VenturesNow

Zambian govt clarifies IMF’s stance amid controversy over debt restructuring talks

Published

6 months ago

November 16, 2023

The International Monetary Fund (IMF) has not changed its stance on Zambia’s debt restructuring agreement, according to Zambia’s Ministry of Finance and National Planning.

The Memorandum of Understanding (MoU) signed in Marrakech in October 2023 and the agreement reached with the Official Creditor Committee (OCC) in June 2023 remain on track, according to the Office of the Secretary to the Treasury.

The Ministry, in its clarification on Wednesday, did admit, though, that there had been misunderstandings regarding the IMF’s position. It emphasised that the rumours were unfounded, and reaffirmed its commitment to the earlier agreements.

Zambia’s major creditor, China, earlier this week called on the country’s other creditors to shoulder a “fair burden” amidst Zambia’s recent push for debt restructuring. The call comes after the IMF and official creditors “expressed reservations” over a deal Zambia struck with overseas bondholders.

The ministry stressed that during the debt restructuring process, it would always act in the nation’s and its economy’s best interests. The government reassured Zambians and visitors that they were assiduously striving towards a resolution that was agreeable to all parties, despite the difficulties and concerns expressed.

Additionally, it emphasised how crucial it was to keep things confidential during these talks. Non-Disclosure Agreements (NDAs), which follow customary international legal practises for such engagements, govern discussions with the Bondholders Committee, it says. This means that until the talks are over, specifics about the conversations cannot be shared.

The ministry held talks with representatives of the IMF and the Official Creditor Committee last week in which the creditors voiced concerns about Zambia’s agreement-in-principle that was made with the Bondholders Steering Committee last month.

Zambia has re-engaged with the Ad Hoc Creditor Committee of Bondholders in response to these reservations, and talks are actively proceeding.

Being the first African country to default on its debt during the coronavirus pandemic, Zambia has struggled, especially around the country’s debt burden and complications with negotiating a way out with creditors like China, its biggest foreign creditor.

Related Topics:debt burden Featured Zambia Zambia's Ministry of Finance

Click to comment

VenturesNow

Nigeria’s inflation hits 28-year high of 33.69% in April

Published

2 hours ago

May 16, 2024

Ifeoluwa Dada

Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

VenturesNow

Uganda discusses power line to South Sudan with China’s Sinohydro

Published

23 hours ago

May 15, 2024

Ifeoluwa Dada

According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.