheds light on the economic challenges faced by African nations.

In all that Souk Bō’hēmian does, their goal is to introduce new and different cultures to the community. They partner with local and global artisans to bring aspirational ready-to-wear pieces, home goods, small-batch jewelry, and handmade accessories to curate every aspect of life. Wander in our minimal palettes and global aesthetics, as you would a bazaar in North Africa or your favorite local market. Their unique, artisan-made candle holder is a great conversation piece for any tabletop. Visit the website to shop and subscribe to the newsletter.

Ethiopia has joined Zambia and Ghana as Africa’s latest debt defaulters after failing to make an interest payment to its external creditors following the end of the grace period on December 25, 2023. The development underscores the challenges faced by African countries in servicing external debt. Ethiopia has been grappling with material decline in external liquidity, significant external financing gaps, and the government’s participation in the G20 Common Framework (CF) debt relief initiative. About half of Ethiopia’s debt is external debt. According to IMF data, Ethiopia’s external debt as a percentage of its GDP is 23%, lower than Kenya’s 31.2%.

LONDON (Reuters) - Ethiopia became Africa's third default in as many years on Tuesday after it failed to make a $33 million "coupon" payment on its only international government bond. Africa's second most populous country announced earlier this month that it intended to formally go into default, having been under severe financial strain in the wake of the COVID-19 pandemic and a two-year civil war that ended in November 2022. It had been supposed to make the payment on Dec. 11, but technically had up until Tuesday to provide the money due to a 14-day 'grace period' clause written into the $1 billion bond. Credit ratings agency S&P Global then downgraded the bond, to "Default" on Dec. 15 on the assumption that the coupon payment would not be made. (Reporting by Rachel Savage and Karin Strohecker, Additional Reporting by Dawit Endeshaw in Addis Ababa, Editing by Marc Jones and Aurora Ellis)

At least 160 people were killed in attacks by armed groups between Saturday evening and Monday in several villages in Plateau State, central Nigeria, local authorities announced on Monday. On Sunday, Plateau State Governor Caleb Mutfwang described the armed action as "barbaric, brutal and unjustified". "Proactive measures will be taken by the government to curb the ongoing attacks on innocent citizens", said Gyang Bere, the governor's spokesman. The NGO Amnesty International reacted to the violence on its X account, judging that "the Nigerian authorities have consistently failed in their attempts to put an end to these frequent attacks in Plateau State". The populations of north-western and central Nigeria live in terror of attacks by jihadist groups and criminal gangs who pillage villages and kill or kidnap their inhabitants.

Ethiopia and Djibouti: A Dynamic Diplomatic DanceMarking a significant milestone in the business and diplomatic relations between Djibouti and Ethiopia, the Djibouti Chamber of Commerce recently welcomed a delegation from the Somali region of Ethiopia. This strategic interaction was aimed at bolstering trade exchanges, unearthing new business opportunities, and fostering mutually advantageous partnerships. Strengthening Bilateral RelationsIn what appears to be a calculated move to enhance bilateral relations, the President of Djibouti’s Parliament made a working visit to Ethiopia. Religion and GovernanceFurther demonstrating Ethiopia’s commitment to strengthening its internal frameworks, the Ethiopian Catholic Church (ECC) made a significant announcement. The ECC unveiled its strategic blueprint for the next decade, labeled the ECC Ten-Year Plan (ECC-TYP).

The Battle Against Corneal Blindness in Ethiopia: Challenges and VictoriesIn Ethiopia, the battle against corneal blindness is a formidable challenge, affecting an estimated hundreds of thousands. The Ongoing Challenge: Demand Outweighs SupplyHowever, the demand for corneal transplants far outpaces the supply. This imbalance is magnified by a severe shortage of corneal transplant ophthalmologists, with only 11 professionals serving the entire country. Support on the Ground: Ethiopian National Cornea Transplant Recipients and Volunteers AssociationIn response, the Ethiopian National Cornea Transplant Recipients and Volunteers Association, formed by transplant recipients, provides holistic support to those affected by corneal blindness. Although the journey ahead is steep, the strides made by the Eye Bank of Ethiopia provide a beacon of hope for those grappling with corneal blindness.

Ethiopia Joins Ranks of Defaulting Nations: A Test of Financial Stability and Debt ManagementMarking a distressing turn of events, Ethiopia has joined the ranks of defaulting nations in Africa, after falling short of fulfilling a scheduled interest payment post the termination of a grace period on Monday. An Emerging DefaulterEthiopia is following in the footsteps of Ghana and Zambia, defaulting on interest payments within a short span. The government has already reached an agreement with bilateral creditors for the suspension of debt payments. Ethiopia’s debt to GDP ratio stands at 46.37, lower than Kenya’s 67.94, and significantly lower than that of most advanced countries. Approximately half of Ethiopia’s debt is external debt, pushing the nation to the verge of default due to liquidity constraints and high debt repayments relative to its economic capabilities.

The CircuitHosted by high-profile journalist Emily Chang, The Circuit is a fast-paced, dynamic series that lives at the intersection of culture, tech, entertainment, and business. Every week, Chang will go on location to meet the world’s most fascinating founders, influencers, and innovators, conducting intimate interviews and bringing audiences behind the scenes of the most impactful stories, launches, and trends