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IMF, Kenya seal staff-level agreement, recommends fiscal consolidation

Published

7 months ago

June 12, 2024

The International Monetary Fund (IMF) and Kenya struck a staff-level agreement on Tuesday, according to the multilateral body, opening the door to the payment of roughly $976 million.

The fund stated that it would have instant access to $120 million provided its Executive Board approved a second review of Kenya’s Resilience and Sustainability Facility.

Additionally, the lender recommended the East African country to modify its 2024–2025 budget to incorporate more measures aimed at increasing income, given that a decline in the primary fiscal balance during the preceding fiscal year and a shortfall in tax collections were anticipated to maintain high domestic borrowing needs.

Kenya has struggled with cash since 2022, but in February it was able to partially repurchase another Eurobond that is expiring in June by selling a new $1.5 billion Eurobond from international markets, albeit at a hefty price.

The shilling strengthened versus the dollar as a result of the issuance, which also allayed investor fears about a possible default and restored trust in the economy among foreign investors. The fund suggested that making changes to the budget for 2024–2025 could help.

“Authorities have taken decisive steps towards fiscal consolidation by introducing several measures in the context of the draft 2024/25 Budget and the 2024 Finance Bill,” it added.

On Thursday, the finance minister will provide the parliament the budget for 2024–2025 (July–June). Parliament approved 4 trillion shillings ($31 billion) for the year’s total spending, which is more than the 3.75 trillion shillings the minister had given in June of last year for the 2023–2024 fiscal year. Later on, the budget was changed to 3.85 trillion shillings.

The Finance Bill 2024, a separate law including revenue-raising recommendations that some claim might bankrupt industries like financial services, transportation, manufacturing, and retail, will be introduced with the 2024–2025 budget.

The current $3.6 billion IMF agreement with Kenya was reached in April 2021. This evaluation is the seventh that the program has conducted.

Kenya will utilize a portion of a $1.2 billion World Bank budget support loan to pay around $500 million toward a maturing Eurobond this month, according to the central bank governor’s announcement last week.

VenturesNow

Moroccan annual inflation rises to 0.8% in November

Published

4 days 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.

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

Published

5 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.”