Ethiopia’s Prime Minister Abiy Ahmed has announced a dramatic reduction in the country’s foreign debt, revealing that the figure has plunged from $23 billion to $4.5 billion within six years, Business Insider reports.
The prime minister described this as a pivotal step toward achieving economic self-reliance.
Speaking before lawmakers in Addis Ababa, Ahmed credited the decline to the government’s Homegrown Economic Reform Programme launched in 2019.
The initiative, he said, has restored macroeconomic balance, boosted domestic revenue, and strengthened Ethiopia’s capacity to fund growth internally.
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“The economy is growing without foreign loans. We have built a system that stands on Ethiopia’s own capacity,” Ahmed declared while addressing the House of People’s Representatives.
According to the Prime Minister, Ethiopia’s annual revenue—once at 170 billion birr (around $2.95 billion)—is projected to reach 1 trillion birr (about $17.3 billion), reflecting the country’s strengthened fiscal performance.
Ahmed also disclosed that the government spent 440 billion birr ($7.6 billion) to stabilize inflation through subsidies directed toward fuel, fertilizer, and public sector wages, as well as social initiatives such as school feeding programs. As a result, inflation has eased to 11.7%, the lowest level since the reform program began.
“We have used every possible instrument to ease the cost of living. Our economy is standing tall again,” he added.
However, economic analysts warn that the impact of the reforms is yet to trickle down to many Ethiopians. Despite the notable decline in inflation, high food and housing costs continue to strain household incomes.
Experts argue that this challenge mirrors broader fiscal pressures across African economies navigating global market shocks and internal restructuring.
Ethiopia, one of Africa’s fastest-growing economies, has been working to wean itself off external borrowing while encouraging investment in local industries.
The government’s reform agenda aims to build sustainable growth rooted in domestic productivity and reduced dependence on international lenders.
