IMF Reaches Staff-Level Agreement on a US$2.9 Billion Financing Package with Ethiopia
IMF News, December 11, 2019
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Bibliographic details
- Published: December 11, 2019
Mission and context
- An International Monetary Fund (IMF) staff team led by Ms. Sonali Jain-Chandra visited Addis Ababa from October 29 to November 8, 2019 to hold discussions on the 2019 Article IV Consultation for Ethiopia, and the authorities’ request for a three-year US$2.9 billion (SDR 2.1049 billion) financing package that could be supported by the IMF under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF).
- Discussions with the authorities continued after the mission.
- End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
- Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
Staff-level agreement and next steps
- The Ethiopian government and the IMF staff team reached preliminary agreement, subject to approval by the Fund’s Executive Board, on policies that could constitute the basis for Ethiopia’s new program supported by the ECF and EFF arrangements.
- “We will submit the program request to the Executive Board for its consideration.”
Objective of the proposed program
- The overall objective of the program would be to support implementation of the authorities’ Homegrown Economic Reform Program.
Proposed program pillars
- The Fund-supported program would consist of five main pillars:
- (1) durably address the foreign exchange shortage and transition to a more flexible exchange rate regime;
- (2) strengthen oversight and management of state-owned enterprises to contain debt vulnerabilities;
- (3) strengthen domestic revenue mobilization and expenditure efficiency to create space for adequate poverty-reducing and essential infrastructure spending;
- (4) reform the financial sector to support private investment and modernize the monetary policy framework;
- (5) strengthen the supervisory framework and financial safety nets.
International Monetary Fund, Press Release No. 19/450, December 11, 2019.