IMF staff and officials of Ethiopia have reached a staff-level agreement on economic policies. This agreement concludes the first review of a four-year Extended Credit Facility (ECF) arrangement worth $3.4 billion. If the IMF Executive Board approves it, Ethiopia will gain access to about $345 million in financing.
Ethiopia’s homegrown economic reform program is progressing well. The country adopted a floating exchange rate system in late July. This change has significantly narrowed the gap between the official and parallel markets, causing minimal disruption to the economy.
Successful reforms will strengthen Ethiopia’s macroeconomic stability, improve foreign exchange availability, and support sustainable growth. Before this agreement, a team from the IMF, led by Mr. Alvaro Piris, visited Addis Ababa, Ethiopia, from September 17 to 26, 2024. They assessed reform progress and discussed policy priorities during the first review of Ethiopia’s economic program supported by the IMF.
Mr. Piris stated that the agreement is pending approval from IMF management and the Executive Board. Upon completion of this review, Ethiopia will access SDR 255.60 million (about $345 million).
At the end of July 2024, the International Monetary Fund (IMF) has approved a significant loan of $3.4 billion to assist Ethiopia in its economic reform efforts. This four-year loan program, valued at SDR 2.556 billion (approximately 850% of Ethiopia’s quota), aims to provide immediate financial support and long-term stability for the country’s economy.
He highlighted that the transition to a market-based exchange rate is going well. This new exchange rate policy addresses previous foreign exchange shortages.
The IMF team thanked Ethiopian officials for their productive discussions, including meetings with the Finance Minister and National Bank Governor and engagements with banks and private sector representatives.
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