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Zimbabwe awaits IMF programme in Q3 after currency changes

Published

7 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 mission concludes 4th loan program assessment in Egypt

Published

2 days ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

4 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.