Ethiopia has reached an Agreement in Principle with its Official Creditor Committee on a debt treatment plan covering USD 8.4 billion. The Ministry of Finance announced plans for negotiating a USD 3.5 billion reduction in debt service over the program period and expects USD 2.5 billion in relief between 2023 and 2028, enhancing financial management and public investment.
Ethiopia has successfully arrived at an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) regarding a debt treatment plan under the G20 Common Framework, which encompasses around USD 8.4 billion in public debt. This significant cooperation is aimed at facilitating better financial management for the country.
According to a recent announcement from the Ministry of Finance, Ethiopia will negotiate with its external creditors to secure debt relief that will amount to USD 3.5 billion over the program period. This negotiation is part of a larger financing package, which has already been established in collaboration with the International Monetary Fund (IMF).
The AIP with the OCC is positioned as a crucial advancement towards this objective, expected to yield roughly USD 2.5 billion in debt service relief from 2023 to 2028. This initiative is intended to enhance Ethiopia’s external repayment structure and will significantly decrease debt servicing costs, thus allocating more resources for public investments that are consistent with Ethiopia’s Perspective Development Plan.
In summary, Ethiopia’s Agreement in Principle with the Official Creditor Committee signifies a vital step toward implementing a comprehensive debt treatment plan. The expected relief of approximately USD 2.5 billion will enable Ethiopia to optimize its financial resources and promote public investments, ultimately fostering economic development aligned with the nation’s long-term strategic objectives.
Original Source: www.2merkato.com
