VenturesNow

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

Published

9 hours 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.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

9 hours 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.