Ethiopia has now joined the ranks of African nations facing default, as it failed to meet interest payments following the expiration of a grace period on Monday.

Finance Minister Ahmed Shide revealed that Ethiopia was obligated to pay a $33 million coupon on December 11, but the government opted not to make the payment, citing its desire to treat all creditors equally.

This decision places Ethiopia in the company of other developing countries such as Zambia, Ghana, and Sri Lanka that have struggled with Eurobond defaults in recent times.

Senior Reforms Adviser at the Finance Ministry, Hinjat Shamil, confirmed on Monday that the payment had not been made and would not be fulfilled.

Ethiopia had previously reached an agreement with bilateral creditors to temporarily suspend debt payments, reflecting the economic challenges exacerbated by the civil war in the northern Tigray region.

In its restructuring proposal, Ethiopia has called on bondholders to extend the amortization maturity period from July 2028 to January 2032 and reduce the coupon rate from the current 6.625% to 5.5%.

Notably, the face value of the debt will remain at $1 billion, implying that creditors will not face reductions on their holdings, a move designed to avoid what is commonly known as a "haircut."

Earlier this month, an ad hoc committee of bondholders expressed disappointment, deeming Ethiopia's decision not to pay as both unnecessary and unfortunate.

The country has expressed its intention to renegotiate its financial obligations through the Group of 20's Common Framework, a mechanism gaining traction following successful debt restructuring efforts by Zambia and Ghana.

The Common Framework allows for coordinated debt relief from both public and private lenders, establishing standards for debt treatment.

As Ethiopia grapples with the economic fallout of the civil conflict in Tigray, which has adversely affected investor sentiment and economic growth, its approach to debt restructuring is being closely monitored.