Kovid-19 has weakened many African economies and Ethiopia, which has had strong growth for over a decade, is no exception. After Zambia and Chad join the same practice, the second most populous country on the continent has requested debt restructuring.
Addis Ababa has approached the G20 to adjust its debt to its current financial prospects. The announcement was made by the Finance Minister of Ethiopia, who nevertheless attempted to reassure creditors of their true potential to honor their commitments.
The results of the Kovid-19 epidemic remain the main reason for this unprecedented demand among the continent’s most promising countries. However, the country waged a brief war against its northern region, Tigre, which surely strained its financial resources.
The good news is that according to data provided by the World Bank, Ethiopia’s public debt is barely less than $ 27.8 billion at the end of 2019, or barely 29% of its GDP. It has one of the lowest debt levels on the continent. We are in a separate case with Chad, which has also announced that it has begun restructuring its debt. Indeed, the risk of over-indebtedness of the Central African country in 2019 is high with 44%, but above all, which relies heavily on oil whose prices collapsed in 2020, putting increased pressure on its budget.
The case of Ethiopia is also on a very different configuration from Zambia, which was almost the default last November. This southern African country, heavily dependent on its copper resources and with a debt of $ 3 billion to its private creditors, had to appeal to the IMF to avoid possible actions in the justice of its lenders.