Ethiopia failed to pay a $33m bond coupon on Monday and looks set to become the latest African country to default on its debt unless a restructuring agreement can be found with international bondholders within the 14-day grace period. Only two weeks ago, the governor of the National Bank of Ethiopia told the Ethiopian parliament that the country had secured over $1.5bn in temporary debt relief from its international creditors, leading to speculation that Ethiopia would avoid default. Earlier this year, Ethiopia’s largest single creditor, China, allowed the East African country to suspend debt repayments on bonds maturing in the 2023-24 fiscal year. Ethiopia also has relatively low levels of external debt compared to other countries which have defaulted. But Ethiopia’s finance ministry said on Friday it was “not in a position to pay” the $33m coupon because of the nation’s “fragile external position.”
