Ethiopia clinches deal with IMF for $3.4B in financing

ADDIS ABABA, Ethiopia

Ethiopia has secured an agreement with the International Monetary Fund (IMF) for a new financing program valued around $3.4 billion, the IMF announced Monday.

The new four-year loan program will help support the country's economic reform agenda.

The approval of the loan agreement allows for the immediate disbursement of around $1 billion, the IMF said in a statement.

The agreement follows extensive talks between Ethiopia and the IMF to secure more funding and restructure the country’s debt.

As part of the discussions, Ethiopia has taken significant steps, such as the central bank allowing the country’s currency to float, which has led to a 30% devaluation of the Ethiopian birr against the US dollar.

“The recent measures to decisively tackle macroeconomic imbalances, including moving to a market-determined exchange rate, removing current account restrictions, and modernizing the monetary policy framework to control inflation are critical steps forward,” the IMF said in a statement.

In return for these measures, Ethiopia is expected to receive a $10.7 billion loan package from the IMF, the World Bank, and other creditors.