VenturesNow

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

Published

5 months 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.

VenturesNow

World Bank grants Malawi $57.6 million for food crisis

Published

7 hours ago

April 27, 2024

Ifeoluwa Dada

As a response to its food crisis, the World Bank said on Friday that it would give Malawi $57.6 million in “quick release” grants.

“This support comes in the context of the severe food crisis the country is suffering due to El Niño conditions in the wider southern Africa region,” the World Bank said in a statement.

“A series of intense disaster events over the last few years has left almost no time for the country to recover and has resulted in a severe erosion of food security at the national level.”

Malawi is one of the least developed countries in the world. It is ranked 170 out of 187 countries in the 2010 Human Development Index. Almost 16 million people live there, and 90% of them make less than $2 a day. That’s 53% of the total population.

The United Nations Children’s Fund (UNICEF) says that 46,000 children in Malawi are seriously malnourished. In 2023, UNICEF said that more than 500,000 Malawian children were at risk of not getting enough food.

Now, Malawi has a lot of programs in place to deal with things like poverty, and climate change, and to make the business and agriculture more diverse.

VenturesNow

Nigerian oil regulator implements regional fuel standards

Published

2 days ago

April 26, 2024

Ifeoluwa Dada

Nigeria’s oil authority has clarified that the recent changes to diesel fuel sulphur content standards are part of a regional effort to make things more uniform and are not meant to loosen rules for local refineries.

A report from S&P Global last week said that the West African fuel market had changed a lot after Nigeria raised the maximum diesel sulphur content from 200 parts per million (ppm) to around 650 ppm. This caused worries that the country might be lowering its standards to allow diesel made in Nigeria that is higher than the 200 ppm limit.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on the other hand, said it was only following a 2020 decision by the Economic Community of West African States (ECOWAS) that all of the regions had to slowly switch to better fuels.

Fuels that have a lot of sulfur can hurt engines and make the air dirty. As of right now, the ECOWAS rule lets locally-made fuel have more sulfur until January 2025. After that, a standard of less than 5 parts per million will be used for all oil, whether it is refined in West Africa or brought in from another country.

Farouk Ahmed, the head of the NMDPRA, told Reuters that the new limits are in line with ECOWAS’s choice to require stricter fuel specifications. The new rules will go into effect in January 2021 for non-ECOWAS imports and January 2025 for ECOWAS refineries.

“We are merely implementing the ECOWAS decision adopted in 2020,” Ahmed said.

“So a local refinery with a 650 ppm sulphur in its product is permissible and safe under the ECOWAS rule until January next year where a uniform standard would apply to both the locally refined and imported products outside West Africa”, Ahmed said.

Ahmed said that importers were told that the amount of sulphur allowed was going down, from 300 parts per million in February to 200 parts per million this month. This was done long before the huge Dangote refinery started providing diesel.

Diesel with a sulphur level of between 1,500 ppm and 3,000 ppm could be brought in by importers before.

The switch to cleaner fuels is in line with efforts to protect the environment around the world and makes sure that all area refiners have the same chances.

Nigeria recently had its worst blackout in decades because of a problem with its energy supply. The high cost of alternative energy sources has been a huge problem for both businesses and individuals, with the price of diesel being the most affordable choice for businesses.