The IMF approved today $411m in emergency assistance to help Ethiopia meet the urgent balance of payment needs stemming from the COVID-19 pandemic.
The Executive Board also approved a rephasing of disbursements under the Extended Credit Facility (ECF) and Extended Financing Facility (EFF) arrangements that have been supporting Ethiopia’s economic reform program since December 2019, and a reduction in access under the EFF arrangement, to maximize financial support under the RFI.
In addition, Ethiopia will benefit from the IMF’s decision to provide debt service relief to the poorest and most vulnerable countries that are eligible for grant assistance under the Catastrophe Containment and Relief Trust (CCRT).
As a result, the board today approved Ethiopia’s request for relief under the CCRT on debt service falling due to the IMF until October 13, 2020 of about $12m. This relief could be extended up to 2022 subject to the availability of resources under the CCRT.
The COVID-19 pandemic has created severe health risks and weighed heavily on the Ethiopian economy. If the pandemic is not contained, it will put severe pressure on the health system with devasting social consequences. On the economic front, a fall in demand for exports, combined with domestic containment measures will slow growth and weaken external and fiscal accounts.