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UNDP administrator, Achim Steiner, wants emergency response for 54 countries in debt crises

Published

2 years ago

October 12, 2022

The United Nations Development Programme (UNDP) has warned that 54 countries across the world need immediate debt relief.

A senior official of the UNDP, Achim Steiner, called for measures, including writing off debt, offering wider relief to greater numbers of countries and even adding special clauses to bond contracts to provide breathing space during crises.

The number of countries in the crises account for more than half of the world’s poorest people, and are already in some sort of debt crisis, to avoid even more extreme poverty while giving them a chance of dealing with climate change.

The debt profile of many developing countries has reached disturbing states. So much so that, the president of one of Africa’s leading powers, Muhammadu Buhari of Nigeria at the last United Nations General Assembly called for debt cancellation for developing countries.

In Buhari’s Nigeria for instance, the public debt profile has risen significantly. The World Bank Fiscal 2022 audited financial statements for International Development Association (IDA), revealed the country now owes a debt stock of $13bn as of June 30, 2022.

Other countries like Zimbabwe, Zambia, Chad, Ghana, and Tunisia to mention a few are also in the thick of economic and financial crises. Earlier in the week, a senior official of the International Monetary Fund, IMF, Kristalina Georgieva, argued debt restructuring arrangements for Zambia and Chad completed shortly.

External debts are not as contentious in many African states as the discipline to expend the funds appropriately on development-centered projects, which has always been a course for concern amidst the nature of corruption and wastefulness that characterizes the political and public system in Africa.

Another case study of Nigeria, whose president recently presented its 2023 proposed budget to its national legislature revealed that the office of the President and his Vice proposed to expend a whopping N11.92bn on local and foreign trips and the presidential air fleet. For a country in a debt mess and dwindling economy, more prudent measures for public expenditure are necessary.

Related Topics:DEBT CRISIS Featured UNDP

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IMF mission concludes 4th loan program assessment in Egypt

Published

3 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

2 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.