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Zimbabwe aims to reconnect to global finance at debt summit

Published

2 weeks ago

November 27, 2024

To discuss ambitious plans to pay off debt arrears and restructure $12.7 billion in foreign debt, Zimbabwe’s president will hold a session of creditors and financial executives on Monday. The ultimate goal is to access global finance markets for the first time in almost twenty years.

It will be difficult for Zimbabwe, which has had various financial crises in recent decades, from recurrent episodes of hyperinflation to successive failed efforts to introduce new currency regimes, to pay down its debt load, representing 81% of its gross domestic product.

“The issue of arrears is a major albatross around our neck,” said Prosper Chitambara, a Harare-based independent economist.

It will be a long journey; at the moment, Zimbabwe cannot access even funds from the International Monetary Fund, which is the world’s lender of last resort. However, experts advise it’s crucial to pay off arrears.

“Once the arrears are cleared it will be cheaper to borrow and easier to attract investment,” Chitambara said.

Along with officials from the business sector, development organisations, and creditors, Zimbabwe’s president Emmerson Mnangagwa and Akinwumi Adesina, head of the African Development Bank (AfDB), will attend the one-day conference in Harare.

Funding for Zimbabwe, formerly a regional breadbasket that now struggles to feed its people, can only be unlocked by getting on track with bilateral creditors and settling arrears with the AfDB, World Bank, and European Investment Bank.

“The IMF is currently precluded from providing financial support to Zimbabwe” due to an unsustainable debt situation and external arrears, an IMF spokesperson said.

Zimbabwe’s initial goal is to become an IMF Staff-Monitored Program (SMP), which does not require executive board approval or financial assistance.

An SMP would help Zimbabwe re-establish sound economic policy, according to government officials. But the government has already missed two deadlines: last month and April when it was supposed to have an SMP in place.

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Egypt’s November inflation drops to 25.5%, near 2-year low

Published

1 day ago

December 11, 2024

Ifeoluwa Dada

According to figures released Tuesday by statistics agency CAPMAS, Egypt’s annual urban consumer price inflation rate fell more than anticipated to 25.5% in November, the lowest level since December 2022.

Following the Russian invasion of Ukraine, which caused international investors to pull billions of dollars out of Egyptian treasury markets, inflation started to rise sharply in early 2022.

In September 2023, headline inflation reached a record high of 38.0%. It dropped to 26.5% by October 2024.

In a Reuters survey last month, 15 economists’ consensus prediction was for annual inflation to gradually decline to 26.4%.

According to CAPMAS statistics, headline inflation decreased from 1.1% in October to 0.5% in November every month.

Compared to October, when they fell 1.1%, food costs fell 2.8% over the month, making them 23.3% more than they were a year ago.

An increase in the money supply has been a major contributor to inflation. According to central bank data, Egypt’s M2 money supply increased by 29.54% in October compared to the same month last year.

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Nigeria creates N20bn consumer credit fund for domestic automakers

Published

3 days ago

December 9, 2024

Ifeoluwa Dada

In an attempt to increase demand for cars built domestically, the Nigerian government has established a N20 billion consumer credit facility programme.

The goal of the programme, which is run by the Nigerian Consumer Credit Corporation (Credicorp), is to keep customer interest rates to single digit.

The fund aims to remove obstacles that consumers face when purchasing cars on credit, according to Credicorp Managing Director/CEO Engr. Uzoma Nwagba, who spoke at the official launch/agreement signing between Credicorp and the National Automotive Design and Development Council (NADDC) in Abuja.

Nwagba said that the credit economy contributed to the creation of jobs and wealth for Nigerians as well as to the enhancement of residents’ quality of life.

According to him, the government is dedicated to helping the industry in order to guarantee its expansion and survival. According to him, the N20 billion fund was only the start, and if the initial support proves effective, the government intends to create a larger fund.

Earlier, Mr. Joseph Osanipin, the Director General of NADDC, stated that the industry’s expansion depends on the demand side of the car market being improved.

According to Osanipin, credit programs enable consumers to acquire brand-new cars of their choosing, but in the majority of prosperous nations, people do not pay cash for cars and other autos.

According to him, the program, which covers all types of autos such cars, vans, tricycles, and motorbikes, is available to all Nigerians and involves automakers that produce or assemble their goods entirely domestically.