- The International Monetary Fund (IMF) has approved the release of 262.3 million USD to Ethiopia, marking a significant endorsement of the country's economic reform progress under the ongoing Extended Credit Facility (ECF) program.
The decision follows the successful completion of the third program review and the conclusion of the 2025 Article IV consultation with Ethiopian authorities.
With this new disbursement, total funds released under the program now stand at approximately1.87 billion USD. The full four-year ECF arrangement, worth about 3.4 billion USD, was first approved in July 2024 to support Ethiopia's Homegrown Economic Reform Agenda. The program aims to address macroeconomic imbalances and lay the groundwork for sustainable, private sector-led growth.
The IMF noted that Ethiopia has demonstrated notable progress on multiple fronts. Key macroeconomic indicators have improved, including a significant decline in inflation, stronger export performance, and a healthier reserve position supported by rising gold exports.
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The Fund also acknowledged the government's efforts to modernize monetary policy, increase domestic revenues, and enhance fiscal transparency.
In his remarks, IMF Deputy Managing Director and Board Chair Nigel Clarke praised Ethiopia's policy trajectory, pointing to improvements in the foreign exchange market as particularly impactful.
He said that the authorities had corrected earlier misalignments in the exchange rate and increased the availability of foreign currency through more transparent and market-friendly reforms.
While the overall outlook is promising, the IMF cautioned that challenges remain. Risks related to security, reduced donor flows, and vulnerability to climate shocks could complicate the reform process. The Fund emphasized the importance of maintaining tight monetary and fiscal policies to manage inflation and preserve economic stability.
The ongoing transition toward a more flexible monetary framework and efforts to phase out fuel subsidies while strengthening social protection programs were seen as encouraging signs of Ethiopia's commitment.
The IMF also welcomed the country's progress in negotiations with official creditors under the G20 Common Framework and encouraged continued talks with commercial lenders to reach comparable debt treatment terms.
Board members called for sustained reform momentum, urging Ethiopian authorities to maintain policy discipline and ensure public trust as they push ahead with structural changes. They also underlined the need to enhance the legal and institutional framework of the National Bank of Ethiopia to safeguard financial stability and independence.
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In conclusion, the IMF said that Ethiopia's economic reform program has laid a solid foundation for a more inclusive and resilient economy. Continued efforts and international support, it added, will be critical to ensure the durability of these gains and to foster long-term development.
