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Zambia targets debt relief agreements by Q1 2024

Published

12 months ago

January 4, 2024

Zambia’s Secretary to the Treasury, Felix Nkulukusa, has revealed that the country hopes to agree on key conditions for restructuring $3 billion of its bonds no later than the first quarter of 2024.

Under the G20’s Common Framework process—which was instituted in 2020 as a reaction to the COVID-19 pandemic—debtor countries are expected to reach comparable restructuring agreements with official and commercial creditors.

“Before we go to the (bondholder) steering committee, we have to agree on what we mean by comparability of treatment,” Nkulukusa said.

“This shoulds be concluded not later than the first quarter of 2024,” he added.

Zambia suffered a significant blow in November when a preliminary restructuring agreement was turned down by its official creditors, which include China and members of the Paris Club of Creditor Nations. Its official creditors rejected its bond deal with foreign holders, while the International Monetary Fund (IMF) approved a staff-level agreement with Zambia on the second review of its Extended Credit Facility, unlocking another $184 million subject to IMF board approval.

The country defaulted on its debts three years ago during the COVID-19 pandemic, and its restructuring efforts have been beset by delays. It is one of five African countries on the default list.

Related Topics:debt relief Featured Zambia

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

4 days ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

4 days ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.