Browsing: International Monetary Fund (IMF)

Kenyan Shilling
  • The Kenyan shilling has made a strong turnaround against the US dollar this week,
  • Last Tuesday, Kenya successfully raised $1.5 billion from its Eurobonds buyback offer initiated on February 7, reducing the chance of defaulting payment on its $2-billion-dollar debt due in June.
  • East Africa’s most robust economy plans to use the funds to repay its debut Eurobond issued in 2014.

The Kenyan shilling has made a strong turnaround against the US dollar this week, moving towards the most potent levels since March last year, mainly on investor confidence and increased inflows.

The shilling, which rallied against the dollar, gaining about 10 per cent, comes from a strong demand for the country’s Eurobond and an oversubscribed local infrastructure bond.

Last Tuesday, Kenya successfully raised $1.5 billion from its Eurobonds buyback offer initiated on February 7, reducing the chance of defaulting payment on its $2-billion-dollar debt due in June.

East Africa’s …

Nigeria's economy
  • Like many other countries, the IMF has noted that Nigeria’s economy faces a complex external environment and wide-ranging domestic challenges.
  • External financing (market and official) is scarce, and global food prices have surged, reflecting the repercussions of conflict and geo-economic fragmentation.
  • Per-capita growth in Nigeria has stalled, and poverty and food insecurity are high, exacerbating the cost-of-living crisis, according to the global lender.

Nigeria’s economy is not yet out of the woods, the International Monetary Fund (IMF) has indicated, with a potential economic crisis despite government interventions to improve the economy.

This is even as the country’s real GDP is projected to grow by three per cent this year compared to last year’s projection of 2.9 per cent.

Like many other countries, the IMF has noted that Nigeria faces a complex external environment and wide-ranging domestic challenges.

External financing (market and official) is scarce, and global food prices have surged, …

IMF loan to Kenya 2024
  • The IMF loan to Kenya provides a much-needed shot in the arm as it navigates debt repayments, including the $2.0 billion Eurobond maturing in June this year.
  • The country is expected to repay Eurobond debts of $1.96 billion in 2024, $880 million in 2027, and $978 million in 2028.
  • Debt repayment has pressured Kenya as it consumes more of forex reserves and ordinary revenues, wiping out gains in diaspora remittances and tourism earnings.

The IMF loan to Kenya

The International Monetary Fund (IMF) has approved a $684.7 million loan facility for Kenya, giving the East African country the much-needed support to navigate financial pressures amid a maturing Eurobond.

The funds are part of the $941.2 million Extended Fund Facility (EFF) and Extended Credit Facility (ECF) program approved in April 2021 and extended by 10 months in July 2023 to April 2025.

The first review under the 20-month Resilience and Sustainability …

Fuel inflation
  • Kenya’s inflation has eased for the second month in a row since hitting 8% in May.
  • The drop in the cost of living came despite increased taxes on pump prices that is manifesting in higher transport costs.
  • Previously, Central Bank Governor Kamau Thugge projected Kenya’s inflation to fall within the target band of 2.5% to 7.5% by October.

Kenya’s inflation eased in the month of July, going below the Central Bank of Kenya’s target range of between 2.5 per cent and 7.5 per cent for the first time in over a year. In the month under focus, Kenya’s inflation dropped to 7.3 per cent down from 7.9 per cent in June. The drop in the cost of living came despite increased taxes on pump prices that is manifesting in higher transport costs.

Consumer prices went up by 7.3 percent annually in July, marking the slowest rate in 14 months. This …

africa 2024 outlook
  • The Kenyan shilling has fallen to a new low of 140.04 against the US dollar.
  • Central Bank of Kenya data shows the unit is also losing to other major currencies including British Pound and Euro.
  • Last year, the Kenyan shilling depreciated by about 7.5 per cent against the US dollar, the UAE dirham (7.5%), Saudi Riyal (7.4%) and the Chinese Yuan (3.1%), the Kenya Economic Survey 2023 shows.

As developing market currencies continue to suffer from the worldwide increase in interest rates, which is being spearheaded by the US Federal Reserve, the Kenyan Shilling has dropped to a historic low in relation to the US Dollar.

The Fed has increased the benchmark rate ten times in a row, or a total of five percentage points, since March of last year. In the last 40 years, these increases are the most abrupt. In an effort to combat US inflation, interest rates…

Johannesburg South Africa
  • Experts warn South Africa’s growth is too low to create enough jobs to absorb new workers entering the labor market.
  • The country’s fiscal position is projected to deteriorate due to weakening mineral revenue. Utility Eskom’s debt bailout, wage bill, and rising debt pile more pressure.
  • As a result, public debt is not expected to stabilise. And headline inflation will return to the midpoint of the target range by end 2024.

South Africa’s real GDP growth is projected at 0.1 percent in 2023, reflecting a significant increase in the intensity of power outages, and weaker commodity prices and external environment.

According to the International Monetary Fund (IMF), annual growth is expected at about 1.5 per cent over the medium term. The country is under vice-like grip of long-standing structural impediments.

South Africa’s power outage woes

For instance, South Africa is struggling with product and labor market rigidities. It …

resilience and sustainability
  • An IMF team was in Nairobi from May 9 – 22, 2023, for the fifth review of Kenya’s economic program.
  • After engagements, Kenya secured a $544.3 million loan from the International Monetary Fund. 
  • The parties also agreed to extend the duration of the EFF/ECF arrangements by 10 months to April 2025.

Kenya has secured about $544.3 million loan from the International Monetary Fund (IMF) representing 75 percent of the country’s quota. The deal follows staff-level agreement between IMF staff and the Kenyan authorities on economic policies and reforms. It marks conclusion of the fifth reviews of Kenya’s Extended Credit Facility and Extended Fund Facility arrangements.

In the deal, Kenya secured an extension of the program and augmentation of access under those arrangements. The credit is also anchored on a set of reforms under a 20-month Resilience and Sustainability Facility.

Kenya’s economy, the largest in East Africa, has been strained by …

Dr Kamau Thugge
  • Dr Kamau Thugge, who is President Ruto’s advisor on fiscal affairs, is set to take over from Dr Patrick Njoroge.
  • Previously, Dr Thugge served as the Permanent Secretary at Kenya’s National Treasury between 2013 and 2019.
  • Prior to his nomination as Principal Secretary, he worked as a senior economic adviser in the Ministry of Finance since 2010.

President William Ruto has nominated former IMF economist Dr Kamau Thugge for appointment to head the Central Bank of Kenya. Dr Ruto picked Dr Thugge out of a list of six candidates who were interviewed on May 9th for the job that helps define Kenya’s fiscal policy.

Dr Thugge is not a stranger at Kenya’s financial industry. For close to 10 years, between 2013 and 2019, he served as the Principal Secretary, National Treasury under former President Uhuru Kenyatta. He was, however, hounded out of office over allegations of corruption. The scandal, which …

DRC Congo, Banks in Congo, Cobalt in Congo
  • DRC’s economy is rising with real GDP growth at 8.9 percent in 2022 and projected to 6.8 percent in 2023.
  • Macroeconomic imbalances have, however, emerged piling inflationary pressures.
  • The roiling conflict in the East and upcoming elections complicate macroeconomic management.

The International Monetary Fund (IMF) has outlined a number of tough measures for war-tone DRC as it seeks $200 million financing. The funds are part of the country’s Special Drawing Rights (SDR), the supplementary forex reserves maintained by the IMF. They are units of account for the IMF, and not a currency per se. What’s more, they represent a claim to currency held by IMF member countries and DR Congo can access about $200 million.

An IMF team led by Mercedes Vera Martin met with the authorities in Kinshasa between April 19–May 3. This was on the fourth review of the three-year arrangement under DRC’s Extended Credit Facility (ECF).

Macroeconomic

burundi
  • The credit seeks to restore external sustainability, and strengthen debt management while creating fiscal space for accelerated and inclusive growth.
  • The staff-level agreement is subject to IMF management approval and consideration by the Executive Board.
  • Burundi’s reform program aims to support economic recovery from shocks.

The International Monetary Fund (IMF) has agreed to dispatch a $261.7 million loan to crisis-saddled Burundi, its first in nearly a decade, as the country moves to bolster economic recovery and reforms.

The IMF boost to the poverty-stricken nation follows “a staff-level agreement on economic policies and reforms” that was struck for a new 40-month arrangement under the Extended Credit Facility (ECF) after the lender’s Mission Chief for Burundi, Mame Astou Diouf, visited Bujumbura in February.

Burundi’s reform program aims to support economic recovery from shocks, restore external sustainability, and strengthen debt management while creating fiscal space for accelerated and inclusive growth.

Since 2015, Burundi