Musings From Abroad

UN concerned over armed mobilization in Libya

Published

4 months ago

August 24, 2024

The UN mission in Libya has expressed worry over reports of military mobilisation in Tripoli and threats of using force to settle a dispute over central bank management.

The deputy director of the mission, Stephanie Koury, reported to the UN Security Council on Monday that during the preceding two months, there had been a swift deterioration of the political and military conditions in Libya, including multiple mobilisations by armed groups.

“The display of military power and armed confrontations in densely populated neighbourhoods is unacceptable and threatens the lives and security of civilians.” According to the mission’s statement on Thursday. Rival armed factions mobilised on both sides in an attempt to remove Central Bank of Libya (CBL) head Sadiq al-Kabir, sparking the most recent round of hostilities.

Mohammed al-Shokri, the candidate put forth to succeed Kabir as governor, stated in a statement on Friday that he would only take the position if support from the nation’s two opposing parliamentary bodies was received.

Since an insurrection supported by NATO in 2011, Libya, a significant oil producer in the Mediterranean, has seen minimal stability. In 2014, the nation broke into fighting factions on the east and west, with support from Russia and Turkey in the end.

An end to hostilities was declared in 2020. Major factions remain in place, occasionally engaging in armed conflicts, and vying for control of Libya’s vast economic resources despite the failure of efforts to resolve the political situation.

The political leadership of the nation is chosen from groups that were either established during recurring international peacekeeping missions to supervise several unsuccessful transitions or elected ten years or more ago.

The diplomatic effort to replace all of Libya’s governmental structures through national elections has stalled.

The Libyan National Army (LNA) of commander Khalifa Haftar controls eastern Libya, the region where the parliament is located. Rival armed factions have clashed periodically in Tripoli and the northwest, which is home to the internationally recognised Government of National Unity (GNU) and the majority of significant governmental institutions.

As the LNA moved a force into southwest Libya, raising worries of east-west warfare, opposing factions in northwest Libya mobilised against one another in late July and early August.

In the meantime, there have been fresh demands from the House of Representatives parliament in the east to overthrow the GNU and Presidency Council.

One of the internationally recognised legislative organisations, the High State Council, is likewise at a standstill following a contentious vote over its leadership.

After Mohammed al-Menfi, the leader of the Presidency Council, decided to replace Kabir and the board—a decision that the parliament rejected—tensions over control of the central bank escalated.

Musings From Abroad

World Bank doubts Ethiopia-IMF debt assessment

Published

1 day ago

December 24, 2024

Ifeoluwa Dada

Some officials of the World Bank have questioned if the study supporting Ethiopia’s debt restructuring may be “faulty” after criticising an evaluation of the country’s finances done with the International Monetary Fund (IMF).

World Bank consultant, Brian Pinto, and its head economist, Indermit Gill, evaluated the July Debt Sustainability Analysis (DSA), which was created by the IMF and employees of the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries, in an internal document seen by Reuters.

According to the authors, Ethiopia is experiencing a short-term cash shortage rather than a long-term solvency problem, which is a source of conflict between the government and holders of its $1 billion international bond that is in default, based on the DSA.

“We found that the bondholders have interpreted the DSA correctly, but the DSA itself may be faulty,” Pinto and Gill wrote in the paper from earlier this month. “The disagreements about Ethiopia’s debt sustainability will be repeated as other countries become debt distressed.”

A World Bank representative responded to a question regarding the paper by saying, “We generally don’t comment on internal deliberations between the World Bank and the IMF or any of our partner institutions.”

As part of the most recent review of the Fund’s loan program, Ethiopian State Finance Minister Eyob Tekalign told Reuters that the DSA had just been reviewed by IMF and World Bank teams and that the status had not changed significantly.

Without providing further details, an IMF representative acknowledged that its officials travelled to Ethiopia in November for the second review of the Fund’s loan program and added that every review incorporates an update to the DSA. Regarding the memo, the spokeswoman remained silent.

A request for comment from Pinto and Gill was not answered. There has been a tense confrontation between Ethiopian officials and bondholders.

The main point of contention is whether, as bondholders contend, Ethiopia is experiencing a liquidity shortage that may be resolved by rescheduling debt or if it is experiencing longer-term financial issues that necessitate haircuts, or debt write-downs.

According to the DSA, certain statistics on exports indicated pressures on both liquidity and solvency.

It was reported in October that the DSA indicated a solvency problem and that writedowns were inevitable. Investors have criticised a government proposal that suggests an 18% haircut in addition to rejecting the evaluation.

Musings From Abroad

Swiss company Mercuria partners Zambia’s IDC in new metals trading firm

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

According to a statement released by Swiss commodities trader, Mercuria, on Thursday, it has established a metals trading arm with Zambia, the second-largest producer of copper in Africa.

The trading unit is jointly owned by Mercuria and an arm of Zambia’s Industrial Development Company (IDC), and its purpose is to allow Zambia to engage directly in the minerals trading market.

The joint venture “envisages the establishment of a vehicle to market and trade Zambian copper by mutual leverage,” according to a statement from Cornwell Muleya, the CEO of IDC.

The southern African nation wants to increase copper output to roughly 3 million metric tonnes within the next ten years, and in 2023, it produced roughly 698,000 tonnes of copper, down from 763,000 metric tonnes the year before.

In June, the Zambian government announced that it would establish a minerals trading unit.

Investors including First Quantum Minerals and Barrick Gold are ramping up production, with output set to receive a further boost once Vedanta Resources’ Konkola Copper Mines restart activity.

“Our joint venture with IDC marks a significant milestone for Zambia as it positions itself more strategically in the global minerals market,” Kostas Bintas, Mercuria’s global head of metals and minerals, said in the statement.