Ethiopia aims to make “tangible progress” by December in reaching an agreement with its creditor nations. The government shared this in a presentation to private bondholders on Tuesday, as it looks to move forward with its debt restructuring efforts.
The country became Africa’s third default in three years in December 2023, pausing debt restructuring talks to secure a $3.4 billion program with the International Monetary Fund (IMF).
Ethiopia plans to sign bilateral agreements with each creditor once a memorandum of understanding (MoU) is reached, the presentation stated. It also invited bondholders to negotiate alongside creditor nations.
The IMF clarified it has no role in the negotiations, and the Paris Club did not comment on the matter. Ethiopia’s State Minister of Finance, Eyob Tekalign, led the presentation, along with a legal representative from White & Case.
Illustrating potential restructuring terms, Ethiopia proposed an 18% haircut on its outstanding dollar bond. Foreign bondholders, owning about 40% of the bond, remain disappointed over the haircut discussions.
External debt stands at $28.9 billion, with $7.4 billion owed to China and smaller amounts to Saudi Arabia and Paris Club nations.
