IMF Releases US$261m to Ethiopia After Reform Review
The Executive Board of the International Monetary Fund (IMF) has completed the fourth review of Ethiopia’s programme under the Extended Credit Facility (ECF), unlocking an immediate disbursement of about US$261 million to support the country’s balance of payments and fiscal needs.
The approval brings total IMF disbursements to Ethiopia under the 48-month arrangement to approximately US$2.18 billion. The ECF programme, approved in July 2024, is designed to support Ethiopia’s Homegrown Economic Reform Agenda, aimed at correcting macroeconomic imbalances and laying the foundation for private sector-led growth.
The IMF noted that Ethiopia’s programme performance remains broadly on track, with all quantitative performance criteria and most indicative targets met. Strong economic growth, rising exports, improved revenue mobilisation, increasing foreign exchange reserves and declining inflation have delivered better-than-expected macroeconomic outcomes, reflecting positive results from ongoing reforms.
The Fund emphasised that maintaining reform momentum will be critical to consolidating recent gains, sustaining growth and supporting poverty reduction over the medium term. It welcomed continued efforts to strengthen the foreign exchange market, including limiting interventions to auctions and improving transparency, as well as steps to modernise monetary policy.
Fiscal performance has also shown improvement, supported by strong revenue collection and recent tax policy reforms aimed at broadening the tax base. However, the IMF stressed the importance of prudent expenditure control, continued domestic resource mobilisation and the gradual phasing out of fuel subsidies to rebuild fiscal buffers while safeguarding social protection spending.
Progress on debt restructuring under the G20 Common Framework was described as encouraging, particularly the signing of the Official Creditor Committee Memorandum of Understanding. Discussions with private external creditors are ongoing, with the IMF highlighting the need to secure a comprehensive debt treatment to restore sustainability.
Commenting after the Board meeting, IMF Deputy Managing Director Nigel Clarke said Ethiopia’s reforms were yielding “encouraging results” and that sustained efforts in fiscal discipline, monetary tightening and financial sector oversight would be essential to preserving macroeconomic stability.
He added that strengthening central bank governance and finalising institutional reforms at the National Bank of Ethiopia would further enhance policy credibility.
The IMF reaffirmed its support for Ethiopia’s reform agenda, noting that continued commitment to policy implementation would be key to sustaining economic recovery and building resilience against future shocks.
