Ethiopia Defaulted on Private Creditors After Negotiations Failed

Ethiopia, the second most populous African country, defaulted on its sole international bond yesterday, failing to pay a $33 million coupon to private bondholders. Previously, public sector creditors (governments, including China) had agreed on a suspension of debt service following a “framework” negotiated at the G20 - one which had been applied in the last three years to two other African countries, Zambia and Ghana. However, the private bondholders were not so understanding.