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Ghana retains interest rate as efforts to reposition economy continue

Published

1 year ago

September 25, 2023

Ghana’s central bank has retained main interest rates at 30.00%, citing lower inflation, a stable exchange rate and relatively strong economic growth.

The Central Bank’s governor, Ernest Addison said recent data suggested growth was more robust than expected, projecting GDP would expand by some 3% this year, compared with an International Monetary Fund (IMF) forecast of 1.6%.

“The consensus view of the Monetary Policy Committee is that we should see stronger growth than projected under the (IMF) programme,” he told journalists, referring to a $3 billion support package from the Fund that is conditional on debt restructuring.

“The policy mix under the three-year IMF extended credit facility is beginning to yield results. Economic activity is rebounding strongly. The exchange rate is stabilising. Inflation is declining, and the level of foreign exchange reserves has improved,” Addison said.

“Sustained improvement in these indicators should result in the restoration of real incomes and purchasing power,” he said, adding that the central bank expected continued disinflation but was ready to step in should that not happen.

The minister further revealed that talks were on with external creditors but expected the IMF’s next tranche of financing and other inflows to help keep the situation stable.

Although Ghana is a top producer of oil, gold, and cocoa, the country has been struggling with the worst economic downturn in a generation, marked by double-digit inflation and soaring public debt— being among the first set of African countries to default on its foreign debt.

Concerns over the country’s economic hardship have sparked anti-government demonstrations in Accra.

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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.