Members of the Ethiopian community protest at the White House in Washington DC. (Photo: J. Countess/Getty Images)

The US expressed alarm about continuing human-rights abuses in Ethiopia that may impact its ability to secure funding from multilateral lenders, as the International Monetary Fund prepares a mission to the country to discuss a crucial bailout.

Prime Minister Abiy Ahmed’s administration has faced growing censure over tactics used by federal army forces to quell violent insurgencies across the country, with alleged extrajudicial killings and drone strikes leaving dozens of civilians dead.

“We continuously monitor the human rights situation in Ethiopia to assess whether there is a pattern of gross violations that would affect US support for international financial institution assistance under the International Financial Institutions Act,” the State Department said in an emailed response to questions. “The US government is alarmed by continuing reports of human rights abuses and violations in Amhara and Oromia which implicate the government and non-state actors.”

The timing of the criticism coincides with preparations by the IMF to send a delegation to Addis Ababa in the coming weeks to discuss an economic program and funding needed to fill an estimated $11.5 billion financing gap the government expects to face over the next four years. The US is the IMF’s largest shareholder and its most powerful board member, and previously used the IFIA to block IMF funding to Ethiopia during a war in Ethiopia’s northern Tigray region two years ago.

Ethiopia has applied to restructure billions of dollars of public debt using the Group of 20’s Common Framework mechanism that seeks to provide comparable relief from creditors including Chinese state-owned lenders and bondholders. The Horn of Africa nation needs an IMF program in place to benefit from the Common Framework, and bilateral creditors have set a March 31 deadline for an accord under the terms of a debt-service suspension they agreed in November.

The country has $1 billion of eurobonds falling due in December. The price of the debt reached a record low of 49.74 cents on the dollar on Oct. 7 and traded at 69.99 cents by 11:51 a.m. in London on Monday — little changed from a year earlier.

The State Department cited examples of violence including an attack in the northern Amhara region in January in which at least 60 civilians died, in addition to “indiscriminate drone strikes, as well as reports of arbitrary detentions, restrictions on press freedom and shutting down of the internet.”

Last week, Amnesty International said it had documented federal soldiers conducting extrajudicial killings of civilians in Bahir Dar, the capital of Ethiopia’s Amhara regional state, where a protracted war has been ongoing since August, when the government announced it will dissolve all regional militias and integrate them into the national security forces.

Opposition groups have reported the widescale use of drones in strikes that have killed civilians in both Amhara and Oromia, the country’s largest regional state. The authorities also arrested a French journalist in February and accused him of a “conspiracy to create chaos in Ethiopia” after he met an Oromia opposition figure, before later releasing him.

Ethiopian government spokesman Leggesse Tulu and Selamawit Kassa, state minister of the government communication service, didn’t respond to requests for comment sent by text message.

While violence in Ethiopia has previously been a factor in talks with the IMF, the unrest is unlikely to be a major consideration in the fund’s decision-making, said Connor Vasey, managing consultant at Africa Matters Ltd., a business advisory firm. US Special Envoy for the Horn of Africa Mike Hammer previously signaled that the US’s primary focus in its own engagement with the IMF is to support the Ethiopian economy.

It’s also possible that the March 31 deadline set by creditors in November may be shifted, said Vasey.

“⁠If the March deadline passes, it seems very likely that the official creditors will roll it over,” said Vasey. “Addis is negotiating in good faith and they will understand the political complexities behind some of the adjustments the Fund is looking for.”

Any cash injection into Ethiopia’s beleaguered economy is expected to be divided equally between IMF loans, budgetary support from the World Bank and other bilateral lenders, along with a restructuring of the country’s debt.

Ethiopia’s total public external debt was $27.8 billion at Sept. 30, according to the Finance Ministry. The government hasn’t yet publicized how much of this it will restructure. Other Common Framework cases including Ghana and Zambia have excluded multilateral debts, and these account for more than half of Ethiopia’s external public liabilities.

The World Bank is prepared to disburse a multi-billion dollar package to Ethiopia as long as certain reforms are agreed, country director Ousmane Dione said in an interview in Addis Ababa last week. Officials are awaiting the latest draft of Ethiopia’s so-called Homegrown Economic Reform Agenda, before making any decisions.

“I have to see the final version of the reform plan,” Dione said. “I want to see how it reflects common priorities with the World Bank. I hope it will be aligned with our country partnership framework in order to give us the level of comfort.”

The IMF delegation is expected to arrive in Addis Ababa this month. A spokesman for the fund declined to provide a specific date for the visit.

 

Source: Bloomberg News by Simon Marks --With assistance from Matthew Hill.

 

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