IMF approves $411 million assistance to Ethiopia

The International Monetary Fund (IMF) Executive Board approves US$411 million in emergency assistance to Ethiopia to address the COVID-19 pandemic.

“To address this urgent need, the IMF approved US$411 million emergency assistance for Ethiopia under the Rapid Financing Instrument. The country will also benefit from IMF debt service relief under the Catastrophe Containment and Relief Trust,” said IMF, indicating that Ethiopia is facing a pronounced economic slowdown and an urgent balance of payments need owing to the COVID-19 pandemic.

“The authorities have taken swift and decisive action to contain the impact of COVID-19 by strengthening the health system, adopting a state of emergency to limit the spread of the virus, and implementing measures to support the economy,” it said in a statement.

It also stated that 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 Executive Board decision of April 13, 2020 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), according to IMF.

“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 $12 million. This relief could be extended up to April 13, 2022, subject to the availability of resources under the CCRT,” it said.