The International Monetary Fund and the government of Ethiopia have reached a preliminary agreement on a three-year $2.9 billion (SDR 2.1049 billion) financing package that could be supported by the IMF under its Extended Credit Facility (ECF) and Extended Fund Facility (EFF).
The preliminary agreement between the Ethiopian government and the IMF staff team led by Ms. Sonali Jain-Chandra, which visited Addis Ababa from October 29 to November 8, 2019, remains subject to approval by the Fund’s Executive Board, IMF said in a statement to TODAY NEWS AFRICA in Washington DC on Wednesday morning.
It said the overall objective of the program would be to support implementation of Ethiopia’s homegrown economic reform program.
“The Ethiopian government and the IMF staff team reached preliminary agreement, subject to approval by the Fund’s Executive Board, on policies that could constitute the basis for Ethiopia’s new program supported by the ECF and EFF arrangements. The overall objective of the program would be to support implementation of the authorities’ Homegrown Economic Reform Program,” said Ms. Jain-Chandra who led the IMF mission to Ethiopia.
“The Fund-supported program would consist of five main pillars: (1) durably address the foreign exchange shortage and transition to a more flexible exchange rate regime; (2) strengthen oversight and management of state-owned enterprises to contain debt vulnerabilities; (3) strengthen domestic revenue mobilization and expenditure efficiency to create space for adequate poverty-reducing and essential infrastructure spending; (4) reform the financial sector to support private investment and modernize the monetary policy framework; and (5) strengthen the supervisory framework and financial safety nets.
“We will submit the program request to the Executive Board for its consideration,” she added.