Following its successful debt relief arrangement with China, Ethiopia is now actively pursuing similar debt relief agreements with other creditors, according to comments made by the International Monetary Fund’s deputy director for Africa, Annalisa Fedelino, during the IMF’s annual meetings in Marrakech, Morocco. The country had previously sought debt restructuring under the Group of 20’s Common Framework in early 2021, a move targeted at restructuring government debt for low-income nations. Despite significant progress in this direction, challenges persisted, compounded by a devastating two-year civil war that erupted in November 2020, resulting in widespread casualties and the displacement of millions. In August, Ethiopian authorities disclosed that China had granted the country permission to suspend debt payments until July 2024, providing substantial relief as part of the agreement announced earlier. Fedelino acknowledged Ethiopia’s ambition to transition to a market-determined exchange rate, emphasizing the need for preparatory measures before embarking on such a significant reform.
