• Ethiopia may receive about US$261 million once the review is approved.
• The ECF programme supports the country’s Homegrown Economic Reform (HGER) agenda launched in July 2024.
• Recent reviews show improved macroeconomic data: higher exports, better reserves, reduced inflation and strengthened government revenue.

The International Monetary Fund (IMF) and the Ethiopian government have agreed at staff level to conclude the fourth review of the four-year, US$3.4 billion Extended Credit Facility (ECF), which means that, once formally approved, Ethiopia is eligible to draw about US$261 million under the current arrangement.

The ECF was originally approved by the IMF’s Executive Board on 29 July 2024, as part of efforts to support the country’s Homegrown Economic Reform (HGER) agenda — a sweeping program aimed at restoring macroeconomic stability, addressing foreign-exchange shortages, mobilizing domestic revenues, and laying the groundwork for private-sector-led growth.

Under previous reviews, Ethiopia had already drawn substantial sums under the ECF. The first review, completed in late 2024, unlocked about US$340.7 million.  The second review, finalized in January 2025, released around US$248 million.  The third review, combined with the 2025 Article IV consultation, allowed disbursement of about US$262.3 million, raising total disbursements under the ECF to roughly US$1.873 billion by July 2025.

In its December 2025 public statement, IMF staff highlighted favorable macroeconomic developments over the past 18 months: accelerating output supported by strong performance in gold, electricity generation, and agriculture; a doubling in the value of goods exports; a decline in inflation; and a solid increase in government revenue.  They also noted steps taken toward liberalizing the foreign-exchange market, modernizing the monetary policy framework, and strengthening financial-sector regulation.

At the same time, the IMF reaffirmed that sustaining the reform agenda remains critical. In particular, the Fund flagged the need for a tight monetary stance to anchor inflation expectations, prudent fiscal management, continued efforts at domestic revenue mobilization, efficient expenditure control, and reforms aimed at improving the business environment and encouraging private investment.

On the external-debt front, Ethiopia’s authorities and the IMF noted that negotiations under the G20 Common Framework for debt treatment remain ongoing. A Memorandum of Understanding signed in July 2025 with the Official Creditor Committee represents a key step; the next stage is reaching bilateral agreements with official creditors.

The fourth-review agreement was reached following a mission led by IMF staff, who visited Addis Ababa between October 30 and November 13, 2025, and then had follow-up discussions both virtually and in person during December 3–5. The mission met with senior Ethiopian officials, including the Finance Minister and the Governor of the National Bank of Ethiopia.

With the new tranche expected soon, the ECF remains the main vehicle supporting Ethiopia’s reform efforts  , providing balance-of-payments support, rebuilding reserves, and offering fiscal breathing space. But success, according to the IMF, depends on whether the country maintains its reform momentum and implements the policies underpinning the agreement.

By Cynthia Ebot Takang