Ethiopia’s total public debt has reached $51.8 billion, Finance Minister Ahmed Shide announced during a performance report to Parliament this week. Despite the significant figure, the Minister described the nation’s debt levels as “very healthy” and highlighted a strengthening capacity to meet international repayment obligations.
The report, presented to the House of Peoples’ Representatives Standing Committee on Plan, Budget, and Finance, breaks down the debt into two primary categories:
- External Debt: $33.5 billion
- Domestic Debt: $18.3 billion
A notable shift in the debt profile was revealed regarding state-owned enterprises (SOEs). Of the external debt, the federal government accounts for $22.1 billion, while SOEs hold $11.5 billion. Conversely, the federal government carries $17.5 billion of the domestic debt, whereas SOE domestic debt has plummeted to just $0.8 million.
Minister Ahmed explained that the sharp decline in SOE domestic debt is a result of ongoing macroeconomic reforms. Specifically, debts previously owed by these enterprises to the Commercial Bank of Ethiopia have been transferred to the Ministry of Finance to streamline the national balance sheet.
Repayment and Foreign Aid
Regarding fiscal performance, the government allocated 463.4 billion Birr for debt servicing this budget year, with 226.5 billion Birr already paid out in the first nine months.
On the revenue side, Ethiopia secured $2 billion in external resources during the same period—achieving 65.1% of its $3.1 billion target. The World Bank remained a critical partner, contributing $914.2 million of that total.
Renewed U.S. Partnership
The Minister also confirmed a landmark agreement with the United States, which will provide $1 billion annually in support. This agreement, pending cabinet approval, marks a significant restoration of aid. The funds are expected to alleviate pressure on the health, education, and agriculture sectors, which had struggled during previous funding pauses.