Ethiopia failed to make an interest payment on the bond making it the latest defaulter in Africa.
11th of December was the deadline for the Horn of Africa country to pay a $33 million coupon with a grace period ending on Monday.
Ethiopia now joins a growing list of countries including Zambia, Ghana and Sri Lanka that have fallen behind on their eurobound payments in recent years.
Ethiopia’s Minister of Finance said that the government wants to treat all creditors similarly and so did not want to make the payment.
A senior reform adviser at the Ministry of Finance revealed on Monday that the payment has not been made and will not be made.
Last month Ethiopia and its bilateral creditors arranged to stop making loan payments. The government requested bond holders prolong the maturity from July 2028 to January 2032. Ethiopia also requested creditors to lower the yield from the existing 6.625% to 5.5% in its counter-proposal for a restructuring.
Ethiopia is attempting to restructure its debt using the common framework of the group of 20. The G20’s plan is gaining traction following Zambia and Ghana’s restructuring successes.
Ethiopia has been attempting to restructure its debt since 2021 the civil War in Northern area soured investor confidence and stunted economic growth. The country finally secured an in-principle deal with bilateral creditors to halt debt payments.