S&P Declares Ethiopia in Default
Standard & Poor’s (S&P) Global Ratings declared Ethiopia in default on a missed bond payment of 33 million dollars. The East African nation failed to make the payment on its 2023 bond due on December 15th.
Background of Ethiopia’s Bond Payment
The bond payment was part of a series of Eurobonds issued by Ethiopia in 2023. The bonds were issued in two tranches, with the first tranche of 500 million dollars maturing in 2028 and the second tranche of 1 billion dollars maturing in 2033. The 33 million dollar payment was due on December 15th, 2023.
S&P’s Rating of Ethiopia’s Default
S&P Global Ratings declared Ethiopia in default on the missed bond payment. The rating agency said that Ethiopia had failed to make the payment on time and that it had not received any payment from the government.
S&P also noted that Ethiopia had not made any effort to restructure the debt or to negotiate a payment plan with its creditors. The rating agency said that Ethiopia had not provided any explanation for its failure to make the payment.
Impact of Ethiopia’s Default
The default on the 33 million dollar bond payment has had a significant impact on Ethiopia’s economy. The country’s currency, the birr, has weakened significantly since the default was announced.
The default has also had a negative impact on Ethiopia’s credit rating. S&P has downgraded Ethiopia’s credit rating from B+ to B-. This means that Ethiopia is now considered a higher risk borrower and will have to pay higher interest rates on any future loans.
Ethiopia’s Debt Burden
The default on the 33 million dollar bond payment is just the latest in a series of financial difficulties for Ethiopia. The country has been struggling with a large debt burden for some time.
According to the International Monetary Fund (IMF), Ethiopia’s total public debt was estimated to be around $37 billion in 2023. This is equivalent to around 70% of the country’s GDP.
Ethiopia’s Economic Outlook
The default on the 33 million dollar bond payment has had a significant impact on Ethiopia’s economy. The country’s currency, the birr, has weakened significantly since the default was announced.
The IMF has also warned that Ethiopia’s economic outlook is uncertain. The IMF has said that the country’s economic growth could slow in the coming years due to the impact of the default and the country’s high debt burden.
Ethiopia’s Response to Default
The Ethiopian government has yet to respond to the default on the 33 million dollar bond payment. The government has not made any public statements on the matter and has not indicated whether it plans to restructure the debt or negotiate a payment plan with its creditors.
Conclusion
S&P Global Ratings declared Ethiopia in default on a missed bond payment of 33 million dollars. The default has had a significant impact on Ethiopia’s economy, with the country’s currency, the birr, weakening significantly since the default was announced. The Ethiopian government has yet to respond to the default and has not indicated whether it plans to restructure the debt or negotiate a payment plan with its creditors. The IMF has warned that Ethiopia’s economic growth could slow in the coming years due to the impact of the default and the country’s high debt burden.