Ethiopia becomes Africa's latest sovereign default

Ethiopia became Africa's third default in as many years on Tuesday after it failed to make a $33 million "coupon" payment on its only international government bond.

Africa's second most populous country announced earlier this month that it intended to formally go into default, having been under severe financial strain in the wake of the COVID-19 pandemic and a two-year civil war that ended in November 2022.

It had been supposed to make the payment on Dec. 11, but technically had up until Tuesday to provide the money due to a 14-day 'grace period' clause written into the $1 billion bond.

According to two sources familiar with the situation, bondholders had not been paid the coupon as of the end of Friday Dec. 22, the last international banking working day before the grace period expires.

Ethiopian government officials did not respond to requests for comment on Friday or over the weekend, but the widely-expected default will see it join two other African nations, Zambia and Ghana, in a full-scale "Common Framework" restructuring.