Ethiopia has reached a significant milestone in its ongoing efforts to address mounting external debt, securing a $3.5bn debt relief package through an agreement with its Official Creditor Committee (OCC), the Ministry of Finance announced on Wednesday.
The memorandum of understanding was concluded under the G20 Common Framework for Debt Treatments, a multilateral initiative aimed at supporting low-income countries facing debt distress. While the financial scope of the agreement has been disclosed, specific terms and conditions — including what Ethiopia may be offering in return — have not been made public.
In an official statement, the Ministry of Finance described the agreement as “an important milestone in Ethiopia’s journey towards achieving long-term public debt sustainability,” marking the culmination of a years-long negotiation process with its official creditors.
The ministry extended particular appreciation to China and France, co-chairs of the OCC, citing their “steadfast support and collaboration” throughout the debt treatment discussions. The names of other participating creditors have not yet been revealed.
Ethiopia’s external debt currently stands at over $28 billion, and the government has actively pursued international diplomatic efforts to restructure its obligations. Wednesday’s announcement signals progress in that campaign, although key implementation details remain pending.
According to the Ministry, the next phase will involve the signing of bilateral agreements with individual OCC member states, which will initiate the implementation of the agreed debt relief terms. A timeline for this stage has not yet been provided.
The development comes amid growing fiscal pressure on the Ethiopian government, which has faced challenges in managing public finances following years of political and economic instability.
