June 20, 2024

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Ethiopia Paid 10% of Its Due Loan Payment in 9 months

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On Wednesday, the Finance Minister of Ethiopia, Ahmed Shide, submitted the 9-month report on the Ethiopian economy to the House of People’s Representatives.

According to the minister, Ethiopia paid only 10% of its loan obligations in the first nine months of the fiscal year. Ethiopia only paid $52.1 million in loan repayments during the July-March period, despite having an obligation of $512 million.

This was made possible by a debt restructuring agreement reached last year between Ethiopia and some of its creditors, which allowed the country to temporarily suspend debt payments.

The Paris Club announced in November last year the suspension of debt repayments from January 2023 through December 2024. China had already agreed on a separate bilateral deal with Ethiopia.

Finance Minister Ahmed Shide said “We have saved in our budget allocated to loan repayment due to the two-year interim debt suspension by the Common Framework and China amounting to $1.44 billion. We are also in negotiations for an interim debt repayment suspension of $0.49 billion. This has also helped us to narrow down the budget deficit.”

State Minister of Finance Eyob Tekalign proposed tackling the budget shortfall by encouraging regional governments to boost revenue generation and improve their financial independence to address the deficit.

In the same presentation, Ethiopian Finance Minister, Ahmed Shide reports an increase in overall debt. Reportedly the overall debt of Ethiopia has reached $65.7 billion, approximately 40.2% of the gross domestic product. Read More…