Ethiopia has secured an Agreement in Principle with its Official Creditor Committee, outlining financial terms for a debt treatment plan that encompasses USD 8.4 billion of public debt. The deal aims to facilitate a USD 3.5 billion reduction in debt service and promises USD 2.5 billion in relief by 2028, promoting public investment aligned with its development goals.
Ethiopia has successfully reached an Agreement in Principle (AIP) with its Official Creditor Committee (OCC), which outlines the crucial financial parameters for a debt treatment plan as part of the G20 Common Framework. This plan specifically targets approximately USD 8.4 billion in outstanding public debt. The Ethiopian Ministry of Finance indicated that this agreement marks a significant advancement in the nation’s efforts to manage its debt, particularly as part of a broader financing strategy agreed upon with the International Monetary Fund (IMF).
Under this agreement, Ethiopia has pledged to negotiate with its external creditors to secure a reduction of USD 3.5 billion in debt service throughout the program period. The AIP with the OCC grants Ethiopia approximately USD 2.5 billion in relief from debt service obligations between the years 2023 and 2028.
This strategic agreement is designed to enhance Ethiopia’s external repayment profile while substantially decreasing debt costs. By doing so, it will enable the government to redirect more financial resources toward public investments, which align with Ethiopia’s long-term Perspective Development Plan.
In conclusion, Ethiopia’s recent Agreement in Principle with the Official Creditor Committee marks a significant step towards achieving substantial debt relief. The commitment to negotiating a USD 3.5 billion reduction in debt service will ease financial burdens and support public investment initiatives, fostering sustainable economic growth as outlined in Ethiopia’s Perspective Development Plan.
Original Source: www.2merkato.com
