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Like Zambia, Ethiopia intensifies steps to restructure foreign debt

Published

2 years ago

July 12, 2022

Cash-strapped East African country, Ethiopia, has moved closer towards restructuring its debts under a common framework set up by the Group of 20 economies.

A source revealed on Tuesday that Ethiopia’s creditors’ committee will meet on Monday.

“Ethiopia’s creditors will meet on Monday,” said the source, providing no further detail.

IMF Managing Director Kristalina Georgieva told Reuters last week it was crucial to jumpstart a process that had failed to deliver a single result thus far, given worsening debt problems facing developing countries and even nations with middle-income economies.

Other African countries like Zambia, and Chad has reached out to the International Monetary Fund and the World Bank to persuade China and private creditors to accelerate work on debt treatments for the countries.

The secretary general of the International Chamber of Commerce, John Denton, in a letter to G20 finance ministers suggested that the war in Ukraine had compounded problems facing many developing countries by driving up food, fertiliser and energy prices, Denton said in a letter addressed to the ministers.

“We see a real risk of solvency problems creating a systemic developing country debt crisis,” Denton wrote. “This must be avoided at all costs given the severe downside risks such a scenario would create for trade and the global economy as a whole.”

Ethiopia has had many troubled regions recently with rebel activities in like zones Tigray, Oromia which has affected its economy. The World Bank, recently signed an agreement for a grant of $300 million to assist the country embark on reconstruction in conflict-hit areas of the country.

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

10 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.