ADDIS ABABA: Ethiopia’s creditors have extended a deadline for the country to reach a support deal with the International Monetary Fund, a source told AFP on Thursday. The Paris Club of creditors gave Addis Ababa until the end of June to agree on economic reforms with the IMF. Ethiopia had reached agreement with its international creditors at the end of November for a two-year suspension of debt repayments over 2023 and 2024.

The suspension came with a condition that the country of 120 million people strike a deal with the IMF before March 31. IMF experts left Addis on Tuesday after failing to reach agreement with the authorities. “There was a March 31 deadline to progress the talks between the IMF and the authorities, it has been extended until the end of June,” a source at the Paris Club told AFP. Ethiopian authorities have been very reluctant to devalue the local currency fearing already high inflation will skyrocket.

They also want to receive the bulk of any loans as soon as agreement is reached while the IMF wants to link tranches of payment to Addis meeting economic reform commitments. The World Bank puts Ethiopia foreign debt at US$28.61 billion. Prime Minister Abiy Ahmed pledged to reform Ethiopia’s closed and state-dominated economy when he took office in 2018. But little has changed with two years of domestic conflict from late 2020, drought and the impact of Russia’s invasion of Ukraine. — AFP