The International Monetary Fund (IMF) has finalized a staff-level agreement with Ethiopia regarding the fourth review of its $3.4 billion Extended Credit Facility (ECF) arrangement. This agreement opens the path for a $261 million disbursement, increasing the total IMF support to roughly $2.13 billion.
The IMF’s assessment acknowledges Ethiopia’s progress in its Homegrown Economic Reform (HGER) agenda, noting positive macroeconomic developments since the ECF’s inception in July 2024. Key indicators show robust growth, driven by significant outputs in gold, electricity, and agriculture. Goods exports have more than doubled, inflation rates have decreased, and government revenues have seen strong growth. The Ethiopian authorities are working on enhancing the foreign exchange market, modernizing monetary policy, mobilizing fiscal revenue, and advancing financial regulations.
The IMF stresses the need to maintain reform momentum to achieve macroeconomic stability and support growth and poverty alleviation. A strict monetary policy is essential to control inflation and ensure price stability, alongside efforts to improve competition and efficiency in the foreign exchange market. Additionally, prudent fiscal management and effective resource mobilization are vital for sustainability, and fostering a better business environment is crucial for attracting private investment.
Progress toward debt treatment and sustainability is ongoing. A Memorandum of Understanding concerning key debt treatment terms was established in July 2025 between Ethiopia’s authorities and the G20 Common Framework’s Official Creditor Committee, with plans to finalize bilateral agreements with official creditors next.
The IMF team commended the Ethiopian leadership for their constructive dialogue and commitment to the economic program, highlighting successful discussions with Finance Minister Ahmed Shide, National Bank Governor Eyob Tekalign, and various private and development sector stakeholders.
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