The Ethiopian government on Wednesday announced it had closed its embassy in Algiers as it began to cut costs on its foreign policy obligations.

It cited financial constraints in closing a mission to a country that had in the past hosted talks between Eritrea and Ethiopia, and which produced a document known as the Algiers Peace Agreement signed on December 12, 2000 to end the war between Ethiopia and Eritrea.

This is the first foreign missions to be closed in a plan to save on costs. In July, Ethiopia announced it would reduce foreign missions by at least half to cut on costs.

In a statement, the Ethiopian embassy in Algeria cited the economic crisis exacerbated by the negative consequences of the Covid-19 pandemic.

The latest decision, according to the embassy, is part of the country's plan to introduce new reforms aimed at establishing effective diplomatic representation across the globe.

Ethiopia’s interests in Algeria will now be covered by a non-resident ambassador based in the Ethiopian capital, Addis Ababa.

“The decision can be reconsidered any time in the future if the economic situation in the country (Ethiopia) improves,” the embassy said in a statement.

“The embassy wishes to emphasise that this temporary measure will not in any way affect the strong and historic relationship between Ethiopia and Algeria based on mutual understanding.”

In early July, the Horn of Africa nation changed the accreditation arrangements for dozens of its diplomatic missions across the globe.

In a July 5 briefing to Ethiopian lawmakers, Prime Minister Abiy Ahmed said the country will shut down several embassies to manage costs, with most diplomats working as non-resident ambassadors.

“Ethiopia shouldn't have 60 or so embassies and consulates in the present moment. Instead of throwing US dollars everywhere ... at least 30 of the embassies should be closed. The ambassadors should instead be here,” Abiy said.

He then said that the Ethiopian ambassador to Kenya, for example, could be based in Addis Ababa and only make field trips to meet with officials, while following events in Nairobi through the media. The Ethiopian Mission in Nairobi later clarified that the Premier had only used Nairobi hypothetically, but will not close the embassy in the Kenyan capital.

Abiy stressed the need for the Ethiopian Ministry of Foreign Affairs to undergo serious reforms.

“With the current situation Ethiopia is in, the country doesn't need to have as many as 60 or so embassies and consulates," he said.

Although diplomatic establishments are expensive, it is not clear how much money Ethiopia intends to save by closing embassies.

The latest move comes as Ethiopian prime minister, Abiy Ahmed, launches new shuttle diplomacy in eastern Africa.