IMF Backs Ethiopia with $3.4 Billion to Anchor Private Sector-Driven Growth
The International Monetary Fund (IMF) has approved a $3.4 billion financing package under its Extended Credit Facility (ECF) for Ethiopia, with an immediate disbursement of $1 billion. The four-year arrangement aims to support Ethiopia’s Homegrown Economic Reform (HGER) Agenda, which targets macroeconomic stability, external debt sustainability, and inclusive, private sector-driven growth.
The program is expected to attract additional financial support from development partners and creditors, further boosting Ethiopia’s economic stability. Key measures include a shift to a market-determined exchange rate, removal of current account restrictions, and modernization of monetary policy to curb inflation.
To protect vulnerable communities, the government plans to expand its targeted cash transfer program and implement temporary subsidies for essentials like fuel and fertilizers. The reforms also include increasing fiscal revenues, ensuring sustainable debt management, and advancing power sector adjustments.
The IMF praised Ethiopia’s efforts to address macro-financial vulnerabilities, including the recapitalization of the Commercial Bank of Ethiopia, while emphasizing the need to strengthen governance, public service delivery, and financial sector reforms.