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Kenya, IMF reach staff-level deal for extra $938 million

Published

6 months ago

November 16, 2023

The International Monetary Fund (IMF) has confirmed that it has reached a staff-level agreement with Kenya, unlocking immediate access to a $682.3 million credit tranche.

The agreement will also boost the current lending programme by $938 million as Kenya grapples with acute liquidity challenges caused by uncertainty over its ability to access funding from financial markets before a $2 billion Eurobond matures next June.

IMF’s head of the mission, Haimanot Teferra stated that “The tightening global financing conditions for frontier economies and global geopolitical tensions are compounding the challenges.”

Kenya will have access to a total of $3.88 billion, subject to the executive board of the Washington-based fund’s approval. This would increase Kenya’s total funding under the current Extended Fund Facility and Extended Credit Facility arrangements to $4.43 billion, according to the IMF.

Kenya would be able to pay off maturing foreign debt without depleting its hard currency reserves thanks to the new IMF financing, as well as anticipated funding from the World Bank and regional banks like Afrexim, the market participant stated.

The current programme, which was agreed upon in April 2021, was initially increased by an additional $1 billion in May.This increase included a new arrangement under the same RSF and $544 million under the IMF’s Resilience and Sustainability Facility (RSF).

Among the debt the government must pay in foreign currencies is a $2 billion Eurobond that is due in June of next year. Investors are a little concerned about the bond’s maturity because the refinancing option was out of reach due to an increase in yields.

To reassure markets that it was serious about containing the skyrocketing debt, President William Ruto’s administration drastically reduced the budget deficit in June, when it was first presented to parliament.

Kenya is one of the nations in Africa struggling with debt. The nation is currently having financial difficulties as a result of having to devote almost half of its income to paying off impending debt. The situation has been made worse by the sharp devaluation of the Kenyan shilling.

VenturesNow

Nigeria received $1bn tax income from Shell in 2023

Published

21 hours ago

May 8, 2024

Ifeoluwa Dada

Shell Nigeria, a multinational oil company, claims that through the operations of Shell Petroleum Development Company of Nigeria Limited and Shell Nigeria Exploration and Production Company of Nigeria Limited, it exclusively paid $1.09 billion in corporate taxes and royalties to the Nigerian government in 2023.

According to the numbers released in the recently released 2023 Shell Briefing Notes, SNEPCo remitted $649 million, while the SPDC paid $442 million.

Similar payments made by the two firms in 2022 totalled $1.36 billion, according to a statement from Abimbola Essien-Nelson, the company’s manager of media relations.

“These payments are Shell exclusive and do not include those made by our partners,” said SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Osagie Okunbor.

Okunbor explained, “Shell companies in Nigeria will continue to contribute to the country’s economic growth through the revenue we generate and the employment opportunities we create by supporting the development of local businesses.”

He continued by saying that Shell has been an investor in Nigeria for more than 60 years and that the Briefing Notes provide an update on the state of the companies’ operations in Nigeria for 2023, including SPDC, SNEPCo, Shell Nigeria Gas, and Daystar Power.

He claimed that the studies demonstrated how the businesses kept driving advancement, collaborating closely with communities and stakeholders to support socio-economic growth and offer more affordable, environmentally friendly energy options.

“It is important to emphasise that Shell is not leaving Nigeria and will remain a major partner of the country’s energy sector through its deep-water and integrated gas businesses. Our collective focus remains on delivery of safe operations and care for our people,” Okunbor maintained.

VenturesNow

Zimbabwe’s new gold-backed currency now official unit of exchange

Published

1 day ago

May 7, 2024

Ifeoluwa Dada

Zimbabwe’s Treasury says that the newly introduced gold-backed currency is the official unit of exchange for transactions. It also stated on Tuesday that laws requiring businesses to utilize the official rate would be released soon.

The Zimbabwe Gold (ZiG) has been stable on the official market since its inception in early April, but it has had a shaky start on the black market, where dealers are demanding a premium of 65% of the official rate to purchase dollars.

Additionally, some stores are charging customers who pay in the new currency—while the ZiG is being rejected by informal traders—a premium over the market rate, which is fixed at ZiG 13.6 per US dollar.

“To ensure orderly pricing, the Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services,” Finance Minister Mthuli Ncube said in a statement.

Since the ZiG’s inception, the government has been working to keep it afloat; this month, officials launched a campaign against unlicensed foreign exchange dealers.

Zimbabwe, located in southern Africa, abandoned the Zim dollar last month after it lost 70% of its value since the beginning of the year. This is the country’s fourth effort to introduce a local currency in ten years.