A committee of Ethiopia’s bondholders has criticized an International Monetary Fund (IMF) report, arguing it falsely portrays the country as insolvent.
The East African nation defaulted on its $1 billion bond in December 2023, and debt restructuring talks have since been slow and contentious.
The IMF’s recent analysis suggests Ethiopia faces a solvency crisis, which would require lenders to accept losses on their loans.
Bondholders argue Ethiopia is instead facing a liquidity issue, meaning the country only needs more time to repay its obligations.
“The Committee disagrees with the conclusions reached by the IMF in the staff report,” the bondholder group stated on Monday.
The committee accused the IMF of underestimating Ethiopia’s economic recovery and failing to recognize growth in key exports like gold and coffee.
The report’s conclusions “artificially create a solvency issue for Ethiopia,” the committee asserted, calling the analysis flawed and misleading.
Neither the IMF nor the Ethiopian government have responded to requests for comment regarding the bondholders’ allegations.
Ethiopia delayed restructuring its foreign debt until securing a $3.4 billion IMF bailout in July 2024, which required major economic reforms.
The Ethiopian government has argued that bondholder losses are inevitable, proposing an 18% reduction in debt repayments last year.
Finance Minister Ahmed Shide recently stated that talks with creditors over the debt restructuring are in their “final stages.”
Some World Bank officials have also questioned the IMF’s assessment, but the Fund insists the World Bank approved the analysis.
