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.

Source: Ethiopian News December 26, 2023 12:12 UTC