Aurelia Butler

“The Tunisian authorities did not ask us to reconsider the program so far,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said in a press briefing in Washington, where the IMF and World Bank are holding their spring meetings. “The Fund did not impose any diktats,” Azour said, according to the TAP state news agency.The IMF postponed in December its board meeting on a loan program for Tunisia that was scheduled to give the authorities more time to finalize it.But Tunisia’s President Kais Saied gave his clearest rejection yet of the terms of a stalled $1.9 billion IMF bailout package when he said last week he would not accept “diktats” and suggested that subsidy cuts could lead to unrest.Tunisia reached a staff-level agreement with the IMF for the loan in September, but it has already missed key commitments, and donors believe the state’s finances are increasingly diverging from the figures used to calculate the deal.”This program has been designed, proudly by the Tunisian authorities,” Azour said during the briefing. “A team of more than 100 high civil servants around the prime minister were working on the design of the program. This is a program that will help Tunisia stabilize its economy, address – in a world of high uncertainty – the challenges in terms of getting access to finance.” The reform package includes reducing food and energy subsidies, restructuring public companies, and reducing the public wage bill.Without a loan, Tunisia faces a full-blown balance of payments crisis. Most debt is internal but there are foreign loan repayments due later this year, and credit ratings agencies have said Tunisia may default. More

The IMF in December approved a $3 billion Extended Fund Facility loan for Egypt, which has been under acute financial pressure since long-standing problems were exposed by economic fallout from the war in Ukraine.Disbursements under the 46-month programme are subject to eight reviews, the first of which was dated March 15, 2023, in an IMF staff report published in December.”We are in regular dialogue with authorities in order to prepare for the first review… Preparations have started and when we and the authorities are ready we will announce the date,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, told a news conference.  He said that among priorities were for Egypt to adopt a flexible exchange rate, reduce inflation by using monetary policy instruments, especially interest rates, and open more space for the private sector by levelling the playing field with state companies. “Egypt really needs to show some meaningful measures to rebuild confidence and show that the process has started,” said Monica Malik of ADCB. “It’s better to start the review once there is tangible signs of process with reforms, including on a flexible currency.” The official Egyptian pound’s exchange rate has remained nearly unchanged for more than a month at about 30.93 to the dollar, despite a promise by the central bank in October to let supply and demand determine its price. Banks and businesspeople continue to complain of a severe foreign currency shortage, and the pound’s price on the black market has fallen to about 36.00. In its December accord with the IMF, Egypt also promised to sell state assets worth billions of dollars over the next four years. It has made no major sales since the signing, though the central bank has raised its overnight interest rates by 500 basis points. “Egypt has done important reforms over the last few years, and the fund has been very supportive..,” Azouri said. “We are still supportive of Egypt’s reform agenda.” More

WASHINGTON (Reuters) – Ethiopia is in talks with the International Monetary Fund (IMF) to borrow at least $2 billion under a reform program, four sources familiar with the matter told Reuters.The IMF is still working on assessing the country’s debt sustainability after a request for a program equivalent to about 500% of the size of its stake in the global lender, the sources said this week on condition of anonymity because the talks are private. In this first debt analysis, the IMF calculated that Ethiopia is set to face a financing gap of at least $6 billion until 2026, according to two sources close to the negotiations. That would still leave a funding hole of roughly $4 billion over that period should the country succeed in securing the amount under discussion. Talks are still ongoing in Washington this week during the IMF and World Bank spring meetings. An IMF staff mission visited Addis Ababa from March 27 to April 7. “The scope of the support for Ethiopia is yet not set in stone, both parts are still working on the debt sustainability analysis,” one of the sources said.An IMF spokesperson did not immediately reply to a request for comment. Ethiopia’s State Finance Minister Eyob Tekalign Tolina and central bank chief Mamo Mihretu also did not immediately respond to Reuters’ requests for comment.Africa’s second-most populous country in early 2021 requested a broader debt rework under the Group of 20’s Common Framework, an initiative for restructuring government debt aimed at low-income countries. But progress has been complicated by a two-year civil war that broke out in November 2020, leading to the deaths of thousands of people and displacing millions more. More

JOHANNESBURG (Reuters) -South Africa needs to urgently fix energy, transport and security challenges if it is to reverse souring investor sentiment, executives said on Thursday as President Cyril Ramaphosa targets 2 trillion rand ($111 billion) in new investments over the next five years.Executives were speaking at the South African Investment Conference in Johannesburg, launched by Ramaphosa in 2018 as a way to boost economic activity that had been in decline for over a decade in Africa’s most advanced but struggling economy. Mismanagement and corruption at state-owned companies, including power utility Eskom and freight logistics group Transnet, have had a knock-on effect on ports and road transport, hitting efficiency and dampening investor appetite.”We are confronted with the consequences of years of underinvestment, mismanagement and corruption in the electricity and rail sectors,” Ramaphosa told attendees, promising to workwith the private sector to remove investment stumbling blocks.”As I announced in the State of the Nation address in February, we are now setting a new target to mobilise approximately 2 trillion rand in new investments over another five-year period,” the president said.Emrie Brown, chief executive of financial services holding company Rand Merchant Bank, told attendees the firm’s clients were concerned about the rising cost of production as a result of challenges in the country. “The way we see it for the future of South Africa, international investment is so important and these challenges make it difficult for us to position the potential of South Africa as an attractive investment destination while there is uncertainty on when reforms will be implemented,” Brown said. Anglo American (LON:AAL) CEO Duncan Wanblad said: “There are a few quick wins that we need to achieve to be able to change and turn that negative investor sentiment around.”South Africa has experienced its worst power cuts on record, leaving businesses and households in the dark for up to 10 hours daily. The South African Reserve Bank estimates these blackouts have shaved off at least 2 percentage points from growth.Ramaphosa will be looking to make good on his government’s reform promises as he gears up to be elected for a second term as president in next year’s national elections.In his closing remarks on Thursday, Ramaphosa said the 1.2 trillion rand investment target announced in 2018 was exceeded, as pledges reached 1.51 trillion rand.”The success of this first phase must be a springboard towards a recovered, reconstructed, inclusive new economy,” he said to a standing ovation from the delegates.($1 = 18.0603 rand) More

Frustration is growing over the lack of resolution in the talks, which started in May. Major shippers – including suppliers to retailers including Walmart (NYSE:WMT) Inc and Home Depot Inc (NYSE:HD) – have been diverting cargo from the West Coast to rival seaports on the East Coast and Gulf of Mexico to avoid potential work stoppages. The PMA, which represents West Coast port employers, said the International Longshore and Warehouse Union (ILWU) Local 13 disrupted terminal operations at the Ports of Los Angeles and Long Beach by refusing to allow it to participate in the jointly administered labor dispatch process. “These actions have slowed the start of operations throughout the Southern California port complex,” PMA said. The ILWU did not immediately respond to a request for comment. The contract between PMA and the ILWU expired on July 1, 2022.Last month, the National Retail Federation (NRF) led a group of more than 200 trade associations in calling on President Joe Biden to help the negotiating parties quickly reach a new agreement.PMA last week said ILWU Local 13 withheld labor that shut down terminals on the evening of April 6 and the day shift on April 7, which was observed as a Good Friday holiday at some businesses. The disruption coincided with a routine monthly “stop work” meeting on April 6, Los Angeles Port Director Gene Seroka told reporters on a conference call on Wednesday. “The collective bargaining agreement between the union and the employers guarantees these monthly meetings, which are dedicated to addressing the union’s proceedings,” Seroka said. While the impact from last week’s actions was relatively minor, Seroka said it is crucial for the two sides to reach a deal to remove uncertainty and regain the confidence of retailers and other shippers using the trade gateway. More

(Reuters) – The International Monetary Fund is working closely with Suriname authorities to bring their financing program back, while looking for progress in government talks with China, a key creditor, an IMF official said on Thursday.The IMF and Suriname engaged in a financing program for nearly $700 million in late 2021, but it stalled after the first review was approved more than a year ago. About $110 million in disbursements was announced before the program derailed.”We’ve been working quite hard with them to try and bring the program back on track in order to continue with the investments in macro stability that the government has been making,” said Nigel Chalk, acting director of the Western Hemisphere department at the IMF, in a press conference.”The authorities are here right now, we’re having discussions with them,” Chalk said, adding that he looks forward for a mission visit soon to “deepen those discussions.”He said dealing with bilateral creditors has been “tricky” for Suriname, and asked about the eventual restructuring of the government’s debt to China, Chalk said:”We had basically moved forward on the program on the basis that they were essentially not paying the debt to China and would be eventually restructured.”Chalk also mentioned Suriname’s agreements with the Paris Club and India in terms of restructurings.”Having some more progress on the debt restructuring talks with China would really help us with the program, and help the country,” he said. More