China will allow Ethiopia to suspend payments on debt maturing in the 2023/24 fiscal year under a framework set up by the Group of 20 economies, Ethiopian Prime Minister Abiy Ahmed's office said.
In early 2021, Ethiopia requested a debt rework under the G20's Common Framework, a debt restructuring initiative designed to help low-income countries get back on their feet. Progress was complicated by a two-year war in the northern Tigray region that ended last November.
China has committed to lending $13.7 billion to Ethiopia since 2000, but it was not immediately clear how much of the debt was maturing in the 2023/24 (July 8-July 7) fiscal year.
"President Xi Jinping expressed admiration for the Prime Minister's leadership in spearheading national development and indicated that China will suspend payments on debt maturing in the period 2023/2024 as part of the common framework agreement," Abiy's office said in a post late on Wednesday on X, formerly known as Twitter.
Abiy and China's Xi met in South Africa on the sidelines of the BRICS summit of leading developing countries. Ethiopia was invited to join the bloc on Thursday.
Ethiopia also has a $1 billion international U.S. dollar bond, known as a eurobond, maturing in December 2024.
Earlier this year, an informal group of international bondholders proposed
extending the bond's maturity to Ethiopia's government, which did not publicly respond to the suggestion.
(Reporting by George Obulutsa; Additional Reporting by Rachel Savage in Johannesburg and Marc Jones in London; Editing by Aaron Ross and Bernadette Baum)