7 African nations set to receive $1bn from IMF

The International Monetary Fund (IMF) has over the past one month (October) reviewed the economic, financial, social and governance policies of about eight African nations with a view to opening its funding purse to strengthen their weakening forex reserves and offer budgetary support.

Completion of the reviews has resulted in over $1billion in financing commitments for seven of the eight nations pegged on approval by the IMF Executive board.

The funding was: Somali ($100 million), Democratic Republic of Congo ($200.39 million), Rwanda ($262 million), Tanzania ($150 million) Gambia ($10.9 million), Comoros ($4.7 million) and Senegal ($276 million).

And on Friday, the Fund announced it had reached a staff-level agreement with Tanzania on second review of the extended credit facility.

“Upon completion of the Executive Board review, Tanzania will have access to SDR113.37 million ($150 million), bringing the total IMF financial support under the arrangement to SDR342.1 million ($452.7 million),” said Charalambos Tsangarides, who led the IMF team.

In Zimbabwe, the outcome of the IMF staff visit is expected to serve as a key input in the preparations for a Staff Monitored Program (SMP) while in Mozambique the IMF team resolved to continue its discussions in the context of Third Review under the Extended Credit Facility (ECF) arrangement.

In Somalia, the IMF and the Somali authorities reached an agreement on key economic and financial policy reforms which now qualifies the country to a debt relief and an additional $100 million financing under a three-year Extended Credit Facility (ECF) arrangement.

The financing which is still subject to the fund’s Executive board approval follows the considerable progress that Somalia has made in rebuilding its economy and institutions under the current ECF-supported programme since 2020.

“Somalia has maintained strong implementation of wide-ranging reforms to help strengthen key economic and financial policy institutions,” IMF team leader Laura Jaramillo said in a statement last week.

October 24, the IMF team led by Edward Gemayel, conducted a mission in Dakar between October 12 and 24 to review progress under the authorities’ economic program supported by an Extended Fund Facility (EFF)/ECF arrangement of SDR1.13 billion (about $1.5 billion), combined with the Resilience and Sustainability Facility (RS) of SDR242.70 million (about $320 million).

The EFF/ECF and Resilience and Sustainability Facility (RSF) arrangement were approved by the IMF Board on June 26, 2023.

Completion of the reviews by the IMF Executive Board would lead to the disbursement of about $276 million or CFAF 169 billion.

In DRC, the IMF staff and the Congolese authorities reached a staff level agreement on economic policies to complete the fifth review of the three-year ECF supported programme which is expected to make available SDR152.3 million (about $200.39 million) by mid-December to build up international reserves.

Resilience and sustainability

In Rwanda, the IMF team reached a staff level agreement with the authorities on policies needed to complete the second reviews of Rwanda’s Policy Coordination instrument and programme under the Resilience and Sustainability Facility.

An agreement was also reached on a new 14-month Stand-by-Credit Facility with total access of 125 percent of quota (SDR200.25 million or $262 million) to help mitigate the balance of payment pressures arising from the climate-related shocks.

An IMF team led by Reuben Atoyan visited Kigali October 17-31 to discuss the authorities’ policy priorities and progress on reforms within the context of the second reviews of Rwanda’s PCI and RSF.

In Mozambique, the IMF staff discussed with the Mozambican authorities about performance and policies underpinning the third review of the program under the ECF arrangement.

“Discussions were fruitful and will continue in the coming weeks aiming to reach Staff Level Agreement,” according to the lender.

In Gambia, the IMF Staff and the Gambian Authorities reached a staff-level agreement on economic policies and reforms to be supported by a new 3-year arrangement under the Extended Credit Facility with requested access of SDR74.64 million (around $100 million).

The ECF-supported programme aims to strengthen economic recovery, tackle inflation, address debt vulnerabilities, advance structural reforms and foster strong and inclusive growth.

The IMF team led by Mr Ivohasina Fizara Razafimahefa, Mission Chief for The Gambia visited Banjul, The Gambia October 19 through November 1, to discuss with The Gambian authorities economic and financial policies under a new 36-month ECF arrangement.

The staff-level agreement, is subject to approval by the IMF Management and Executive Board which will make available about $10.9 million.

In Comoros, the IMF staff also reached an agreement with the authorities on economic policies and reforms under the 4-year ECF-supported programme.

The review once formally completed by the IMF Executive Board would release about $4.7 million in financing, bringing total disbursement under the arrangement to $9.5 million.

An IMF team led by Ms Suchanan Tambunlertchai visited Moroni October 18 through to October 31, to discuss economic and financial policies in the context of the first review of the programme supported by the ECF arrangement.