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IMF wants Zambia to fast track debt restructuring deal. Here’s why



The International Monetary Fund (IMF) has urged Zambia to strike a debt restructuring deal with its international creditors as soon as possible.

IMF’s Zambia mission chief Allison Holland said after concluding a week-long trip to the country during the week that the IMF says it will make a formal assessment of its predicament in the spring of next year.

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.

“We discussed progress on debt restructuring talks, noting the ongoing discussions with creditors on resolving technical issues,”

“Achieving timely restructuring agreements with external creditors is essential to secure the expected benefits of the Fund-supported program,” she said.

One of Zambia’s creditors, China is seeking “clarifications” on IMF assumptions on which the debt restructuring is based. Holland also pointed to, “the authorities’ promising progress in meeting key commitments under the (current) Fund-supported programme.”


Highest in East Africa, Uganda’s trade surplus with Congo DR hits $53 million



According to the Ministry of Finance’s Performance of the Economy report, Uganda had the largest trade surplus with the Democratic Republic of the Congo (DRC) in January, totalling $53.07 million (Ush208.9 billion).

The report, which summarises the monthly performance of several economic sectors, found that the Democratic Republic of the Congo (DR Congo) was the recipient of more exports from Uganda than any other member state of the East Africa Community (EAC), followed by South Sudan ($41.68 million, or Sh164 billion), Rwanda ($23.1, or Sh90.9 billion), and Burundi ($5.25 million, or Sh20.6 billion).

Uganda did, however, report deficits of $88.41 million (Ush348 billion) with Tanzania and $12.39 million (Ush48.7 billion) with Kenya. Meanwhile, exports to its EAC partner states increased to $231.47 million during the performance period, while its imports remained at $209.17 million.

With 37.6% of the total market share, the EAC continued to be Uganda’s top export destination, followed by the EU and the Middle East. Uganda, however, trades at a $267.64 million deficit with Asia, $118.15 million with the rest of Africa, and $6.64 million with Europe.

According to the Ministry of Finance report, Uganda’s total export revenue in December was $616.36 million, up 0.2% from $615 million in November of the previous year. This increase was mostly attributable to higher export revenues from cotton, tobacco, and simsim.

A 6.7% decrease in coffee exports from $470.68 million was recorded as a result of heavy rains delaying harvests and drying out freshly harvested coffee.

Between November 2023 and December 2023, the value of imports fell by 3.1% to $886.24 million, mostly as a result of decreased imports from the private sector, which included, among other things, wood and wood products, electricity, petroleum products, and animals.

With China and India being the main contributors, accounting for 61.9% of the region’s imports, Asia continued to be Uganda’s largest source of imports, accounting for 41.2% of the country’s total imports.

Other noteworthy regions with respective shares of 23.6%, 15.1%, and 10.2% were the Middle East, the East African Community, and the rest of Africa.

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Nigeria’s Central Bank clears another $400 million FX backlog



The Central Bank of Nigeria (CNB) paid out an additional $400 million in legitimate foreign exchange backlog to individuals who were properly identified, according to CBN Governor Yemi Cardoso.

This was said by Cardoso at the communiqué’s presentation on Tuesday in Abuja during the Monetary Policy Committee meeting. In the meantime, the bank raised interest rates by 400 basis points, from 18.75% to 22.75%.

Cardoso states that the bank is dedicated to clearing the FX backlog for businesses that are owed money and will endeavour to regain the public’s trust.

Nigeria has matured foreign exchange forwards worth over $7 billion, which, despite the CBN’s assurances that the backlog will be cleared remains for worry for investors as the naira continues to decline owing to currency shortages. Approximately $2.5 billion of the backlog in sectors such as manufacturing, aviation, and petroleum has been fully paid.

He said, “In terms of the backlog, we are committed to clearing the backlog of identified and genuine requests that are pending.

“We are committed to doing that and I can tell you that just today, we paid out $0.4 billion to those that were identified, and we are committed to continuing doing so in one form or the other to those genuinely identified and proven cases.”

Under Cardoso’s direction, the CBN has implemented a number of measures meant to boost the bank’s reputation, stabilise the naira, and rein in inflation.

Among these measures are floating the naira, creating clear regulations for BDC, unifying the foreign exchange market, and ending intervention finance, which the governor claimed swallowed up about N10 trillion during the previous administration.

The goal of the CBN reforms was to settle the foreign exchange market, but since the start of 2024, there has been a great deal of volatility, with the naira at one point worth almost N1800 to the US dollar.

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