In an internal paper seen by Reuters, World Bank consultant Brian Pinto and its chief economist Indermit Gill assess the Debt Sustainability Analysis (DSA), dated July and prepared by the IMF and staff of the International Development Association (IDA), the World Bank's fund for poorest nations.

The authors suggest that based on the DSA, Ethiopia is facing a short-term liquidity crunch, and not a long-term solvency issue, a point of contention between the government and holders of its $1 billion international bond that is in default.

"We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty," Pinto and Gill wrote in the paper from earlier this month. "The disagreements about Ethiopia's debt sustainability will be repeated as other countries become debt distressed."

Asked about the paper, a World Bank spokesperson said: "We generally don’t comment on internal deliberations between the World Bank and the IMF, or any of our partner institutions."

Ethiopian State Finance Minister Eyob Tekalign told Reuters IMF and World Bank teams had just revisited the DSA as part of the latest review of the Fund's loan programme and there had been no major change to the position.

--Reuters--