Ethiopia reached an Agreement in Principle with the Official Creditor Committee to address USD 8.4 billion in debt. This plan includes a USD 3.5 billion debt service reduction goal and aims for USD 2.5 billion in relief from 2023 to 2028, allowing more funds for public investments aligned with national development objectives.
Ethiopia has successfully negotiated an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) regarding a debt treatment plan. This agreement targets approximately USD 8.4 billion in outstanding public debt under the G20 Common Framework. The Ministry of Finance announced that this deal is part of a broader financing package, which includes a commitment to negotiating further debt relief.
The agreed terms stipulate that Ethiopia will pursue a USD 3.5 billion reduction in debt service throughout the program period. The AIP will provide an estimated USD 2.5 billion in debt service relief from 2023 to 2028, easing the financial burden on the country. This agreement is designed to improve Ethiopia’s external repayment structure and decrease debt costs significantly.
Additionally, the relief from debt services will allow Ethiopia to redirect more resources towards public investments that align with its Perspective Development Plan, fostering growth and development in various sectors. The positive impact of this agreement could enhance Ethiopia’s economic stability and public sector funding.
Ethiopia’s agreement with the Official Creditor Committee marks a significant step towards achieving financial relief and stabilizing its debt situation. With plans to reduce debt service by USD 3.5 billion and negotiate a structured debt treatment plan, Ethiopia aims to enhance its investment capacities and economic growth, ultimately supporting public sector development initiatives.
Original Source: www.2merkato.com
