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Kenya, IMF reach staff-level deal for extra $938 million 

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The International Monetary Fund (IMF) has confirmed that it has reached a staff-level agreement with Kenya, unlocking immediate access to a $682.3 million credit tranche.

The agreement will also boost the current lending programme by $938 million as Kenya grapples with acute liquidity challenges caused by uncertainty over its ability to access funding from financial markets before a $2 billion Eurobond matures next June.

IMF’s head of the mission, Haimanot Teferra stated that “The tightening global financing conditions for frontier economies and global geopolitical tensions are compounding the challenges.”

Kenya will have access to a total of $3.88 billion, subject to the executive board of the Washington-based fund’s approval. This would increase Kenya’s total funding under the current Extended Fund Facility and Extended Credit Facility arrangements to $4.43 billion, according to the IMF.

Kenya would be able to pay off maturing foreign debt without depleting its hard currency reserves thanks to the new IMF financing, as well as anticipated funding from the World Bank and regional banks like Afrexim, the market participant stated.

The current programme, which was agreed upon in April 2021, was initially increased by an additional $1 billion in May.This increase included a new arrangement under the same RSF and $544 million under the IMF’s Resilience and Sustainability Facility (RSF).

Among the debt the government must pay in foreign currencies is a $2 billion Eurobond that is due in June of next year. Investors are a little concerned about the bond’s maturity because the refinancing option was out of reach due to an increase in yields.

To reassure markets that it was serious about containing the skyrocketing debt, President William Ruto’s administration drastically reduced the budget deficit in June, when it was first presented to parliament.

Kenya is one of the nations in Africa struggling with debt. The nation is currently having financial difficulties as a result of having to devote almost half of its income to paying off impending debt. The situation has been made worse by the sharp devaluation of the Kenyan shilling.

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Ghanaian cocoa farmers stockpile beans ahead of price rise

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According to industry sources cited by Reuters, cocoa farmers in Ghana, the world’s second-largest producer, are stockpiling beans in anticipation of higher prices.

This could put pressure on supplies to a global cocoa market that is trying to rebound from the devastating harvests of the previous season.

A dozen farmers, purchasers, and representatives from the state regulator Cocobod confirmed the practice, though it was unclear how widespread the up-country bean stocking was. Some blamed the practice for the slowdown in bean purchases.

“I have more than 300 bags, but I won’t sell,” said a cocoa farmer in south-central Ghana, who asked not to be named. “I will only sell after Christmas. We want to see if they will increase the price as they said.”

All of the reports claimed that farmers were responding to remarks made by Vice President Mahamudu Bawumia, who four weeks prior had promised to increase farmer prices to members of the ruling New Patriotic Party.

Speaking at Sefwi Wiaso, one of the largest cocoa-growing communities in southwest Ghana, Bawumia is vying for the presidency in the elections scheduled for December 7. Since then, he has claimed that his remarks were misinterpreted.

According to Cocobod officials, Ghana lost over one-third of its 2023–2024 cocoa production to smuggling, compounding the problems that caused production to drop to a level not seen in over two decades and contributed to record-high cocoa prices worldwide.

After a volatile session on Monday, US stocks ended the day marginally lower as investors braced for a pivotal week that would see the Federal Reserve make its policy announcement and Americans elect a new president.

Ghana increased the fixed farmgate price by over 45% to 48,000 cedis, or little less than $3,000, per metric tonne for the 2024–25 season, which began in September, in an effort to increase farmer incomes and discourage smuggling.

But Ivory Coast, Ghana’s neighbour and the largest cocoa producer in the world, increased the price to 1,800 CFA francs ($3.00) per kilogramme, which is only marginally more than Ghana’s.

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Zambian govt spends K16.6 billion in October on debt servicing, gulping K4.7 billion

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Zambian Ministry of Finance and National Planning released K16.6 billion in October to assist Zambian development and public service delivery, according to the ministry’s budget release issued by the Treasury.

The government allotted K4.5 billion to pay public service personnel salaries and allowances. Health and teaching staff and Zambian ambassadors abroad received allowances.

The government set aside K4.7 billion for debt service and arrears to reduce national debt. K2.2 billion went to domestic debt service, K256.9 million to overseas debt, and K2.1 billion to legacy fuel arrears.

The ministry’s budget, which stated, “Notable expenditures included K3.5 billion for transfers, subsidies and social benefits, K4.2 billion for various development programs, general operations and capital expenditure, and K700 million for drugs and medical supplies.”

Situmbeko Musokotwane, Minister of Finance and National Planning, took advantage of the statement to urge foreign investors to think about Zambia as a potential place to invest.

Musokotwane emphasised Zambia’s favourable investment climate while speaking at a recent World Bank meeting in Washington. He also urged collaborations in the fields of manufacturing, mining exploration, renewable energy, and agriculture.

“Zambia is endowed with critical natural resources, and we invite you to collaborate with local business players in mobilizing the resources required for green energy projects, mining explorations and development, and agriculture value chain ventures that support out-grower schemes through farm blocks,” Musokotwane stated.

He called for investors to collaborate with Zambian companies, highlighting the advantages of doing so in important economic sectors like mining, agriculture, and energy.

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