Read < 1 minute

Ethiopia will enjoy 4.9 billion U.S. dollars in relief from debt repayments when it completes a restructuring, State Finance Minister Eyob Tekalign said on Friday.

The East African country is putting its long-delayed debt overhaul back on track after securing a new International Monetary Fund financing programme.

“We will sign and finalise with each individual (creditor) country over the course of the next few months,” Eyob told Reuters, referring to the estimated savings to Ethiopia as a result of the restructuring.

Total external debt stood at 28.38 billion U.S. dollars in March this year, data from the finance ministry showed.

Prime Minister Abiy Ahmed, explaining recent economic reforms in a televised speech late on Thursday, said the estimated savings would include $200 million from the restructuring of its $1 billion Eurobond .

Eyob said that could be accomplished through “nominal reduction” of the value of the bond as part of the debt re-work.

Abiy defended this week’s switch to a market-determined foreign exchange rate, saying it aimed to close the gap between the official and black market rates and did not amount to a devaluation of the currency.

The central bank allowed the birr to float freely on Monday, fulfilling a key condition for securing financial support from the International Monetary Fund and other creditors, and for putting the nation’s long-delayed debt restructuring back on track.