Regulatory Alerts2023-04-25
Added · Updated
External Loan and Supplier’s Credit (as Amended) Directives No. FXD/76/2021
These directives repeal and replace Directives No. FXD/71/2021, establishing requirements for the approval and registration of external loans and supplier’s credit by exporters, foreign investors, and the manufacturing sector. Foreign investors and manufacturing entities are subject to a debt-to-equity ratio limit of 60:40, while supplier’s credit must have a minimum 180-day credit period for foreign investors and one year for the manufacturing sector. The directives set all-in-cost ceilings based on maturity, ranging from six-month LIBOR or EURIBOR plus 2% for loans up to three years to plus 5% for those exceeding five years. Additionally, government and banks are prohibited from issuing guarantees for private loans, and all repayments in convertible foreign currency require prior registration with the National Bank of Ethiopia.