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Debt Crisis: Zambia to cancel over $2 billion projects financed with loan

Published

2 years ago

July 11, 2022

Zambia is been innovative at solving its debt crisis as the country has decided to cancel more than $2 billion worth of projects financed by commercial loans.

The medium-term budget plan published by the ministry of finance on Saturday showed the country’s plan to reduce the risk of accumulating more non-concessional debt.

A high-level team of the International Monetary Fund (IMF), deputy managing director, Antoinette Monsio Sayeh last month visited Zambia on two-day to hold discussions with the country’s officials on the thorny issue of debt.

The Zambian President Hakainde Hichilema in April, during the first quarter 2022 Economic Conference in Lusaka, said China had come on board to commit and join other creditors in the country’s debt restructuring process.

The country’s debt profile has been spiraling in recent years owing to issues predating the pandemic, leaving creditors wrangling over who should take losses on loans.

Zambia opted to bow out of a $42.5 million eurobond repayment in 2020, becoming the first African nation to default on its debt in the Covid-19 era. The country was struggling with a debt burden of almost $32 billion, around 120% of its gross domestic product.

Zambia is second-largest copper producer in Africa with a forecast to grow 4%, 4.1% and 4.4% in 2023, 2024 and 2025, respectively.

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IMF mission concludes 4th loan program assessment in Egypt

Published

4 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

6 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.