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IMF says Malawi needs almost $1 billion debt relief by 2027

Published

1 year ago

November 23, 2023

Multilateral body, the International Monetary Fund (IMF) has said that Malawi needs almost $1 billion in debt relief from its creditors by 2027.

The announcement comes as the country battles severe medicine, fuel, and fertiliser shortages due to chronic foreign currency shortages. According to an IMF report, the landlocked nation requires $887 million in debt relief from its commercial creditors between 2023 and 2027 and $99 million from its bilateral creditors.

Malawi has a $1.6 billion financing gap between 2023 and 2027—that is, the difference between export revenues and the cost of imports and servicing external debt. The majority of that gap is expected to be covered by debt restructuring, with the remaining portion coming from grants, concessional loans, and the IMF loan.

Last week, the IMF Executive Board gave Malawi a $178 million, four-year loan. One of the main conditions for the IMF board to approve the loan was to obtain a commitment from bilateral creditors, China and India to restructure their share of the country’s external debt, which stood at $4 billion at the end of 2022.

$222 million of Malawi’s debt is owed to the Chinese Export-Import Bank, and $114 to Exim India. As at the end of 2022, Malawi owed $495 million to the African Export-Import Bank (Afreximbank) and $395 million to the Trade & Development Bank, its two principal commercial creditors.

Malawi is currently experiencing severe shortages of vital imports like fuel, medicines, and fertilisers due to forex shortages. 58.8% of the country’s population currently lives in extreme poverty.

Malawian President, Lazarus Chakwera announced a reduction in governance costs, overall prudence in public expenditure, and the suspension of foreign trips for himself and cabinet members. He has also reduced the fuel allowances of senior government officials by 50% due to inflation. He plans to increase the salaries of civil servants to ease the cost of living.

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Moroccan annual inflation rises to 0.8% in November

Published

1 hour ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

1 day ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”