Friday, June 14, 2024

Will Ethiopia appease global partners?


All eyes on Ethiopia in Washington

Global partners’ signal eager expectations to see the direction of Ethiopia’s commitment at the 2023 spring meetings of the World Bank Group and the International Monetary Fund (IMF) which is set to take place from April 10 to 16 in Washington, DC.
Recently, government officials led by Prime Minister Abiy Ahmed paid visits to the US, Europe and China to discuss with the relevant countries and global partners to restore the cooperation that was damaged from the ripples of the northern Ethiopia conflict, in order to get further financial support.
International partners including organizations had imposed their pressure on government in connection to the conflict and as part of the follow through had further suspended commitments and expected funds, which affected the government’s target in attaining the first Homegrown Economic Reform (HGER I) and hard currency resources.
Following the recent peace agreement which was signed in November in Pretoria, South Africa between the government and TPLF, the relations with partners, particularly western countries, has been improving.
Efforts are also ongoing from the government’s side to restore expected support to the economy and HGER II reform program which is expected to be introduced in the coming couple of months.
As part of the negotiation, IMF staffs visited Ethiopia as from March 27.
In a statement that IMF issued on Friday April 7, it said that a mission led by Alvaro Piris visited Addis Ababa from March 27 to April 7, 2023, to hold discussions on the authorities’ request for IMF support for their reform program.
The statement quoted by Piris cited, “The IMF team welcomes the authorities’ HGER II, an ambitious reform program that aims to address key macroeconomic vulnerabilities and unleash Ethiopia’s considerable economic potential. We have made progress in discussing the scope for IMF’s support for this reform program.”
It added that discussions will continue in Washington, DC, next week, in the context of the IMF-World Bank Spring Meetings, and in the weeks to come.
According to reliable source, the Ethiopian government is expected to come up with further commitments particularly in political issues so as to get support from the international organizations, which are dominated by western allies.
Sources said that commitments including that stated on the peace deal are part of the expected issues from the government, which desperately needs global support on its side.
Despite the government showing its commitment with regards to servicing its debt, it is demanding debt re-profiling since the debt settlement is growing which in turn has frown to affect the country’s foreign currency resource.
In its latest document, the country’s debt as analyzed by the Ministry of Finance (MoF), stated that discussions with various development partners is underway in response to the November 2020 G20 communique on the Common Framework (CF), which intended to deal with insolvency and protracted liquidity problems of countries; and so far Chad, Ethiopia, and Zambia have made requests for debt relief under the CF.
Recently, Eyob Tekalign, State Minister of MoF, said in an interview with state media, FBC, that countries have been reluctant to see Ethiopia’s case in the past two years because of their direction on the northern conflict. He said that in the latest discussion with partners, consensus has been reached and one of the IMF visit is also part it.
However, the coming week’s discussion that is aligned with the Spring Meeting will be crucial for Ethiopia. According to sources, if some sort of agreement shall not been reached in the coming discussion, the issue shall be pushed on the next joint annual meeting of the World Bank and IMF that will be held in October.
“So the government must show its commitment on the area that partners expected including on the issue that partners demanded from the government in related with the November peace agreement,” sources said.
Experts say that the meeting is not just discussions with the two global organizations, but with those who are behind in support of them.

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