WASHINGTON (Reuters) – The International Monetary Fund’s executive board on Friday approved a second review of Ethiopia’s current financing program, the fund said, clearing the way for a disbursement of about $250 million.
The East African nation struck a four-year, $3.4 billion program deal last July after undertaking far-reaching reforms, including floating its birr currency, to try to get debt restructuring back on track.
“The authorities are continuing their efforts to restore debt sustainability and are taking steps to ensure debt treatment. The progress made in debt restructuring negotiations under the Common Framework is welcome,” the IMF said in a statement.
“The financial guarantees received and adjustment efforts made are in line with IMF policy requirements and program parameters.”
The staff of the Fund and the Government reached an agreement on the second audit at the end of November.
The IMF estimated that Ethiopia’s economy fared better than expected as part of the reform program, with the predicted increase in inflationary pressure not materializing and foreign exchange reserves growing at a faster-than-expected rate.
After unusually quick reviews of Ethiopia’s program aimed at closely monitoring the impact of reforms, the IMF said in November it would switch to the usual six-month review schedule.
The IMF’s role in rehabilitating Ethiopia’s debt has come under criticism from some quarters, including World Bank staff, who questioned the conclusions reached in last year’s assessment of the Fund’s debt sustainability in an internal document.
