The Ethiopian government has announced that its comprehensive macroeconomic reform program has achieved tangible results, creating a foundation for a "strong and competitive"economy. In a statement released on December 29, 2025, the Government Communication Service said that the program has successfully addressed long-standing structural challenges that have hindered the nations growth for years.
The government maintains that its commitment to these reforms has fostered an economic environment characterized by internal capacity and global competitiveness. Key successes cited in the report include the stabilization of inflation, an increase in foreign exchange reserves, and the attraction of new investment flows.
A central component of this recovery was the decision to allow the foreign exchange rate to be determined by the market. This move was intended to ensure the Ethiopian currency reached its true market value while diverting foreign currency from the informal sector into the formal banking system. Officials noted that this shift was particularly effective in rescuing investment institutions that were on the brink of closure due to a chronic scarcity of US dollars.
The statement also highlighted significant progress regarding the countrys external debt. Following successful negotiations with creditor nations and financial institutions, the government secured the restructuring and cancellation of approximately $4.5 billion in debt. This addressed the burden of high-interest commercial loans that had previously strained the national economy. The resources saved from these debt repayments are now being redirected to bolster foreign exchange reserves and fund development projects across the country.
Furthermore, the government asserted that the transition to a transparent and predictable exchange rate system has significantly improved the confidence of foreign investors. This has led to an increase in capital inflows and a broader national economic awakening. The administration concluded that these reforms have saved the nation from potential collapse and elevated Ethiopias status within the global trade community. Moving forward, the government stated its primary focus will remain on increasing export trade, enhancing productivity, and promoting import substitution to ensure these gains are sustainable.
