Following ongoing restructuring exercise, Ethiopian government has said that it will save $4.9 billion.
Ethiopia’s State Finance Minister, Eyob Tekalign, made the disclosure as the country puts its long-delayed debt overhaul back on track after securing a new International Monetary Fund financing programme.
Agreed at the end of last month, the deal with the IMF will see Ethiopia receiving $3.4 billion for the four-year programme.
Ethiopia, which is East Africa’s biggest economy, has since resumed talks to reduce its debt-repayment burden.
The finance minister says the government expects to finalise a deal with each individual creditor of the country over the next few months.
Ethiopia’s total external debt stood at over $28 billion in March this year with private creditors hold only around 5 per cent of the debt, and over 90 per cent being the $1 billion Eurobond.
Prime Minister Abiy Ahmed made a televised address on Thursday to explain recent macroeconomic reforms, which include exchange rate liberalisation and the establishment of a new interest-rate based monetary policy framework.
He defended Monday’s switch to a market-determined foreign exchange rate, saying it aimed to close the gap between the official and black-market rates.
Fears about the policy's inflationary impact on low-income households has led at least two local governments to crack down on shops raising prices.