Browsing: IMF Approves Loan

• In April, Ghana’s inflation eased for the fourth month in a row to 41.2%. In December the West African country’s inflation hit a record 54.1%.
• With the depreciating local currency against the US dollar, imports have become increasingly out of reach for millions of citizens.
• In early May, the IMF wired $3 billion to the Central Bank of Ghana to cushion is fast waning forex reserves.

The Central Bank of Ghana has maintained key interest rate at 29.5 percent to help tackle high inflation plaguing the West African Country. The fiscal policy regulator notes that the tight monetary stance and stabilising currency rates are playing a significant role in its decision. 

Central Bank of Ghana tackling inflation

Ghana, well known for its cocoa, gold, and oil, has suffered immensely, with recent fiscal measures causing high inflation rates. According to statistics, the West African nation is facing the worst economic crisis …

• Mozambique’s public debt is expected to drop below 100% in 2023, boosted by the country’s improving economic growth and higher gas revenue
• S&P Global Ratings states Mozambique’s ability to service its rising debt hinges on TotalEnergies SE’s liquefied natural gas project, which has stalled due to terrorism
• TotalEnergies is investing billions in its gas project located in the Cabo Delgado province of Mozambique

Mozambique’s external public and publicly guaranteed debt surged from 61% of GDP in 2016 to 104% in 2018, as undisclosed liabilities were exposed. This led to an unbearable debt service burden, causing Mozambique to default on its debt in 2016. Consequently, credit rating agencies lowered the sovereign’s ratings to selective or restricted default, while the World Bank and the IMF reclassified Mozambique’s external debt as “in distress.”

The revelation of the “hidden” loans had a significant impact on Mozambique, leading to a prolonged economic downturn. The country’s …

• The IMF deal caused the cedi to appreciate, relieving price constraints and potentially mitigating a downturn in commercial activity
• S&P Global’s Purchasing Managers’ Index, which gauges the health of the private sector, increased somewhat from 44.9 in November 2022 to 47 in December 2022
• The cedi gained 41% versus the dollar last month and saw a reduction in projected losses for 2022 to 39%, which lowered inflation and gave businesses some reprieve

A staff-level finance agreement with the IMF caused the cedi to appreciate, relieving price constraints that have afflicted the industry for more than a year and potentially mitigating a downturn in commercial activity in Ghana.

S&P Global’s Purchasing Managers’ Index, which gauges the health of the private sector, increased somewhat from 44.9 in November 2022 to 47 in December 2022.

However, it remained below the 50-point threshold that distinguishes expansion from contraction for the 11th consecutive month.

According …

• The International Monetary Fund (IMF) Executive Board has authorised a Sh55.1 billion (US$447.39 million) loan to Kenya
• Kenya has received a total of around $US1.655 billion (Sh203.84 billion) in payments under the EFF/ECF accords
• IMF stated that Kenya’s economy is solid and expects it to expand by 5.3% 

The International Monetary Fund (IMF) Executive Board has authorised a Sh55.1 billion (US$447.39 million) loan to Kenya for budgetary support.

This follows the fourth evaluation of the 38-month, $US2.34 billion (Sh288 billion) Extended Credit Facility (ECF) and Extended Fund Facility (EFF) agreements with Kenya.

Kenya has now received $US1.655 billion (Sh203.84 billion) in payments under the EFF/ECF accords.

The facility, approved in April 2021, was aimed at helping Kenya manage its debt risks, respond to the Covid-19 pandemic and other global shocks, improve governance, and implement more extensive economic reforms.

IMF confidence in Kenya’s economy

Despite a challenging global economy, the IMF …