Ethiopia seeks extension of G20 debt service suspension

By bne IntelliNews June 26, 2024

Ethiopia is reportedly lobbying for an extension of the G20's debt service suspension, initially set to expire on June 30, as it aims to secure more time to stabilise its financial situation.

Finance Minister Eyob Tekalegn disclosed to the Budget and Finance Affairs Standing Committee during a budget hearing on June 24 that the debt service suspension is expected to be prolonged beyond its current deadline.

The G20's decision to suspend debt service for Ethiopia has facilitated the nation's negotiations under the Common Framework (CF), designed to restructure debt for low-income countries. Additionally, the suspension has supported ongoing discussions with the International Monetary Fund (IMF), which are critical for unlocking financial aid.

Eyob indicated that the CF negotiations are on a positive trajectory. "We expect to continue on this path in the coming months, which could lead to a further extension of the debt service suspension," he said.

Ethiopia was the first country to seek debt relief under the Common Framework in early 2021, but the process, severely hindered by the two-year war that broke out in Tigray in 2020, has stretched over three years without resolution.

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