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Zambia pushing hard for $15 billion debt restructuring – Finance minister, Situmbeko Musokotwane

Published

2 years ago

November 30, 2022

Zambia’s finance minister, Situmbeko Musokotwane has revealed that the Southern African country is pushing hard to complete the restructuring of nearly $15 billion of external debt in the first quarter of 2023.

The minister said the country is “in active engagement” with its largest bilateral creditor China.

Zambia opted to bow out of a $42.5 million Eurobond repayment in 2020 and is seeking $8.4 billion of debt relief from 2022 to 2025. The country has been on a quest to restructure its loans and rebuild an economy ravaged by mismanagement under previous administrations and COVID-19.

The minister said that China had sought clarification from the Zambian government and the IMF on their debt agreement.

“The Chinese… are asking (for) a number of clarifications, which we and the IMF are providing them,” Musokotwane said.

Musokotwane further revealed that the Export-Import Bank of China is representing all Chinese creditors in their restructuring negotiations with Zambia

The creditors include commercial banks, the Industrial & Commercial Bank of China Jiangxi Bank, and China Minsheng Bank.

He hinted at the country having potential new investors in Konkola Copper Mines (KCM) and Mopani Copper Mines (MCM).

“We are hoping that by the first quarter of next year we should be there with some of them. And also some of the new investments that are coming from the U.S. and other places,” he said.

Mining is a critical part of Zambia’s economy. In 2021, a whopping 79.5% of the country’s exports came from mining, with the sector remaining Zambia’s major productive industry. A total of 11.1% of Zambia’s Gross Domestic Product (GDP) came from mining, and 2% of the country’s national employment.

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

Published

4 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

4 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.