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IMF, Ghana agree staff-level $3 billion loan-program review pact

Published

2 months ago

October 6, 2024

A $3 billion IMF loan programme for Ghana has been the subject of a third review by staff and officials of the International Monetary Fund (IMF).

Under the G20’s Common Framework programme, the West African producer of cocoa and gold is almost finished with debt restructuring. The company defaulted on the majority of its $30 billion international debt in 2022.

“Ghana has made remarkable progress on its public debt restructuring,” the fund said in a statement, adding that the performance of the programme was “generally satisfactory.”

According to the government, an overhaul of $13 billion worth of Eurobonds has been accepted by more than 90% of bondholders in Ghana. This approval comes after a June agreement with bilateral creditors.

“The authorities are committed to pursuing good-faith efforts to reach an agreement with other commercial external creditors,” the IMF said.

Ethiopia is the only nation on the continent that is still trying to reform its debt under the Common Framework, with Ghana’s debt rework nearly finished. In an email statement, the Official Creditors group, whose communications are managed by the Paris Club, commended the progress.

“We see that the common framework process has gained traction and can move quicker,” the statement said.

Ghana would have access to $360 million in funding when the IMF’s executive board approves the staff-level agreement, according to the institution.

In May of last year, the IMF board authorised Ghana’s current credit program, which runs out in 2026.

According to the government’s June statement, Ghana’s debt restructuring is anticipated to lower its debt stock by $4.7 billion and give cash flow assistance totalling $4.4 billion for the IMF program.

“Economic growth in the first half of 2024 was much higher than initially envisaged,” said the IMF.

According to official data, Ghana’s economy expanded at its quickest rate in five years in the second quarter. As a result, officials began reducing interest rates in response to indications that inflation was beginning to decline.

At a joint news conference with the government, Stephane Roudet, the IMF’s Mission Chief for Ghana, stated that the organisation expected to update its growth prediction for Ghana, but he did not provide an exact amount.

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IMF mission concludes 4th loan program assessment in Egypt

Published

24 hours 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

3 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.