Browsing: International Monetary Fund (IMF)

Millions of jobs could be created if governments spend more-IMF

Governments should increase public investments to boost their economies after the massive shock from the Covid-19 according to the International Monetary Fund (IMF).

In June the IMF predicted a contraction of 4.9 per cent in global GDP for 2020 but the fall could be even higher as many governments are now dealing with the second wave of infections. The IMF is now calling on governments to increase public investments so as to aid economic recovery and create jobs.

“For advanced and emerging market economies … Increasing public investment by 1 per cent of GDP in these economies would create 7 million jobs directly, and between 20 million and 33 million jobs overall when considering the indirect macroeconomic effects,” the fund said in its latest Fiscal Monitor.

IMF said that in the period of high uncertainty, increasing public investment by 1 per cent of GDP could strengthen confidence in the recovery …

Global debt-to-GDP to reach 100% in 2020: IMF

The global public debt will record a high of 100 per cent to GDP in 2020 according to the International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

Kristalina Georgieva was speaking during a virtual press conference entitled “Overcoming the Crisis and Building a More Resilient Economy.”

“The picture today is less dire, as we now estimate that developments in the second and third quarters (Q2 and Q3) were somewhat better than expected, allowing for a small upward revision to our global forecast for 2020. We continue to project a partial and uneven recovery in 2021. We expect global output to remain well below our pre-pandemic projections over the medium term. For almost all countries, this will be a setback to the improvement of living standards.” She said

She added that now the projections are less dire as central banks and fiscal measures have given a powerful injection of liquidity in …

IMF approves $4.3b in Emergency Support to South Africa

The International Monetary Fund (IMF) executive board approved $4.3 billion requests for emergency financial from South Africa to address the challenging health situation and severe economic impact of the COVID-19 shock.

The funds are under the Rapid Financing Instrument (RFI) which aims at meeting the urgent balance of payment (BOP) needs stemming from COVID-19 pandemic outbreak, limit regional spillovers and catalyze additional financing from other international financial institutions.

The outbreak of the pandemic has led to a sharp economic contraction and significant financing need in South Africa.

Over the last decade, economic activity in the country has weakened despite government spending, this has resulted in increased poverty, unemployment and income inequality.

“South Africa’s economy has been severely hit by the COVID-19 crisis, reporting the highest number of cases in sub-Saharan Africa. A deep economic recession is unfolding as the decline in domestic activity and disruptions in the global supply chain …

IMF approves $69.49 Million for Chad

The Executive Board of the International Monetary Fund (IMF) approved a disbursement under the Rapid Credit Facility (RCF) of about $69.49 million to Chad to address urgent balance of payment needs stemming from the COVID-19 pandemic.

This is the second funding in three months under RCF to address financing needs arising from the pandemic, which brings the country’s total IMF support since COVID -19 pandemic outbreak to $183.60 million. The board also confirmed the cancellation of the Extended Credit Facility (ECF) arrangement which was to expire end of September this year.

The IMF’s second RCF will provide timely support for the implementation of additional measures to address the COVID-19 crisis and lessen its severe impact. Chad’s authorities are also taking steps to ensure transparency and accountability in the use of COVID-related resources, including an ex-post audit of crisis-related spending and the publication of crisis-related procurement contracts.

The Chadian economy continues …

IMF $5.2 Billion Stand-By Arrangement for Egypt

The IMF executive board approved a 12-month Stand by Arrangement (SBA) with the access of about $5.2 billion to help Egypt address balance of payment to finance COVID-19 needs.

The  Fund-supported program aims at helping Egypt cope with challenges posed by the COVID-19 pandemic by providing Fund resources to meet the country’s balance of payments needs and to finance the budget deficit.

The approval of the SBA enables the immediate disbursement of about $2 billion while the remainder will be phased over two reviews.

The SBA will also help support the government’s efforts to preserve the macroeconomic achievements made over the past four years and advance key structural reforms.

The advanced structural reforms will help improve governance and transparency, strengthen the frameworks for public finances, reduce hindrance to competition to move towards sustainable and inclusive private sector growth and support health and social spending to protect vulnerable groups.

In 2016 …

IMF approves $1b to Ghana to address COVID-19

International Monetary Fund (IMF) Executive Board approved the disbursement of $1 billion to Ghana to address the COVID-19 Pandemic.

Ghana has already been affected by the pandemic with the country’s growth slows down, exchange rates under pressure and tightening of financial conditions.

The fund to be drawn under the Rapid Credit Facility will help meet the pressing fiscal and balance of payments needs that the country is facing and speed support from other development partners.

The International Monetary Fund (IMF) is closely monitoring ghana’s situation and is ready to provide policy advice and further support if needed.

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“The COVID-19 pandemic is impacting Ghana severely. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s …

IMF approves $165.99m to Madagascar for COVID-19

The International Monetary Fund (IMF) Executive Board approved $165.99 million to help the Republic of Madagascar to address the urgent balance of payment that needs stemming from the outbreak of the COVID-19 pandemic.
The funds were under the Rapid Credit Facility (RCF). RCF provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need.

Madagascar’s economy has largely been affected by the coronavirus pandemic with the country’s tourism dramatically declining, trade and investments declining as well as interferences in the manufacturing and mining exports.

The government of Madagascar is taking immediate actions to mitigate the shock of the COVID-19 pandemic by putting immediate fiscal measures to strengthen social protection and support the most vulnerable in society.

Suspension of fees and social contributions to aid the private sector in the country, donating staple food and also providing liquidity to preserve the stability of …

Uganda rallies regional states to rethink expensive debt path

A three-day regional conference on debt management in sub-Saharan African convened in Uganda this week is expected to conclude into signing a paper to be presented at several forums.

The forums will include the next World Bank spring meeting to highlight governments’ discomfort with some conditions tied to loans.

Uganda’s Ministry of Finance acting director for debt and cash policy management, Maris Wanyera, said the conference will be attended by delegates from 16 countries, under the theme “sustainable public debt management and a strengthened economic growth”

She also said that in light of the ongoing borrowing frenzy by African countries to finance their development agenda, the conference is long overdue.

“The idea is to come up with a strategy; a voice we can use while negotiating some of these loans. Debt [borrowing] is not bad at all, as long as we borrow for the right purposes and negotiate well, but …

IMF urges Botswana to start consolidating in 2020

The International Monetary Fund (IMF) has urged Botswana to start a fiscal consolidation programme in 2020 to reduce the budget deficit and contribute to a gradual rebuilding of its buffers.

“While Botswana still has some fiscal space that allows a gradual adjustment, fiscal consolidation should start in 2020, supported by both revenue and expenditure measures,” said the IMF.

IMF said the composition of the adjustment needs to be carefully calibrated to minimise the impact on competitiveness, growth and the most vulnerable in advancing consolidation.

By 2036, Botswana wants to do away with the model its economy being heavily reliant on mining and government expenditure as the country strives to become a knowledge-based economy and gain high-income status through the private sector and exports.

According to the IMF, this switch will spur a need to redo the macro-economic policy frameworks so as to increase the resilience of the economy and accelerate …