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South Africa’s finance minister insists economic recession not likely in 2023

Published

2 years ago

April 15, 2023

South Africa’s finance minister, Enoch Godongwana has dismissed fears that the country is at risk of falling into recession amidst its current economic crisis. The country has been experiencing damaging power outages.

Godongwana’s position is against the projection of the International Monetary Fund (IMF), and the country’s economic contraction in the last three months of 2022.

The minister made the remarks while speaking on the sidelines of the IMF and World Bank spring meetings in Washington.

“I rule out that possibility this year. We’re not going to record successive negative quarters. I don’t think that’s going to be possible,” he said.

Despite calls by the electricity minister for more investment in the power sector, the government remains unlikely to give future bailouts to Eskom which is the country’s primary electricity supplier, and generates approximately 90% of the electricity used in South Africa and approximately 30% of the electricity generated on the African continent, but has been struggling over poor financing.

Public debt in South Africa has more than tripled since 2010. The war in Ukraine halted the fiscal consolidation process of many countries in the region that started in the aftermath of the COVID-19 pandemic.

The World Bank projects that economic activity in South Africa would weaken in 2023 (0.5%) as the energy crisis deepens.

Related Topics:Enoch Godongwana Featured South Africa

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 day ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.