ECONOMY · ETHIOPIA
Key Facts
- —The country Ethiopia is East Africa’s most populous nation, with more than 120 million people. It is midway through a US$3.4 billion IMF loan programme approved in July 2024.
- —Why it matters Each completed review releases fresh IMF cash and signals to creditors that reforms are on track. Ethiopia is still restructuring its foreign debt, including its only Eurobond.
- —Why now The IMF had listed 15 October as the earliest date for the next payout. The Fund has now set a later timetable during the week of its Annual Meetings.
- —What happened In comments published on Wednesday 14 October, an IMF spokesperson said sixth review talks will take place in November. A decision by the Executive Board is expected in early 2027.
- —The numbers The next tranche was projected at about US$208 million, down from about US$259 million first planned. Disbursements so far total about US$2.647 billion.
- —What it means for you US funds that hold Ethiopia’s defaulted Eurobond watch every review for signs that a final debt deal is near. A slower timetable means a longer wait for clarity.
- —Still open The IMF has not given firm dates for the mission or the board meeting. It is also unclear whether Ethiopia met its end-June 2026 targets.
The next Ethiopia IMF review will be discussed in November, with an Executive Board decision expected in early 2027. An IMF spokesperson set out the timetable to the Addis Ababa weekly The Reporter, which published it on Wednesday 14 October.
That pushes the process past 15 October, the earliest payout date named in the IMF’s last review. For US investors holding Ethiopian debt, the reviews are the clearest public test of the country’s reform programme.
The IMF stressed that 15 October was only the first possible window, not a deadline. Money can only be released once the Executive Board approves the review, the spokesperson told the paper.
What the IMF Said in Bangkok
The comments came during the week of the IMF and World Bank Annual Meetings in Bangkok, Thailand. The Reporter asked both the Fund’s spokesperson and Julie Kozack, its Director of Communications, about the calendar.
“What will happen before we conclude the next review is we have a mission, and a team will go to Ethiopia and talk with the authorities,” Kozack said. “They will come back and present the report to the Executive Board,” she added, without naming a completion date.
The sixth review checks Ethiopia’s performance against targets set for the end of June 2026. Earlier good results do not decide the outcome, because each review covers its own test period.
According to The Reporter, the fifth review report projected the next payout at SDR 154.11 million (about US$208 million). That was down from SDR 191.70 million (about US$259 million) first planned, at the IMF rate of US$1.35284 per SDR on 14 October.
How the Ethiopia IMF Review Programme Has Gone
The IMF Executive Board completed the fifth review on Wednesday 1 July 2026, releasing about US$464 million (SDR 342.05 million). That brought total payouts under the 48-month Extended Credit Facility to about US$2.647 billion.
The arrangement totals SDR 2.556 billion, or about US$3.4 billion at the time it was approved on 29 July 2024. The Fund said all quantitative performance criteria and most indicative targets were met at that review.
About US$200 million was also brought forward to help Ethiopia absorb the war in the Middle East, the IMF said. The main pressure was the much higher price of imported fuel.
The Fund welcomed an agreement in principle with Ethiopia’s Eurobond holders and progress with official and commercial creditors. It urged the government to finish the restructuring through good-faith talks and to borrow with caution.
Taxes, Subsidies and the Cost of Reform
Since joining the programme, the government has floated the birr, changed income taxes and gradually cut fuel subsidies. It has also tightened tax compliance and customs administration to raise more money at home.
The Reporter, citing IMF data, said federal tax revenue rose 76 percent in the first nine months of the 2025/26 fiscal year. General government tax revenue is estimated to have climbed from 6.2 percent of GDP in 2023/24 to 9.5 percent in 2025/26.
At a Bangkok fiscal briefing on Wednesday, the paper asked whether such tax rises and subsidy cuts suit a vast informal economy. Davide Furceri, a division chief in the IMF’s Fiscal Affairs Department, defended the approach.
“For many countries that are starting from a very low tax rate base, like Ethiopia and Nigeria, it is important to raise sufficient revenue,” Furceri said. He added that school feeding and geographically targeted support can shield poorer households before full registries exist.
Addis Ababa Presses Its Own Case
Ethiopian officials used the same meetings to push for faster debt relief. National Bank of Ethiopia Governor Eyob Tekalign urged clearer restructuring timelines at the Global Sovereign Debt Roundtable, the Addis Ababa broadcaster Fana reported.
He wants an enhanced Common Framework, the G20 process that brings China and Western creditors together on debt relief. Eyob also called for better creditor coordination and early caps on advisers’ fees.
He met IMF Deputy Managing Director Nigel Clarke in Bangkok, who praised Ethiopia’s commitment to its reform agenda, Fana said. Clarke also reaffirmed the Fund’s support for the programme, the broadcaster added.
The IMF’s July projections put Ethiopia’s growth at 7.8 percent for 2025/26 and average inflation at 11.7 percent. Public debt was projected to fall from 50.5 percent of GDP in 2024/25 to 45.3 percent.
What It Means for US Readers
The United States is the IMF’s largest shareholder, so Washington has a direct voice when the Executive Board votes on Ethiopia. Prime Minister Abiy Ahmed spoke by phone with Secretary of State Marco Rubio, Fana reported on Wednesday.
Abiy said he welcomed “the assurance of continued U.S. support for Ethiopia.” His statement did not say whether the IMF programme or debt talks came up.
For bond investors, the key item is Ethiopia’s only Eurobond, on which the country missed a coupon payment in December 2023. A final deal with holders depends partly on the IMF judging the reforms to be on track.
Companies weighing entry after the birr was floated also read the reviews as a guide to currency and policy risk. Our earlier report on Ethiopia Plans US$840 Million in Dollar Auctions shows how the central bank is managing foreign exchange.
What Is Not Known
The IMF has not said when its mission will travel to Addis Ababa or when the board will meet in early 2027. It has also not said whether the size of the next payout will change.
It is not yet public whether Ethiopia met its end-June 2026 targets, which the sixth review will assess. Fighting with Eritrean forces in Tigray could also strain the budget, as our guide to why Tigray is at war again explains.
The timing of a final agreement with Eurobond holders also remains unclear. For background on the wider economy, see Ethiopia Explained 2026, Abiy, Economy and Tigray Fighting.
Frequently Asked Questions
When will the next Ethiopia IMF review happen?
An IMF spokesperson said talks on the sixth review will take place in November. A decision by the Executive Board is expected in early 2027.
Was Ethiopia due to receive IMF money on 15 October?
The fifth review report named 15 October as the earliest possible date for the next payout. The IMF says it was a window, not a deadline, and money flows only after board approval.
How much is the next IMF payout?
It was projected at SDR 154.11 million, or about US$208 million at the 14 October rate. That is down from about US$259 million originally planned.
How much has Ethiopia received so far?
Total disbursements reached about US$2.647 billion after the fifth review on 1 July 2026. The full arrangement is worth about US$3.4 billion.
Why does this matter to US investors?
The United States is the IMF’s largest shareholder, and US funds hold Ethiopian debt. IMF reviews shape how quickly Ethiopia can finish its debt restructuring.
Sources: The Reporter, IMF says Ethiopia review talks expected in November; IMF, Executive Board completes fifth review for Ethiopia (1 July 2026); IMF, SDR valuation (14 October 2026); Fana, Ethiopia calls for enhanced Common Framework; Fana, IMF Deputy Managing Director commends Ethiopia; Fana, Abiy welcomes continued US support in talks with Rubio.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error