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Debt Crisis: Zambia to cancel over $2 billion projects financed with loan

Published

2 years ago

July 11, 2022

Zambia is been innovative at solving its debt crisis as the country has decided to cancel more than $2 billion worth of projects financed by commercial loans.

The medium-term budget plan published by the ministry of finance on Saturday showed the country’s plan to reduce the risk of accumulating more non-concessional debt.

A high-level team of the International Monetary Fund (IMF), deputy managing director, Antoinette Monsio Sayeh last month visited Zambia on two-day to hold discussions with the country’s officials on the thorny issue of debt.

The Zambian President Hakainde Hichilema in April, during the first quarter 2022 Economic Conference in Lusaka, said China had come on board to commit and join other creditors in the country’s debt restructuring process.

The country’s debt profile has been spiraling in recent years owing to issues predating the pandemic, leaving creditors wrangling over who should take losses on loans.

Zambia opted to bow out of a $42.5 million eurobond repayment in 2020, becoming the first African nation to default on its debt in the Covid-19 era. The country was struggling with a debt burden of almost $32 billion, around 120% of its gross domestic product.

Zambia is second-largest copper producer in Africa with a forecast to grow 4%, 4.1% and 4.4% in 2023, 2024 and 2025, respectively.

Related Topics:debt profile Featured Zambia

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.