In an effort to stabilize its economy and reach a deal with creditors, Ethiopia has appointed Eyob Tekalign as the new central bank governor. His mandate is to curb inflation, stabilize the Ethiopian birr, and push forward with reforms recommended by the IMF.

The Ethiopian government announced the appointment of Eyob Tekalign as the new central bank governor on Friday. Tekalign, the country's chief debt negotiator, takes the role at a time when Addis Ababa is working to stabilize its fragile economy.

Since 2018, Tekalign has served as the State Minister of Finance, where he was directly involved in discussions with official creditors and eurobond holders. Last October, he presented the country's strategy to investors for restructuring its nearly $29 billion in external debt.

Already a member of the bank's board, he succeeds Mamo Mihretu, who oversaw the gradual liberalization of the financial sector and the introduction of a more flexible exchange rate system. Tekalign takes charge of an institution facing immediate challenges: curbing double-digit inflation, stabilizing an exchange system weakened by a foreign currency shortage, and implementing an interest-rate-based monetary policy.

His appointment also signals a government priority to coordinate financial reforms with debt management. Ethiopia, which defaulted in December 2023, is currently in complex negotiations with bilateral creditors, including China, which holds $7.4 billion in debt, and Saudi Arabia, which holds $1 billion.

Tekalign's background as a U.S.-trained economist and his membership on several strategic bodies, such as EthioTelecom and Ethiopian Investment Holdings, aim to reassure partners and investors about the continuity of the reform program and the credibility of Ethiopia's macroeconomic management.

Olivier de Souza