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Ethiopia is taking decisive steps to ease its debt burden by negotiating with creditors to convert costly commercial loans into concessional ones with lower interest rates. This initiative follows successful macroeconomic reforms that restructured up to $4.5 billion in previous loans, reducing the nation’s external debt to less than $23 billion. The government has already halted new commercial borrowing and is prioritizing long-term sustainability through favorable restructuring deals. While G20 creditors back the effort, Eurobond holders are pressing for repayment under original terms, citing Ethiopia’s growing export revenues. However, Addis Ababa insists that those debts be treated under the Common Framework Agreement to secure fairer repayment terms and maintain economic stability.
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