VenturesNow

Zimbabwe awaits IMF programme in Q3 after currency changes

Published

8 months ago

April 21, 2024

Zimbabwe’s Finance Minister, Mthuli Ncube, has revealed that a staff-monitored programme with the IMF would not start until the third quarter of 2024.

The minister noted that the delay is due to the country’s launch of a new currency called Zimbabwe Gold (ZiG). An IMF program would help the southern African country get back in touch with the world’s financial community by showing that it has a history of good economic policies.

Zimbabwe said last year that it hoped to have a plan in place by April 2024, but that date was pushed back because of the ZiG this month.

“We have moved the (staff-monitored programme) to the third quarter due to the new currency. We should not rush these things,” Ncube said on the sidelines of the World Bank and IMF spring meetings in Washington.

In a bid aimed to make gold-backed ZiG stable and stop the vicious circle of high inflation. The ZiG needed more time to be fully operational before talks with the IMF could move forward, according to Ncube.

Zimbabwe’s third new currency in ten years has already had trouble being accepted by suppliers and users in the black market. Black market sellers are offering 20 ZiG for every dollar, but the value of one ziG is 13.31 dollars.

“Whoever is trading on the alternative market is doing money laundering,” said Finance Secretary George Guvamatanga at the media briefing, saying the government would crack down on this.

Ncube also revealed that the country was making progress in talks about paying off its debts. Zimbabwe hasn’t been able to access foreign financial markets in over 20 years, but they recently agreed to pay off their $6 billion in debt.

“As part of the traditional methods of clearing arrears, Zimbabwe would need a sponsor… and we need about $2 billion,” said Ncube.

He also said that Zimbabwe would be focused on the arrears owed to the World Bank and the African Development Bank while they looked for more sponsors.

VenturesNow

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

Published

4 hours 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 hours 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.