IMF approves ‘landmark’ Ethiopia bailout

The International Monetary Fund (IMF) has approved a bailout of $3.4bn (£2.6bn) for Ethiopia to support its economic reforms over the next four years.

The Horn of Africa nation has been struggling with chronic foreign currency shortages and high inflation – largely blamed on the brutal two-year civil war in Tigray, which ended in 2022.

“This is a landmark moment for Ethiopia,” said Kristalina Georgieva, the IMF’s managing director, adding that it was “a testament to Ethiopia’s strong commitment to transformative reform”.

News of the deal came after Ethiopia floated its currency – which analysts say was a key step in securing the loan.

The International Monetary Fund (IMF) has approved a bailout of $3.4bn (£2.6bn) for Ethiopia to support its economic reforms over the next four years.

The Horn of Africa nation has been struggling with chronic foreign currency shortages and high inflation – largely blamed on the brutal two-year civil war in Tigray, which ended in 2022.

“This is a landmark moment for Ethiopia,” said Kristalina Georgieva, the IMF’s managing director, adding that it was “a testament to Ethiopia’s strong commitment to transformative reform”.

News of the deal came after Ethiopia floated its currency – which analysts say was a key step in securing the loan.

Monday’s announcement saw Ethiopia’s currency, the birr, lose nearly a third of its value against the dollar.

The IMF said it would immediately release about $1bn help Ethiopia’s “balance of payments needs and provide support to the budget”.

Ethiopia – Africa’s second most-populous country – has also been in talks with its international creditors to restructure its debt.