Default on Eurobond, very low forex reserves, tanking economy wracked by inflation, graft, war and climate change, have conspired to mar Addis’ growth quest.
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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