Ethiopia‘s finance ministry announced on Friday that it has achieved a preliminary agreement with its creditors to restructure its debt for $8.4 billion.

Starting in 2021, the East African country has been negotiating with its creditors to write off a portion of its $30 billion external debt.

At the end of 2023, Ethiopia, whose economy was severely impacted by the COVID-19 pandemic, the conflict between Russia and Ukraine, and a catastrophic civil war in 2020–2022, fell behind on some of its loan payments.

In a Facebook message, Finance Minister Ahmed Shide said the new in-principle agreement “marks a significant milestone in our efforts to normalize our relations with international partners and deliver economic stability to the Ethiopian people.”

The G20 “Common Framework” was used to discuss the restructuring. It was established in 2020 by the wealthiest nations in the world to assist financially troubled nations in cancelling part of their debts under rigorous guidelines.

Ethiopia agreed to liberalize its currency, and the International Monetary Fund authorised a $3.4 billion loan programme in July. Inflation in the nation is still high and is predicted to reach 23.3% in 2025.

Source: Newscentral