Ethiopia has signed an Agreement in Principle with the Official Creditor Committee on a debt treatment plan for USD 8.4 billion. The arrangement entails negotiating a USD 3.5 billion reduction in debt service, providing USD 2.5 billion relief from 2023 to 2028, ultimately aiming to improve public investment resources.
Ethiopia has successfully secured an Agreement in Principle (AIP) with its Official Creditor Committee (OCC) regarding its debt treatment plan, which encompasses approximately USD 8.4 billion in public debt. This agreement is part of Ethiopia’s broader strategy under the G20 Common Framework, focused on financial stability and debt negotiations.
The Ministry of Finance has announced that Ethiopia will actively engage in negotiations with external creditors to achieve a notable reduction in debt service, targeting a USD 3.5 billion decrease over the program period. This AIP represents a crucial milestone in this process, facilitating around USD 2.5 billion in debt service relief from 2023 to 2028.
The primary objective of this agreement is to enhance Ethiopia’s external repayment capacity, thereby substantially reducing debt costs. Additionally, it aims to increase the allocation of financial resources to public investments, in line with Ethiopia’s Perspective Development Plan, fostering economic growth and development.
In conclusion, Ethiopia’s recent Agreement in Principle with the Official Creditor Committee marks a significant advancement in its debt relief efforts. Targeting a substantial reduction in debt service, this agreement is expected to ease financial burdens and redirect funds towards essential public investments. As Ethiopia pursues its economic development objectives, this strategic partnership with creditors is crucial for ensuring long-term financial stability.
Original Source: www.2merkato.com
