The International Monetary Fund said Thursday that, despite a worsening conflict in Ethiopia, it will continue to engage with Ethiopia on a technical level, but has not launched discussions on a possible IMF assistance program because of uncertainty.
According to IMF spokesman Gerry Rice, the Fund has been monitoring developments closely in Ethiopia and Sudan. Rice said it is too early to tell how political developments related to a late October coup will affect Sudan’s request for debt relief and potential IMF loans in 2022.
On Thursday, African and Western nations called for a ceasefire in Ethiopia after Tigrayan forces advanced towards Addis Ababa, the country’s capital. An envoy from the United States also arrived in Addis Ababa to press for a halt to military operations.
Ethiopia has requested a new loan program from the IMF as France and China have convened a creditor committee to work toward restructuring Ethiopia’s nearly $30 billion external debt. In December 2019, the IMF approved credit facilities worth $2.9 billion but has yet to disburse funds.
Rice said the IMF welcomed the formation of the creditor committee and was providing technical support.
“Given the heightened uncertainty on the ground and its impact on the macroeconomy amid significant donor support, it’s difficult to move to program discussions at this stage. But we stand ready to engage when the timing is right,” he said.
Rice said the IMF would continue to provide policy advice and technical assistance to Ethiopia.
“Like everyone else, we are watching developments of the situation in Ethiopia with concern and continue to monitor that.”
In regards to Sudan, Rice said it was too early to determine if the coup would affect debt relief under the IMF-World Bank initiative for highly indebted poor countries, which was approved for Sudan in June.
According to Rice, a review for a disbursement under the new IMF program is not expected until the end of March 2022, and it is too soon to say if the political situation will affect the initiatives.