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Ghana’s bondholders deal ‘a matter of time’— IMF

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It is only “a matter of time” before Ghana and the holders of its foreign bonds agree on a restructuring, IMF’s African Department director, Abebe Selassie, has revealed.

The claim comes after the fund said a previously proposed deal would not work with its rules. “It depends on … how much time and intensity the government is going to be able to devote to (bondholder negotiations) in the coming weeks,” Selassie said in an interview at the IMF Spring Meetings in Washington.

“It’s a matter of time rather than something pretty fundamental blocking it.”

Selassie told a separate news briefing on Friday that Ghana has not yet agreed to a Memorandum of Understanding (Mou) with its official bilateral creditors on a restructuring deal. This is the key to getting more IMF funding.

“We are confident that it’ll happen in the next few weeks. Good progress is being made in the negotiations and drafting. I don’t think there will be dragging,” IMF Mission Chief for Ghana Stephane Roudet told reporters separately.

“(Economic) growth has surprised us to the upside… We will revise growth up in 2024,” he added.
Ghana’s government said earlier this week that it had not been able to come to an agreement with two groups of holders of about $13 billion in foreign bonds on a restructuring plan that would work. They said that talks would continue until they found a deal that met the IMF’s debt-sustainability goals.

The most valuable company in Abu Dhabi has made an offer of more than $1 billion to buy a 51% stake in Vedanta Resources’ copper assets in Zambia, according to two people who know about the situation.

Ghana’s national debt to gross domestic product ratio was expected to decrease by 15 percentage points from 2023 to 2028. This prediction says that the percentage will have gone down for six years in a row, reaching 69.96% in 2028.

Ghana defaulted on most of its foreign debt in December 2022 because the costs of paying it off went up too high. It has since adjusted most of its domestic debt and needs to make a deal with private holders of about $13 billion in international bonds.

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Nigerian govt denies reports it plans to borrow pension fund for infrastructure

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The Nigerian government has denied reports that it plans to borrow the N20tn pension fund to finance infrastructural projects.

In a statement made in Abuja, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, stated that the government would abide by the laws and guidelines in place pertaining to the pension fund.

Following a two-day Federal Executive Council meeting at the Presidential Villa on Tuesday, the minister reportedly informed reporters that the government would present a plan to use local funds, including the fund, to finance infrastructure development.

Edunstated that the government does not intend to exceed these legal boundaries, emphasising that the government was committed to protecting workers’ pensions.

“It has come to my notice that stories are making the round that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth.

“The pension industry, like most the financial industries, is highly regulated. There are rules. There are limitations about what pension money can be invested in and what it cannot be invested in.

“The Federal Government has no intention whatsoever to go beyond those limitations and go outside those bounds which are there to safeguard the pensions of workers.

“What was announced to the Federal Executive Council was that there was an ongoing initiative drawing in all the major stakeholders in the long-term saving industry, those that handle funds that are available over a long period to see how, within the regulations and the laws; these funds could be used maximally to drive investment in key growth areas,” Edun clarified.

The plan to spend the pension fund was reported and was widely criticised. The Trade Union Congress of Nigeria and the Nigeria Labour Congress had earlier on Thursday urged the government to abstain from making any changes to the pension fund.

They stated, “Nigerian workers have entrusted their hard-earned savings for retirement security, not as a means for government projects. It is imperative to halt any further plans to tap into these funds, especially given the lack of transparency and accountability in past government borrowing practices.”

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Nigeria’s inflation hits 28-year high of 33.69% in April

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Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

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