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Mozambique, IMF reach $63.8 million Extended Credit Facility agreement



As Mozambique continues to push for an Extended Credit Facility (EFC) to better its economic situation, the country and the International Monetary Fund (IMF) team reached an agreement.

The agreement is a staff-level agreement on the economic and financial policies that could support the approval of the First Review of the program under the ECF arrangement.

The agreement awaits the approval of the IMF Executive Board in December, which would enable the disbursement of about US$63.8 million.

“All quantitative and structural benchmarks set for the first review have been met and good progress was made on the broader structural agenda. Looking ahead, the macroeconomic environment remains challenging.”

“The authorities aim to continue implementing their ambitious economic reform agenda, including a sovereign wealth fund law, reform of public sector remuneration, and the amendment of the public probity law.”

The World Bank June predicted that the economic growth in Mozambique is expected to accelerate in the medium term averaging 5.7% between 2022 and 2024.

The ECF provides financial assistance to countries with protracted balance of payments problems. It was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis.


Tanzania raises fuel prices for 4th consecutive month



Tanzania’s Energy and Water Utilities Regulatory Authority (Ewura) has announced an increase in the prices of petroleum products.

The increase, which takes effect from 4th October, is the fourth in consecutive months, with diesel taking the biggest hit. Currently at the capital city of Dar es Salaam, a litre of petrol will now cost Tsh3,281 ($1.31), up from Tsh3,213 ($1.29). A litre of diesel will now cost Tsh3,448 ($1.38), up from Tsh3,259 ($1.30). Kerosene prices have also increased, with a litre now costing Tsh2,943 ($1.18).

The price increase, according to Ewura, is the result of a number of factors, such as rising international fuel prices, higher export taxes, a decline in Opec+’s oil production, and economic sanctions imposed by Western nations against Russia.

“The price increase has been compounded by global factors, with global fuel prices skyrocketing by 4.21%, putting a strain on export charges, which increased by 17% for petrol, 62% for diesel, and 4% for kerosene,” Ewura said in a statement.

The alliance of oil-producing nations known as OPEC, which is led by Saudi Arabia and Russia, has continued to cut its oil output, which also raises the price. It is anticipated that prices will rise further as a result of OPEC’s announcement that it will reduce production by 1 million barrels per day starting in November.

The increase in fuel prices is likely to have a knock-on effect on prices of other goods and services, as businesses pass on the increased cost of transportation to consumers, as has been experienced in other African countries like Angola, Nigeria, and Kenya.

While the rise in the global price of crude oil means more earnings for oil-producing states, it may also connote an inevitable price hike on the “poor population” of these states.

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Nigeria: Senate cautions executive over central bank loans, illegal spending



The Nigerian Senate has advised President Bola Tinubu to send a supplementary budget for the country’s Compressed Natural Gas initiative and cautioned him against engaging in illegal spending.

Through its Gas Committee, chaired by Senator Jarigbe Jarigbe, the Senate urged Tinubu to swiftly submit a 2023 Supplementary Budget to the National Assembly in order to launch the compressed natural gas project.

This request was made just 48 hours after President Bola Tinubu announced plans to ease Nigerians’ pain from the removal of fuel subsidies. The law, insisted the legislators, forbade extra-budgetary spending.

Nigerian President, Bola Tinubu, in a nationwide broadcast on the commemoration of the country’s independence on Sunday, announced an interim wage rise for low-income workers, and deployment of mass transit buses running on gas to ease the impact of petrol subsidy removal.

Tinubu, in his address, said the government “has opened a new chapter in public transportation through the deployment of cheaper, safer CNG buses across the nation. These buses will operate at a fraction of current fuel prices, positively affecting transport fares. New CNG conversion kits will start coming in very soon as all hands are on deck to fast track the usually lengthy procurement process.”

The Central Bank of Nigeria’s advances to the federal government rose 2900 per cent in the last seven years to N23.8 trillion under Tinubu’s predecessor, Muhammadu Buhari, an unprecedented rise that violated the law, triggered inflation and worsened the country’s debt burden; and the Senate is worried the latest “CNG move ” by the executive might degenerate into a similar position

Although the committee’s chairman praised Tinubu for the CNG initiative, he also cautioned that other projects in the gas value chain and the use of taxpayer money without National Assembly approval would be illegal. The senators cautioned against extra-budgetary spending through Ways and Means, saying that the legislature was ready to support and assist the populace.

Jarigbe said, “The noble initiative would ameliorate the hardship of the citizens. Also, the President needs to come up with a supplementary budget to enable the government to fund the gas value chain, including the provision for CNG infrastructure and CNG vehicles.

“The President should not embark on extra-budgetary expenditure because it would be inconsistent with the provisions of the law.”

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