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IMF, Ghana agree first review of $3 billion loan programme

Published

1 year ago

October 7, 2023

A staff-level agreement over the initial review of a $3 billion loan programme has been reached between the Ghanaian government and the International Monetary Fund (IMF).

The agreement paves the way for a disbursement of $600 million once it is approved by the IMF’s executive board. The multilateral body says Ghana and its official creditors now quickly need to agree on a debt restructuring plan to get board approval and receive the money.

According to a government presentation to investors, at the end of 2022, its debts to nations like China and members of the Paris Club of creditor nations totalled $5.4 billion of the $20 billion foreign debt that needed to be adjusted. Around $30 billion worth of external debt was present overall.

As it struggled with its greatest economic crisis in a generation brought on by spiralling public debt, the West African nation requested the IMF’s financial assistance last year.

The three-year extended credit facility is subject to the restructuring of internal and external debt, as well as spending reductions and other fiscal adjustments. May saw the disbursement of the loan’s initial $600 million tranche to Ghana.

Despite being a major producer of oil, gold, and cocoa, Ghana has been experiencing the worst economic crisis in a generation, with double-digit inflation and skyrocketing public debt. Ghana was also among the first set of African nations to default on its foreign debt.

While noting on Friday that their growth had been more resilient than original estimates, with lowering inflation, a more stable currency rate, and better fiscal and external positions, the IMF praised Ghana’s road to economic recovery.

According to the report, Ghana is on target to cut its primary fiscal deficit by around 4 percentage points of GDP in 2023, as committed, and spending has stayed within programmed bounds. Meanwhile, recent anti-government protests in Accra, Ghana’s capital city, have been triggered by worries over the nation’s economic woes.

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IMF mission concludes 4th loan program assessment in Egypt

Published

3 hours 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

2 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.