VenturesNow

Tunisia considering raising tax on upper class amid delay in IMF loan

Published

1 year ago

June 2, 2023

Tunisia appears to have found a way around its revenue challenge with plans to raise taxes targeting the upper class in its society.

President Kais Saied on Thursday announced that additional taxes would be introduced as a stopgap measure ahead of an expected loan from the International Monetary Fund (IMF), whose “diktats” he rejects.

According to a press release from the presidency, President Saied maintained that the system of subsidies for basic products currently in place in the country benefitted everyone, including the wealthiest.

He revealed that the country was considering the idea of “taking the surplus money from the rich and giving it to the poor” to be relevant in its current situation.

“Instead of lifting subsidies in the name of rationalisation, it would be possible to introduce additional taxes for those who benefit from them without needing them”, he added.

Tunisia’s General Labour Union (UGTT), a few months ago, raised concerns over the proposed financial bailout by the IMF for the country. Labour officials during the May Day celebration criticised what they described as “an IMF government” as protesters chanted “No to colonization.”

Tunisia, which is indebted to the tune of roughly 80% of its GDP, received an agreement in principle from the IMF last year for a new loan of nearly $2 billion to assist it in overcoming its severe financial crisis.

However, discussions have come to a halt due to the country’s lack of a firm commitment to implement a reform programme to restructure Tunisia’s more than 100 public companies, which are heavily in debt, and to lift subsidies on certain basic products.

Italy has raised concerns over IMF’s decision to block a $1.9 billion loan to Tunisia amid fears it might lead to a new wave of migrants towards Europe.

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

2 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

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.