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World Bank, IMF, others, agree Chad doesn’t need debt relief. Here’s why

Published

2 years ago

October 13, 2022

Central Africa country, Chad, might not be needing debt relief at the moment due to the recent surge in oil prices.

Chad’s creditors together with staff from the International Monetary Fund and the World Bank said on Thursday are committed to reconvene if a financing gap was identified.

According to a statement by the Paris Club, official creditors are finalizing a memorandum of understanding on a deal, which marks the outcome under a debt treatment framework agreed by the Group of 20 major economies and the Paris Club in late 2020.

No debt relief from official bilateral creditors was currently needed given the surge in oil prices since the approval of an IMF lending program on Dec. 10, the committee said. However, it agreed to reconvene if needed.

“The creditor committee committed to reconvene and address the need for a debt treatment if a financing gap is identified,” it said,

It also added that Chadian authorities would be expected to seek comparable debt treatments from all private and other official bilateral creditors should one be needed.

It also urged Glencore, Chad’s largest private external creditor, “to reaffirm its commitment to provide a debt treatment during the IMF program should a financing gap be identified” and to address the remaining debt vulnerabilities that result from its acceleration repayment mechanism.

A senior official of the International Monetary Fund, IMF, Kristalina Georgieva, on Monday had called for swift completion of debt restructuring arrangements for Chad and another African country going through financial troubles Zambia.

Chad’s bilateral creditors – China, France, India and Saudi Arabia – would act to offer Chad debt relief if needed, a source familiar with the matter told newsmen.

The agreement also includes Switzerland-based mining and commodity firm Glencore, a major creditor, which was seen as a “huge step,” said the source.

Many African countries depend on international creditors to fund critical aspects of their economies.

Related Topics:#CHAD debt relief Featured

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

Published

4 days 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

4 days 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.