On January 17, 2025, the executive board of the International Monetary Fund (IMF) approved the second review of Ethiopia's financing program, facilitating a disbursement of approximately $250 million. This decision is part of a broader four-year, $3.4 billion program established last July, aimed at stabilizing the nation’s economy through significant reforms.
Ethiopia's government has undertaken extensive measures, including the floatation of its birr currency, to enhance its debt restructuring efforts. The IMF noted that the authorities are actively working to restore debt sustainability and are making progress in securing a debt treatment under the Common Framework.
The Fund's assessment indicates that Ethiopia's economic performance has exceeded expectations, with inflationary pressures remaining manageable and hard currency reserves increasing at a rate above projections. Following a series of rapid reviews to monitor the impact of the reforms, the IMF plans to revert to a standard six-month review schedule.
Despite the positive outlook, the IMF's involvement in Ethiopia's debt restructuring has faced scrutiny, particularly from some World Bank staff who have raised concerns regarding the Fund's debt sustainability assessment.