Mereja.Forum

[Abdisa]

Ethiopia edges towards default as bondholder talks falter



Reuters
December 8, 2023

Summary

Ethiopia facing default on $1 bln international bond
Talks with key bondholders broke down this week
Government to hold call on next steps next week

Dec 8 (Reuters) - Ethiopia appeared to be on the brink of a debt default on Friday after talks with key holders of the African country's $1 billion international bond ended without agreement.

The combined cost of the COVID pandemic and the recently-ended civil war in its northern Tigray region has left Ethiopia, long seen as one of Africa's most promising economies, struggling to pay its debts.

Ethiopia's finance ministry said that "acute external liquidity pressures" meant it had told bondholders that it would not be in a position to pay a $33 million bond interest payment due on Dec. 11, an event which would trigger a default.

"Unfortunately, in the short time available between commencement of discussions and the upcoming interest payment date, an agreement... could not be reached," the finance ministry added in a statement.

A bondholder committee said it viewed the decision not to make the $33 million payment "as both unnecessary and unfortunate" given what it said was very short notice to engage in talks "as well as the presentation to the committee of the decision not to make the coupon payment as a fait accompli".

It added it was open to "constructive and proactive engagement with the Ethiopian authorities".

The finance ministry said Ethiopia would "broaden the engagement with the holders of its Eurobond" and hold a call next week to set out a possible proposal for the debt.

It said that during the talks with bondholders it had outlined an "initial restructuring proposal" and then after a counter offer from bondholders, a final proposal.

This would involve pushing back the planned 2024 repayment date, cutting the coupon rate to 5.5% from 6.625% as well as staggering more of the interim payments, it added.

The $1 billion bond , maturing in December 2024, was last bid around 61 cents on the dollar with a 66% yield.

Reporting by Bhargav Acharya and Marc Jones; Additional reporting by Rachel Savage and Karin Strohecker; Editing by Alexander Winning, Alexander Smith and Susan Fenton

[Abdisa]

A country defaults when it is unable to repay its debt obligations, causing serious economic crisis for its population, which includes inflation, currency devaluation and austerity measures. In such circumstances, the troubled country, if it so happens to be a dirt poor country, its leaders effectively place its sovereignty at the hands of foreign powers, making it a neo-colony.

If this doesn't scare you, nothing will.

[Abdisa]

A new palace for Ethiopia’s prime minister brings evictions and dissent in a country beset by hunger and war



In a country where hunger and war persist, Ethiopian Prime Minister Abiy Ahmed is facing criticism for a multibillion-dollar construction project that would reportedly include a national palace and luxury villas for him and his top officials.

Ethiopian journalists and other sources have reported that the project could cost US$10-billion to US$15-billion, at a time when Ethiopia is seeking billions of dollars in foreign loans to rebuild its war-shattered economy.

Known as the Chaka (forest) Project, it will reportedly include three artificial lakes, a luxury hotel, conference halls, a waterfall, a zoo, a cable car and imported palm trees, along with the palace and villas.

To build the palace project, government workers are bulldozing land, chopping down trees, destroying older homes and evicting hundreds of residents to make room for new roads.

Bezunesh Taddesse, a 67-year-old widow and retired math teacher, found out about her eviction when her name appeared in an official notice on a church wall last year.

Despite the government’s promise of private funding, it is using public money for building roads and clearing land for the palace, Mr. Biru said in a commentary on the Addis Insight website.

[Abdisa]

Abiy visits Dubai and sees all the modern marvels oil money can buy, and then he thinks he can build the same things for himself and his cronies in Ethiopia with money he doesn't have, so he shuttles around the world soliciting loans for his pet projects. It must be a curse.

[eritrea]

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[DefendTheTruth]

Yes, it is scary. We have to resort to exporting human organs to mitigate the problem of the shortage of foreign currency.

[Fiyameta]

In 2017, Forbes Magazine wrote:

1. The amount of American financial aid received by the Tigray regime since it took power: $30 billion.

2. The amount stolen by Tigray's leaders since they took power: $30 billion.

The financial aid was given to the Tigray leaders as a reward for illegally occupying Eritrean territories, invading and occupying Somalia, and destabilizing the Horn of Africa region. For the US government, didn't matter if the money got stolen, so long as it achieved its intended purposes.

But what is worse is, the $27 billion dollars the agame borrowed and pocketed, leaving the Ethiopian people to carry the burden of the debt. Debt forgiveness, by design, is only applicable to money borrowed and spent on buying military hardware from countries that give out the loans. If the money is stolen, then you're out of luck.

Abiy had the opportunity to turn things around by eliminating the Tigray terrorists when he had the upper hand. But the moment he fell for Blinken's cheap tricks urging him to order the withdrawal of EDF from Tigray in exchange for trade opportunities, he exposed himself as an incompetent buffoon who didn't have what it takes to be the 7th king. After his mega blunders, the only available option to him was to follow the foot steps of the agame and become a mercenary for hire.

[DefendTheTruth]

[Educator]

No doubt you've been doing it already.

Yes, it is scary. We have to resort to exporting human organs to mitigate the problem of the shortage of foreign currency.

[Abere]

DDT የእርጉዝ ሴት ሆድቃ ቀድዶ ፅንስ አውጥቶ የሚበላውንስ /cannibal/ ምን እንበለው?

Yes, it is scary. We have to resort to exporting human organs to mitigate the problem of the shortage of foreign currency.

[quindibu]

A comedian quipped during US invasion of Iraq that it would be great to catch one Tomahawk cruise missile in your hands before it lands on the ground, and that would make you an instant millionaire- given the cost of one Tomahawk missile ......

The PP geniuses are also busy peppering the Amhara region with expensive drone missiles/rockets, and threatening the region with 'give me what I want or else' infantile tantrum, while the nation is gripped with famine and other economic and political woes. At a risk of sounding cold-blooded, Ethiopians may equally quip: isn't that nice to catch one of these rockets?

[DefendTheTruth]

Yes, they are "peppering the Amhara region" but that should only be a rehearsal for what yet to come somewhere else, hopefully very soon. That would be the time when you could get the opportunity to tell your stories in more elaborate terms.

[DefendTheTruth]

Yes, we are "peppering" but be assured that then after we will be at your own doorsteps, seem the words of the Chief of Staff of the nation to imply.

The call for the encampment of the NDF was orchestrated by the likes of the traitor in the name of Andargechaw Tsigie, who takes the orders directly from his god father Issu the Merzu.

[Fiyameta]

The one-legged, coward, illiterate, low IQ, zombie agame Defend-The-Lie who squandered the lives of 1.5 million of his agame people in mercenary wars is full of sh!T.

[Fiyameta]

We Eritreans can raise $33 Million in 3 Days!

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