Ethiopia drew $4 billion in foreign direct investment in the fiscal year to July 2025, up 2.2% from the previous year, the Ethiopia Investment Commission said on Tuesday, a data point closely watched as the country prepares to restructure its sole $1 billion Eurobond (XS1151974877).
The Commission said IMF-backed reforms—including moves toward a floating birr—have lifted investor sentiment. Authorities issued 525 new investment permits during the period and approved 19 expansions by existing foreign projects, targeting manufacturing, agriculture and ICT.
Addis Ababa has proposed an 18% principal haircut in the bond restructuring, arguing Ethiopia faces an insolvency challenge. A group of bondholders rejects that view, calling the strain a liquidity problem and pointing to solid export earnings.
The IMF has warned of downside risks to the balance of payments from weaker-than-expected aid inflows and FDI. Ethiopia said in July it completed a debt rework with bilateral creditors and expects to open formal negotiations with bondholders soon.