IMF, Ethiopia agree framework for review of loan agreements

NAIROBI (Reuters) – The International Monetary Fund announced on Tuesday that it had agreed on a plan for the completion of reviews of Ethiopia’s lending program, taking into account the impact of the coronavirus and the “situation internal security “of the country.

The logo of the International Monetary Fund (IMF) is seen outside the headquarters building in Washington, United States, September 4, 2018. REUTERS / Yuri Gripas / File Photo

Adopted in December 2019, the three-year program amounts to $ 2.9 billion. Performance in this framework has been strong, the IMF said.

The reviews, for which the fund did not set a timeline, “focused on balancing the need to address the current challenges created by the pandemic and homeland security” while laying the groundwork for growth, the said. IMF deputy division chief Sonali Jain-Chandra in a statement.

The security situation “has created humanitarian and reconstruction needs that require policy adjustment and support from the international community,” she added.

The statement makes no direct reference to the war that began in November when Prime Minister Abiy Ahmed ordered an offensive against the Popular Front for the Liberation of Tigray (TPLF), the former ruling party in the northern region, after that regional forces attacked Federal Army bases there.

Abiy declared victory less than a month later, but low-level fighting continues.

Tuesday’s deal is subject to approval by the IMF’s executive board.

Finance Minister Ahmed Shide and State Finance Minister Eyob Tekalign Tolina did not respond to Reuters requests for comment.

The IMF has also said it welcomes Ethiopia’s request for “debt treatment under the G20 Common Framework”.

Ethiopia last month said it plans to restructure its sovereign debt under the framework, designed to help deal with economic pressures induced by COVID-19, and is examining all options.

The IMF has said economic growth is expected to be 2% in 2020/21, largely the effects of the pandemic, but is expected to rebound to 8.7% in 2021/22 in line with a global recovery.

Reporting by Omar Mohammed; edited by John Stonestreet

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