IMF Deputy Managing Director Commends Ethiopia’s Impressive Reform Momentum

Addis Ababa, December 5, 2025— International Monetary Fund (IMF) Deputy Managing Director Nigel Clarke has lauded Ethiopia’s sweeping economic reforms, describing the Homegrown Economic Reform Agenda as “nothing short of impressive”.

The Deputy Managing Director, who is on a work visit to Ethiopia, had discussions with Finance Minister Ahmed Shide, National Bank of Ethiopia Governor Eyob Tekalegn and Planning and Development Minister Fitsum Assefa.

Finance Minister Ahmed Shide and IMF Deputy Managing Director Nigel Clarke held a joint press briefing in Addis Ababa today.

At the briefing, Clarke said the visit provided an important opportunity to observe firsthand the progress of Ethiopia’s “historic economic reforms,” which are anchored in a four-year IMF-supported program.

According to him, the economic reforms under implementation are geared toward transforming the Ethiopian economy and building a platform for long-term sustainable growth.

He said that Ethiopia has registered dramatic improvements in key macroeconomic indicators within just 18 months of entering the Extended Credit Facility (ECF) program.

The Deputy Managing Director noted that foreign exchange reserves are significantly strengthened and inflation rate has registered a remarkable decline driven by coordinated policy actions.

Strong growth in goods of export earnings reflects renewed confidence and improved formal repatriation of proceeds, tax revenues have surged year over year reversing nearly a decade of decline in the tax-to-GDP ratio, he added.

“These are incredibly important achievements of the reform program and achievements on which Ethiopia can continue to build,” Clarke said, emphasizing that the next phase must focus on continuity and sustaining momentum.

Finance Minister Ahmed Shide said the visit of IMF Deputy Managing Director Clarke underscores the depth of the partnership between Ethiopia and the IMF as well as the seriousness with which both sides are pursuing Ethiopia’s economic reform agenda.

Ethiopia is implementing a comprehensive economic reform program aimed at stabilizing the macroeconomy, modernizing institutions, fostering private sector-led growth, and unlocking new sources of productivity, he added.

The Minister stated that the staff mission for the fourth review of the Extended Credit Facility has been completed, with a staff-level agreement expected to be finalized and shortly expected to pave the way for the next phase of cooperation.

Ahmed noted that inflation has declined to 10.9 percent in last month, down from 16 percent a year earlier, following coordinated fiscal and monetary policy actions.

Foreign exchange market has stabilized and is now operating with greater flexibility while foreign-exchange supply to the market, particularly to the private sector, has improved. As a result, market efficiency is expected to continue strengthening as reforms deepen, he elaborated.

 Regarding government revenue mobilization, domestic revenue collection rose by 61.7 percent to 1.3 trillion in 2024/25 and the tax to GDP ratio increased to 7.8 percent after nearly a decade of decline.

Export earnings surged by 119.2 percent to USD 8.3 billion as exchange-rate reforms reduced illicit trade and encouraged formal repatriation of export proceeds, Ahmed stated.

According to the Finance Minister, Ethiopia has shifted from broad subsidies to targeted support for low-income households, significantly increasing poverty-targeted spending on health, education, and the Productive Safety Net Program.

Ethiopia is undertaking a four-year IMF-supported program designed to address macroeconomic imbalances and support the shift toward a more resilient, market-oriented economy.