The IMF’s decision comes just one day after Ethiopia implemented a floating exchange rate system, a crucial step in its economic reform process. The loan is expected to provide much-needed financial support, alleviate foreign exchange shortages, and unlock additional financing from development partners.
An initial disbursement of $1 billion will be made immediately, with the remaining funds released in tranches over the next four years. The IMF’s support is contingent upon Ethiopia’s continued implementation of its Homegrown Economic Reform (HGER) agenda.
This financial lifeline is expected to be a catalyst for Ethiopia’s economic recovery and development. However, the country will need to demonstrate sustained progress in implementing the agreed-upon reforms to ensure the successful disbursement of the remaining funds.