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

Nigeria wants $2.25 billion World Bank loan

Published

13 hours ago

April 23, 2024

Ifeoluwa Dada

Nigeria’s Finance Minister, Wale Edun, has revealed that the country is seeking up to $2.25 billion in World Bank loans and expects the bank’s board to approve the request in June.

The move was announced in a statement following the International Monetary Fund/World Bank spring meetings in Washington, D.C as the country also aims to issue diaspora bonds later this year to attract much-need foreign exchange into the country.

The World Bank loans would include $1.5 billion for development policy and $750 million for program-for-results, the statement said. It also said that the bank would meet in June to decide whether to approve the plan in its entirety.

The multilateral body is yet to comment on the revelation at press time.

Nigeria one of Africa’s biggest oil producers has struggled lately mainly over industrial-scale crude oil theft, and troubles getting foreign currency, which caused its naira currency to drop to all-time lows against the U.S. dollar. It has since recovered, though.

Already, the country is on record levels of debt, high unemployment, and large amounts of money from the central bank. However, Edun has insisted that the government had cut the money it borrowed from the central bank in half.

VenturesNow

Ghana’s finance minister anticipates debt restructuring MoU with lenders

Published

1 day ago

April 22, 2024

Ifeoluwa Dada

Ghana’s Finance Minister has announced that the country’s two main creditors will send him a draft Memorandum of Understanding (MoU) on a restructuring deal in May, signifying a major progress in the country’s debt reform.

Once the MoU is signed, it will make public the deal that was made in January to restructure $5.4 billion in loans with its official creditors, such as China and France.

The restructuring is a big step toward Ghana getting rid of its debt as it works to get out of the worst economic crisis in a generation. It should also allow the country to get more money from its $3 billion IMF program.

Mohammed Amin Adam said he was sure the International Monetary Fund (IMF) and the World Bank would work together at the Spring Meetings in Washington, D.C. In June, the Monetary Fund’s executive board will agree to review its staff-level deal.

From 2023 to 2028, Ghana’s national debt to gross domestic product level was supposed to go down by 15%. This guess says that the number will have gone down every year for six years, ending at 69.96% in 2028.

Ghana didn’t pay back most of its foreign loans in December 2022 because it became too expensive to do so. But now it needs to work out a deal with private holders of about $13 billion in foreign bonds. It has also changed most of its domestic debt.