Ethiopia's bad year: From unending civil war to drought, default on Eurobond
Saturday December 30 2023
Prime Minister Abiy Ahmed reacts during a session in Parliament in the city of Addis Ababa, Ethiopia, on June 14, 2022. PHOTO | EDUARDO SOTERAS | AFP
It has been a bad year for Ethiopia, a country with very low forex reserves, a double-digit inflation, high external debt, and just recovering from a civil war, and economists warn that it could be on the verge of economic crisis after it missed interest payment on its only sovereign bond this week.
Ethiopia formally defaulted on $33 million interest repayment on its $1 billion Eurobond, joining Zambia and Ghana, the other bond defaulters on the continent.
The default followed weeks of discussions and on December 15, Eyob Tekalign, State Minister for Finance, held a global investor call, in which he explained that Addis was “seeking to ensure consistency and fairness by requesting other external creditors, including bondholders, to participate in similar debt arrangements”.
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