Ethiopia will save $4.9 billion once it completes its ongoing debt restructuring exercise, according to State Finance Minister Eyob Tekalign. The country, East Africa’s largest economy, resumed its long-delayed debt overhaul last week after securing a $3.4 billion financing program from the International Monetary Fund (IMF). The agreement follows Ethiopia’s decision to adopt a market-determined foreign exchange rate, a key IMF recommendation. Following the move, the country’s currency dropped 31.5% against the dollar, leading to several analysts expressing concern that inflation could surge. Despite this, Prime Minister Abiy Ahmed argued that the reforms are crucial, stating that they will boost the private sector and long-term growth. As of March, the East African country owed over $28 billion to external creditors, 5% of which was to private creditors. With the new agreement, the nation will be able to negotiate new repayment deals with creditor countries.
SOURCE: AFRICA NEWS