IMF approves $3.4b for Ethiopia

The International Monetary Fund (IMF) Executive Board has approved a four-year Extended Credit Facility (ECF) arrangement for Ethiopia worth SDR 2.556 billion (approximately US$3.4 billion).

This approval allows for an immediate disbursement of SDR 766.75 million (about US$1 billion) to address Ethiopia’s balance of payments needs and support the budget.

The funding supports Ethiopia’s Homegrown Economic Reform (HGER) Agenda, which aims to address macroeconomic imbalances, restore external debt sustainability, and promote private sector-led growth.

Key policy measures include moving to a market-determined exchange rate, modernising the monetary policy framework to control inflation, and eliminating monetary financing of the budget.

The ECF arrangement is expected to attract additional external financing from development partners and creditors. The IMF commends Ethiopia’s commitment to transformative reforms and highlights the importance of sustaining supportive macroeconomic policies to ensure success. The programme also emphasises the strengthening of social safety nets to protect vulnerable households during the reform process.

Attribution: IMF