VenturesNow

Zambia is being punished wrongly over debt restructuring— Finance Minister, Musokotwane

Published

2 years ago

April 6, 2023

Amidst the financial crisis facing the South African country, Zambia, it’s finance minister, Situmbeko Musokotwane has claimed that the country is being wrongly “punished” for a failure to complete debt restructuring.

Situmbeko Musokotwane argued in an interview in Lusaka when asked when news could be expected about the completion of the debt relief process.

“This is no fault of ours, it is the fault of those we engaged with,” he said.

“I don’t want to give a date, but all I can say is that there is very serious discussion that is going on. Everybody appreciates that Zambia is being punished for no fault of hers.”

Zambia is pushing hard to complete the restructuring of nearly $15 billion of external debt this quarter and is “in active engagement” with its largest bilateral creditor China. Many Western officials have blamed delays in agreeing the debt relief on China.

International lender, the IMF recently revealed that the next payout to Zambia from a $1.3 billion rescue loan was contingent on the country’s bilateral creditors reaching a debt restructuring agreement.

“The Chinese are asking questions, the bondholders are also asking questions … but constructive questions, so that’s no problem,” Musokotwane said.

“The good thing is that everyone is committed. Bondholders say they want a resolution to this, the Chinese say they want a resolution to this.”

Zambia was the first African country to default on its debt during the coronavirus pandemic. Of the total debt, China is the largest foreign creditor.

Zambia’s economy rebounded in 2021, with real GDP growing at 4.6%, from a contraction of 2.8% in 2020. In 2022, challenges in agriculture, mining, and construction slowed down its pace of post-pandemic economic recovery.

Click to comment

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

1 day 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.

VenturesNow

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.