WASHINGTON (Reuters) – The executive board of the International Monetary Fund on Friday approved the second review of Ethiopia’s current financing program, the fund said, paving the way for a disbursement of about $250 million.
The East African nation struck the four-year, $3.4 billion program deal last July, after it undertook far-reaching reforms including the floatation of its birr currency, to enable it to try to put its debt restructuring back on track.
“The authorities continue their efforts to restore debt sustainability and are taking steps to secure a debt treatment. The progress made on debt restructuring negotiations under the Common Framework is welcome,” the IMF said in a statement.
“The financing assurances received, and adjustment efforts made are consistent with IMF policy requirements and program parameters.”
The Fund’s staff and the government reached agreement on the second review in late November.
The IMF has assessed that Ethiopia’s economy has fared better than expected under the reform program, with projected surge in inflationary pressure failing to materialise and hard currency reserves rising faster than the envisaged rate.
After unusually fast reviews of Ethiopia’s programme that were aimed at closely monitoring the impact of the reforms, the IMF said in November it would switch to the conventional six-month review schedule.
The IMF’s role in Ethiopia’s debt overhaul has come under criticism from some quarters, including from World Bank staff, who questioned the conclusions reached by the Fund’s debt sustainability assessment in an internal document last year.