The Ethiopian government has announced an updated timeline for finalizing a Memorandum of Understanding (MoU) with G20 countries, aimed at restructuring debt repayments that account for nearly a third of its total external debt. The government has also committed to expediting negotiations with international bondholders.
Ethiopia was one of the first nations to seek debt relief under the G20 Common Framework in early 2021; however, the restructuring process has faced significant delays. Progress was made last month when Ethiopia reached an Agreement in Principle (AIP) with its creditor nations.
This agreement is expected to be formalized through individual MoUs with the lending countries.
Although Ethiopian officials recently indicated that the MoU would be signed “very soon” during the Global Sovereign Debt Roundtable (GSDR)—co-chaired by IMF Managing Director Kristalina Georgieva, World Bank President Ajay Banga, and G20 co-chair South Africa—they have stated that the MoU will be finalized by June 2025.
Once signed, this agreement will facilitate the restructuring of Ethiopia’s USD 8.4 billion debt.
During the GSDR meeting at the World Bank and IMF Spring Meetings in Washington, DC, State Minister of Finance Eyob Tekalign acknowledged the lengthy timeline but emphasized the effectiveness of the Common Framework, referencing successful debt restructurings in Zambia and Ghana.
He also stressed the importance of transparency by publicly disclosing the terms of debt treatment agreements once an AIP is reached between a borrowing country and its Official Creditors’ Committee.
Furthermore, Eyob called for a more streamlined process to expedite the transition from the AIP to finalized bilateral agreements with creditor nations.
To minimize further delays, he suggested establishing a quicker and more efficient pathway for signing MoUs and subsequent bilateral deals.
The Ethiopian diplomatic mission in Washington, DC, emphasized the need for greater efficiency in the debt restructuring process during these discussions.
In related developments, Finance Minister Ahmed Shide met with private bondholders to discuss Ethiopia’s debt treatment.
It has been a decade since the government issued a USD 1 billion Eurobond that was due for full repayment by the end of last year.
Both sides agreed to continue negotiations as Ethiopia seeks debt relief from both official creditors and private bondholders.
According to Ethiopia’s diplomatic mission in Washington, D.C., the meeting focused on the country’s debt restructuring progress under the G20 Common Framework, following an agreement in principle reached with Ethiopia’s Official Creditors Committee in March 2025.
Ethiopia is currently negotiating with international creditors, primarily G20 nations and private bondholders. While discussions with official creditors are progressing well, talks with bondholders remain unresolved.
In February, Ethiopia’s Eurobond holders accused the IMF of exaggerating the country’s financial challenges to advocate for deeper debt relief, including potential haircuts. They argued that Ethiopia’s economy is recovering, particularly in key sectors like coffee exports, and criticized the IMF’s analysis as flawed, alleging it artificially depicts a solvency crisis.
A delegation led by Finance Minister Ahmed, who attended last week’s World Bank and IMF Spring Meetings, had constructive discussions with Eurobond holders, according to the diplomatic mission statement. Both sides agreed to maintain dialogue to ensure a smooth and timely debt restructuring process.
A memorandum of understanding with G20 creditors is expected to be signed in June, paving the way for the restructuring of over USD 8 billion in debt.
