Achilles HeelEthiopia’s plan to seek debt restructuring under a G20 common framework agreed in November triggered a sell-off in African debt at the end of January on fears of a contagion effect. But such a debt restructuring for Ethiopia would face barriers due a lack of transparency, analysts say. While he hasn’t seen any firm evidence of Chinese loans to Ethiopia being understated, there is “less transparency” on Chinese lending, he says. “The mode and channels through which Chinese lending is made to poor countries present thorny challenges for the effective functioning of the DSSI,” he says. “Perversely, what may emerge, in effect, is a dual track paradigm for debt relief, one pertaining to bona fide official flows under the auspices of the DSSI, and the other focused on Chinese debt,” he says.

Source: Ethiopian News February 08, 2021 11:26 UTC