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Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Ethiopia reaches a milestone in its debt relief process, the United States sanctions a major Rwandan gold refinery, and Cape Verde makes history at the FIFA World Cup.

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Ethiopia reaches a milestone in its debt relief process, the United States sanctions a major Rwandan gold refinery, and Cape Verde makes history at the FIFA World Cup.

After a tumultuous five-year struggle, there are signs that Ethiopia’s debt relief process may finally be nearing its end. On Monday, Addis Ababa announced that it had reached a preliminary deal to restructure its defaulted $1 billion international bond after private creditors threatened to sue the Ethiopian government in U.K. courts.

The restructuring has become a test case for the Group of 20’s Common Framework, which is designed to help developing nations unify debt negotiations among traditional Western creditors, non-Paris Club ones such as China, and private lenders.

Although Ethiopia’s debt relief process may be settled, it has highlighted divisions between sovereign creditors and private lenders as the two have argued over how to split financial losses—tensions that threatened to derail the steady growth that Ethiopia has seen in recent years.

In 2021, Ethiopia became one of four African nations to request a debt restructuring under the G-20 Common Framework amid a two-year civil war in the country’s Tigray region. It sought to restructure at least $13 billion in external loans.

No agreements had been made by December 2023, when the economic impact of the civil war led to a $33 million missed payment and Addis Ababa’s subsequent default on the $1 billion bond one year before it was due to be paid back in full.

After four years, Ethiopia reached a final agreement with foreign governments last July on restructuring $8.4 billion of bilateral loans, with $3.5 billion in debt relief. But a deal on the $1 billion bond held by private lenders has proved to be more elusive.

Ethiopia reached a preliminary agreement with the private holders of the Eurobond in January, but it was blocked by official bilateral lenders, led by China and France, who argued that the terms were too favorable to the private investors and insisted that they take similar losses to those accepted by sovereign governments.

In April, Private bondholders threatened to sue Ethiopia, and they rejected a new proposal by the country the following month.

The new deal still gives bondholders considerably more money than government creditors—and more than what was on the table in May, said Tim Jones, the policy director of Debt Justice, a U.K.-based organization. Private creditors have “threatened to sue or said they’re........

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