VenturesNow

IMF eases East Africa’s indebted states’ burden with $1.9b deals

Published

12 months ago

December 24, 2023

The budgetary support of $620.65 million for East African nations, Rwanda, Tanzania, and the Democratic Republic of the Congo (DRC) has been approved by the board of the International Monetary Fund (IMF).

The fund is regarded as a component of the $1.92 billion in funding pledges that the Washington-based organisation reached with six countries in East Africa during the previous six months.

The agreements are a relief for the six countries (Somalia, Burundi, Kenya, and Uganda are the others) which are heavily indebted and facing worsening debt due to falling revenue collections, diminishing foreign exchange reserves, and weakening currencies.

The IMF funding is contingent upon the recipient countries enacting significant socioeconomic and governance reforms, and is intended to support the countries in managing their ongoing budget deficits and stabilising their faltering foreign exchange reserve positions.

The fund’s board has authorised the distribution of $150.5 million, $268.05 million, and $202.1 million to Tanzania, Rwanda, and the Democratic Republic of the Congo, respectively, during the last two weeks.

The funding for Tanzania is a component of the $1.04 billion Extended Credit Facility (ECF), which was authorised in July 2022 by the IMF board. After the program’s second review was finished, Dodoma’s funding was approved, increasing Tanzania’s overall access under the agreement to $455.3 million.

It stated that although macroeconomic imbalances had gotten worse, Rwanda’s economic growth had remained strong. It also added that reduced policy buffers, recurrent droughts, and the devastating floods in May 2023 had limited the country’s ability to pursue developmental goals.

Kenya and the IMF staff agreed in November for an increased $938 million in funding. Kenya would receive immediate access to about $682 million from the fund as a result of the funding, which still needs to be approved by the IMF board in January.

Generally, most countries on the continent have struggled with foreign and domestic debt since the endemic effect of the COVID-19 pandemic on their economies, but not many have made significant progress in the push for debt restructuring under the G20 framework.

VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

19 hours 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.

VenturesNow

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

Published

2 days 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.”