Ethiopia sees bondholder losses as unavoidable, hopes for fresh talks at IMF meeting
By Karin Strohecker
LONDON, Oct 9 (Reuters) -Ethiopia's bondholders will have to take a writedown as part of the country's debt restructuring, State Finance Minister Eyob Tekalign told Reuters, adding he still hoped the debt rework could be completed by year-end.
Ethiopia became Africa's third country to default in as many years in December 2023, but progress on restructuring its international debt has been slow as the country negotiated a $3.4 billion programme with the International Monetary Fund.
Investors have rejected the government's most recent indicative debt rework scenario, which sets out an 18% haircut - or writedown - on its sole $1 billion bond maturing in 2024.
Ethiopia needs to abide by the IMF's debt sustainability analysis which envisages Ethiopia "moving to medium risk distress under low debt carrying capacity in the next two, three years," said Eyob, referring to the calculations and projections underpinning debt reworks.
"Based off of that, some haircut is needed," he said, adding the latest debt sustainability analysis showed the country had a solvency issue and not just the liquidity crunch bondholders had assumed.
Eyob said non-disclosure agreements between the government's and the bondholders' advisors were extended last week to spring 2025, allowing for more negotiations.
However, formal talks with bondholders were not on the agenda right now though Ethiopia was open to meeting them on the sidelines of the IMF World Bank meetings later this month.
"We're hoping to meet them there," Eyob said.
Speaking about efforts to shelter the poorest section of the population from the fallout of birr ETB= depreciation, Eyob said a raft of measures had been taken for which the government had earmarked 30% of its budget in 2024.
Measures ranged from subsidies for items such as cooking oil, fertilizer and fuel, to lifting salaries of civil servants by as much as 300% for those on the lower pay scale.
Eyob said he did not expect price pressures to materialise on the scale predicted by analysts, who have forecast average inflation could hit 30% in 2025 after 23% this year.
"The signs are that we are actually going... on the opposite side of that," he said, confirming the country was on track for single digit inflation by June 2025.
Government reforms had sparked fresh interest from investors, Eyob said, predicting foreign direct investment - which came in at more than $3 billion in the financial year to early-July - to double in the next two or three years.
"Mining is a fairly new sector... and we're seeing significant interest in this," said Eyob, adding agriculture and manufacturing were also a focus.
Asked about a swap line Ethiopia has agreed with China's central bank according to reports in September, Eyob declined to give details, though said it should be bigger than the $800 million it has with the UAE.
"It would significantly enhance business between the two countries," he added.
Reporting by Karin Strohecker
Editing by Christina Fincher
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
