Diverging assessments delay Ethiopia’s debt restructuring prospects

While an agreement-in-principle was reached in March 2025 with the Official Creditors Committee OCC, co-chaired by China and France, and an MoU signed a few months later, negotiations with several countries, including Finland, India, Sweden, Saudi Arabia, China, and South Africa, are ongoing. Ethiopia's total external debt stood at USD 31 billion in mid-2024. Astewaye Woldemichael, a senior advisor to the Ministry of Finance, noted that while the Common Framework has been beneficial, providing approximately USD 8.4 billion in restructured bilateral debt, delays in creditor responses lead to accumulating arrears for Ethiopia.

She also highlighted the difficulty in engaging with commercial creditors and Eurobond holders, whose assessments often diverge from IMF projections. Eyob Tekalign, NBE governor, stated that Ethiopia's debt restructuring is progressing well and that reforms have restored debt sustainability. However, financial expert Abdulmenan Mohammed PhD pointed out that bondholders and commercial creditors negotiate based on commercial terms, unlike bilateral creditors, and their differing views on Ethiopia's debt sustainability, coupled with the 'Comparability of Treatment' principle, are major bottlenecks.

He suggested that bondholders are unlikely to go to c