Exclusive: World Bank staff question Ethiopia debt assessment reached with IMF, memo shows
Memo critical of Ethiopia's debt sustainability analysis
Ethiopia's Eyob says IMF, World Bank reviewed the analysis recently, no major changes made
Ethiopia and its bondholders are locked in standoff
LONDON, Dec 23 (Reuters) - Some World Bank staff have criticised an assessment of Ethiopia's finances conducted with the International Monetary Fund, questioning whether the analysis that underpins the country's debt restructuring may be "faulty".
In an internal paper seen by Reuters, World Bank consultant Brian Pinto and its chief economist Indermit Gill assess the Debt Sustainability Analysis (DSA), dated July and prepared by the IMF and staff of the International Development Association (IDA), the World Bank's fund for poorest nations.
The authors suggest that based on the DSA, Ethiopia is facing a short-term liquidity crunch, and not a long-term solvency issue, a point of contention between the government and holders of its $1 billion international bond that is in default.
"We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty," Pinto and Gill wrote in the paper from earlier this month. "The disagreements about Ethiopia's debt sustainability will be repeated as other countries become debt distressed."
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