The IMF has received a request for financial assistance from Ethiopian authorities to support the country's economic reforms, according to the spokesperson, noting that the country has been hit by a number of shocks, including drought, the COVID-19 pandemic, domestic conflicts, and the impact of Russia's war in Ukraine.
This report is courtesy of the American news agency Bloomberg.
A mission team is “on the ground doing technical work to prepare for a potential IMF-supported program,” the Washington-based lender said Monday in response to emailed questions. The Horn of Africa nation requested financial assistance from the IMF, it said.
Ethiopia must fund post-conflict rehabilitation and replenish its depleted foreign-currency reserves in order to pay for imports of medicine, food, and raw materials for its manufacturing economy.
War broke out in November 2020 between the federal government and separatists from the northern Tigray province, claiming hundreds of thousands of deaths before the African Union secured a peace deal late last year. After complaints of human rights violations in Tigray, the World Bank, and the IMF withheld money in 2021, costing Ethiopia its status as one of Africa's hottest investment destinations.
"A potential program would support the authorities’ Homegrown Economic Reform program and help Ethiopia stabilize its economy so that it can meet its economic, humanitarian, and social challenges, create jobs, and reduce poverty," the spokesperson said.
The technical meetings this week follow continuing conversations between the IMF and Ethiopian authorities on how to effectively handle humanitarian and economic concerns, according to the spokeswoman.
Bloomberg said that executives from the global lender were slated to stay for 10 days.
The IMF praised Ethiopia for making significant progress in restoring long-term peace and stability through the "cessation of hostilities accord," noting that implementation had gone well, including the delivery of humanitarian supplies and essential services to Tigray.
While the United States has provided Ethiopia with more than $3 billion since 2020 to combat the impacts of the drought and solve other difficulties, legal obstacles must yet be overcome before it can deliver bilateral development aid through the World Bank and IMF. According to a senior US source, one of these is determining that serious human rights abuses are not being perpetrated systematically within the country.