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US Treasury Secretary, Yellen to meet IMF, World Bank over Ghana, Zambia debt crises

Published

2 years ago

April 11, 2023

The United States Treasury Secretary, Janet Yellen has promised to push for a quick resolution of the debt crisis in Zambia and Ghana.

Yellen will be meeting officials of the World Bank and International Monetary Fund (IMF), and will lobby for concrete steps to speed up the overall debt relief process and make it more predictable, Treasury Undersecretary Jay Shambaugh said.

The Treasury said in a statement that “during the week, Secretary Yellen will … maintain urgency for the speedy resolution of Common Framework cases like Zambia and Ghana to remove debt overhangs and foster growth in developing countries.”

“At a broad level, we’re really just pushing to improve the speed and predictability of this framework,” Shambaugh said at an event hosted by the Brookings Institution think tank. “This is going to require constructive and timely participation of all creditors in international debt restructuring discussions.”

The two countries who have both defaulted on their loan repayments are currently facing financial struggles and are fighting for restructuring of their sovereign debts, and moves to conclude a debt treatment, Treasury said on Monday.

Some 60% of low-income countries are in or near debt distress, but the Group of 20 (G20) common framework set up to help low-income countries has failed to deliver quick debt relief.

China on Monday urged the United States to take seriously its obligations and make more effort to resolve the debt problems in African countries.

The Chinese maintained that “data from the World Bank showed that multilateral financial institutions and commercial creditors hold nearly three-quarters of Africa’s total external debt, creating the biggest debt burden for African countries. which constitutes the biggest source of debt pressure on developing countries”.

Although Yellen has no scheduled formal meetings with Chinese counterparts, a US source stated that communication between China and the Biden administration would continue “where we are able to.”

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IMF mission concludes 4th loan program assessment in Egypt

Published

5 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.