Is Ethiopia’s Debt Restructuring Enough—or Merely Postponing a Deeper Crisis?
Debt restructuring is often presented as a turning point—a reset that restores sustainability, credibility, and growth momentum. For Ethiopia, recent debt restructuring efforts have been framed as a necessary intervention to stabilize an economy strained by years of heavy public investment, foreign exchange shortages, and external shocks. Relief from immediate debt servicing pressures has provided fiscal breathing space and reduced the risk of near-term default. Yet the more fundamental question is not whether restructuring helps , but whether it resolves the underlying conditions that made debt distress inevitable in the first place . History offers a sobering lesson: debt restructuring without structural transformation frequently postpones crisis rather than prevents it. This essay argues that Ethiopia’s debt restructuring, while necessary and beneficial in the short term, is insufficient on its own . Without deep reforms to growth drivers, export capacity, state finances, and insti...