Ethiopia has reached an Agreement in Principle with the Official Creditor Committee on a debt treatment plan under the G20 Framework, addressing USD 8.4 billion in debt. This includes a USD 3.5 billion reduction in debt service and USD 2.5 billion debt service relief planned from 2023 to 2028, aiming to enhance public investments.
Ethiopia has successfully attained an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) concerning a significant debt treatment plan under the G20 Common Framework. This plan pertains to approximately USD 8.4 billion in public debt. The Ministry of Finance has announced that this agreement is part of a broader financing arrangement with the International Monetary Fund (IMF).
Under the terms of the agreement, Ethiopia has pledged to negotiate for debt relief with external creditors, targeting a USD 3.5 billion reduction in debt service throughout the program period. The AIP is crucial in facilitating this goal, offering around USD 2.5 billion in debt service relief from 2023 through 2028.
The overarching objective of this agreement is to streamline Ethiopia’s external repayment obligations, significantly reduce debt expenses, and redirect more resources toward public investments in accordance with Ethiopia’s Perspective Development Plan.
Ethiopia’s Agreement in Principle with the Official Creditor Committee marks a vital progression towards substantial debt relief. This initiative, valued at approximately USD 8.4 billion, is designed to alleviate financial pressures by reducing debt service costs and fostering economic development through increased public investment. Through negotiations with external creditors, Ethiopia hopes to successfully implement its debt management strategy within the stipulated timeline.
Original Source: www.2merkato.com
