VenturesNow

IMF lends $261 million to Burundi for economic recovery

Published

2 years ago

April 11, 2023

For the first time in eight years, Burundi has received $261 million from the International Monetary Fund (IMF) which will help with its economic recovery.

The IMF said it had reached an agreement on a 40-month $261.7 million arrangement with Burundian authorities under the Extended Credit Facility (ECF). ECF provides medium-term financial assistance to low-income countries (LICs) with protracted balance of payments difficulties.

“This is the first Upper Credit Tranche-quality programme for Burundi supported by the Fund since 2015. The programme aims to support a calibrated macroeconomic policy mix to restore external sustainability, and strengthen debt sustainability, while supporting economic recovery from shocks and creating fiscal space for accelerated and inclusive growth”, IMF said, adding that discussions held with the Burundian authorities covered recent macro-developments, the impact of the various domestic and external shocks, and Burundi’s macro-policy plans and structural reform agenda.

The IMF also revealed that Burundi’s real GDP growth is estimated to have slowed down to 1.8 percent in 2022 (from 3.1 percent in 2021) but is projected to rebound to 3.3 percent in 2023.

The inflation rate in 2022 averaged 18.9 percent and has continued to scale as it peaked at 28.6 percent year-on-year at the end of January, as food prices hit the roof but are projected to remain around 18 percent in 2023.

“External rebalancing and unwinding monetary financing. The central bank (BRB) is committed to recalibrating monetary and external policies to address the below-adequacy FX reserves (1.5 months of imports at end-2022) and large parallel FX market premium.

Despite the odds however, the African Development Bank rates Burundi’s economic outlook as favorable, with projected GDP growth rates of 3.6% in 2022 and 4.6% in 2023 owing to the continuing recovery of agriculture and public investment.

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

12 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.

VenturesNow

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.