VenturesNow

Ghana confident over bondholder deal as IMF completes review

Published

9 months ago

April 15, 2024

Ghana’s finance minister said on Saturday that the country was sure it would “at some point” be able to reach a deal with foreign bondholders to restructure $13 billion in debt. This came at the same time that the International Monetary Fund (IMF) announced a successful review of its loan program.

With the help of the $3 billion IMF program, the West African country has been paying off its debt as it tries to get out of its worst economic problem in a generation.

The Fund and Ghana agreed in January to change the terms of $5.4 billion in loans with government creditors. The new agreement at the staff level for the second review of the program would let a $360 million tranche be released once Ghana gave guarantees for the deal’s funding.

The head of the IMF’s mission to Ghana, Stephane Roudet, said that the IMF needs to keep seeing progress in Accra’s separate talks with foreign bondholders, which are still going on.

Speaking at a joint news conference with Roudet, Finance Minister Mohammed Amin Adam expressed optimism but gave no timeline.
“Negotiations are ongoing. We’ve been more aggressive over the last two months… We are very confident that if things go the way they are, we certainly will reach a deal at some point,” he said.

The cocoa, gold, and oil-producing country asked the IMF for help in 2022 when rising inflation and debt costs caused it to fail on most of its $30 billion in foreign debt. “Ghana’s performance under the program had been generally strong,” said Roudet of the Fund.

“The authorities’ strong policy and reform efforts to restore macroeconomic stability and debt sustainability … are already generating positive results,” he said.
“In other words, the programme is working.”

This number has gone down from 54% in 2022 to 25.8% in March. Governor Ernest Addison told the news conference that the central bank thinks it will be around 15% by the end of 2024, even though deflation has been slowing down lately.

VenturesNow

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

Published

3 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

3 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.