Ethiopia Secures €28.5 Million from AFD to Bolster Economic Reforms Amid Debt Challenges

Ethiopia has secured a €28.5 million financial agreement with the French Development Agency (AFD) to support its ongoing economic reform program. The funding includes €25 million for budget support and €3.5 million for technical assistance. This initiative aims to address macroeconomic imbalances, restore external debt sustainability, and foster private sector-led growth. Ethiopia faces economic challenges including high inflation, currency shortages, and significant external debt, having defaulted on its debt in December 2023. The government has since implemented reforms, including liberalizing the exchange market and fiscal adjustments, supported by a $3.4 billion agreement with the IMF in July 2024. The AFD plans to continue supporting Ethiopia, focusing on fiscal, financial, and administrative reforms, as well as key sectors like energy and logistics.