Students of the Ethiopian Aviation University attend their graduation ceremony in Addis Ababa on June 15, 2024. First inaugurated in 1964, the Ethiopian Aviation University is a strategic asset of the country national carrier that form Ethiopians and foreign pilots, cabin crew and technicians, making it one of the largest aviation training center in Africa. (Photo by Michele Spatari / AFP)
Addis Ababa, Ethiopia — Ethiopian Prime Minister Abiy Ahmed said on Thursday he was expecting about $10.5 billion in financial aid in the coming years once the country wraps up negotiations with international lending institutions.
Africa’s second most populous nation, battered in recent years by several armed conflicts, the Covid pandemic, and climate shocks, has been engaged in drawn-out talks seeking to secure a support programme from the International Monetary Fund (IMF).
There has been speculation that Ethiopia may have to devalue its currency, the birr, as a condition of IMF aid.
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“We have been negotiating with the IMF and World Bank on a wide range of issues,” Abiy said in an address to parliament, adding that both Ethiopia and the IMF “are stubborn.”
“Several of our proposals were finally accepted,” he said.
“When this process comes to a successful conclusion, and the reform is approved, we will receive $10.5 billion in the coming years.”
The IMF had no immediate response to AFP’s request for comment on Abiy’s remarks.
According to a source close to the matter, the program currently being negotiated with the IMF concerns around $3.5 billion in financial assistance, and any agreement could result in the release of an equivalent amount from the World Bank.
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Ethiopia has about $28 billion of external debt and is also grappling with sky-high inflation and a shortage of foreign currency reserves.
The landlocked country’s credit rating was downgraded to a partial default in December by international agency Fitch after it missed a $33 million coupon payment on a Eurobond.
The two-year conflict in the northern Tigray region which ended in November 2022 led to the suspension of numerous development aid programmes and budget assistance.
When he took office in 2018, Abiy pledged to embark on reforms of Ethiopia’s closed and state-dominated economy, but little has changed since then.