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Malawi ‘very optimistic’ about debt restructuring deal with IMF

Published

1 year ago

September 6, 2023

The Malawian government said it was “very optimistic” about a restructuring agreement with the International Monetary Fund (IMF) over the country’s $1.2 billion external debt.

Malawi’s finance minister, Sosten Gwengwe revealed that it hoped to secure a new IMF loan programme by the end of the year.

After visiting IMF deputy managing director, Gita Gopinath, the minister informed reporters that Malawi needed assurance letters from its “two main bilateral donors,” China and India, that they were supportive of the debt restructuring procedure in order to get the IMF loan.

According to a July IMF estimate, Malawi owed the Export-Import Bank of China $222 million and the Export-Import Bank of India $114 million at the end of 2022. Also, it owes $337 million to the Trade & Development Bank and $495 million to the African Export-Import Bank; both creditors have agreed to the restructuring.

“We are very optimistic,” he said when asked if he thought Malawi would secure an IMF loan by the end of the year.

“But I should also hasten to say that yes, we’ve gone through a lot of difficulties the past two years, but it’s not over yet. We still need to continue walking the path.”

Landlocked Malawi, where about 58.8 per cent of the population now lives in extreme poverty, is also currently dealing with significant shortages of essential imports including fuel, medications, and fertilizers, because of a lack of foreign currency. Long lines of vehicles and robberies at gas stations are the results of this.

Zambia, Ghana, Ethiopia, Chad, and Sri Lanka are the five African states that have formally defaulted on their national debt to date. Zambia has successfully submitted an application for its debt restructuring plan under the G20 framework; the agreement is still in the works, and Malawi will be hoping to get lucky also.

VenturesNow

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.