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.

Source: Ethiopian News December 25, 2023 19:18 UTC