It’s woe after war: Bloody Tigray conflict forces austerity on Abiy’s administration

Summary

  • Ethiopia plans to restructure a $1 billion debt as the government grapples with ways of freeing up funds to support economic recovery.
  • Prime Minister Abiy Ahmed’s administration is reeling from a war in the Tigray region.
  • In February, Addis requested to rework its debt under the Group of 20 (G-20) Common Framework, an initiative to secure debt relief for poor nations from all creditors, commercial lenders, and China.
Ethiopia
A Tigray Defence Force soldier is given a heroic welcome by the people in the streets of Mekele, on June 29. PHOTO | AFP

(The East African) — Ethiopia plans to restructure a $1 billion debt as the government grapples with ways of freeing up funds to support economic recovery in the midst of a devastating conflict in the north.

Prime Minister Abiy Ahmed’s administration is reeling from a war in the Tigray region, which has so far gobbled up at least $2.3 billion, forcing officials to pursue austerity measures.

But Addis is also pleading with creditors to help it pull through the crisis.

This week, the Finance ministry release a report indicating that the country was seeking to restructure a $1 billion debt to afford “a grace period of as long as six years and extend the maturity by 10 years.”

“Negotiations are underway with creditors for the second external debt restructuring/ reprofiling scheme,” a statement from the ministry said.

In February, Addis requested to rework its debt under the Group of 20 (G-20) Common Framework, an initiative to secure debt relief for poor nations from all creditors, commercial lenders, and China.

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