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Tag: IMF

IMF reviews debt sustainability framework to address COVID-19 economic impacts

IMF reviews debt sustainability framework to address COVID-19 economic impacts

Economy
New document to take effect in Q4 2021  Following concern over sovereign debts, the International Monetary Fund (IMF), has reviewed its debt sustainability framework for Market Access Countries (MAC).   The new structure will help countries identify risk in ‘sovereign stress’ and align with IMF’s lending framework, the Fund has announced yesterday.  According to the institution, the review was carried out on January 14. It stressed that the new framework, which comes with sweeping changes to the existing document, would be operational in the last quarter of the year/first quarter of 2022. The framework, it noted, would be useful for predicting “sovereign stress with greater accuracy. “The new framework includes a broader and more consistent debt coverage, a longer projection h...
Hope for single African market in 2021 as borders open for AfCFTA

Hope for single African market in 2021 as borders open for AfCFTA

Capital Market
As expectations are high about the reopening of more land borders to regional trade this week, the country would address hiccups in its trade policies to optimize the benefits of the African Continental Free Trade Area (AfCFTA) scheduled to take off January 1, 2021.   The Federal Government recently reopened four borders – Seme border in the South West, Illela and Maigatari border in the North West and Mfun in the South South with optimism that others would be reopened on December 31. This action would enable Africa’s largest economy to participate fully in the long-awaited Africa’s single market. The border closure, which lasted for 16 months, posed different challenges to cross-border traders, corporate entities and private engagements around the regional line. On No...
‘How intervention funds will cushion rate of recession, sustain productive momentum’

‘How intervention funds will cushion rate of recession, sustain productive momentum’

Business
Business cycle is a feature of the economic growth process. Business cycles refer to fluctuations in output, which define whether an economy is in boom or burst. Both developed and developing economies have to contend with each phase of the cycle with distinct characteristics. The boom period is characterised by high gross domestic product (GDP) growth, increased investments and consumption, while negative growth, low savings and investment, with high unemployment are features of a burst cycle. Recession is a major feature of the bust cycle. Technically speaking, an economy is in a recession when the GDP growth is negative for two consecutive quarters. During a recession, there is a substantial slowdown in consumer spending with a concomitant decline in business activity. ...
IMF-induced policies will repress Nigeria’s currency, Labour warns

IMF-induced policies will repress Nigeria’s currency, Labour warns

Finance
Submitting to the International Monetary Fund, IMF-induced policies would further distort and repress Nigeria’s currency, organised labour has warned. They argued that embracing the policies would lead the nation to a situation where a U.S. Dollar would exchange for more than N600. Labour, under the Association of Senior Civil Servants of Nigeria (ASCSN), at its 4th Quadrennial Delegates Conference, in Abuja, called on the Federal Government to rise up to the occasion to defend the Naira through a well-coordinated approach. President of the ASCSN, Bobboi Kaigama, in his remark, noted that with the numerous sources of inflow of foreign currencies into Nigeria that if well-tapped and managed could shore up the value of the Naira. He said the dire strait the country found itse...
Nigeria, others face $44 billion financing gaps despite huge loans

Nigeria, others face $44 billion financing gaps despite huge loans

Economy
Still struggling to deal with the impact of the coronavirus on their economies, the International Monetary Fund (IMF), has said Nigeria and other countries in the sub-Saharan African (SSA) region would need additional financing needs of over $110 billion. Of this $110 billion and approved loans, the IMF insisted that the countries still have $44 billion financing gap to fill. Noting that many citizens are informal workers and typically have few savings and limited access to finance, the IMF ruled out further considerations of lockdown to check the pandemic, saying that effort complicates the authorities’ hard work to maintain an effective lockdown. The recent Senate’s approval of President Muhammadu Buhari’s $5.513 billion loan request bumped Nigeria’s external debt profile to $3...
‘Demand for oil may not rebound anytime soon’

‘Demand for oil may not rebound anytime soon’

Energy
Although many economies are looking at easing the lockdowns as part of measures to avoid the long-term effects of a recession, the global energy imbalance is expected to continue for a longer period as demand for oil remains low. According to latest estimates, oil demand is expected to be down by nearly 30 million barrels per day (mb/d) this month, and down by almost 10 mb/d for the entire year, but some forecasts still optimistically assume that demand bounces back in the second half of the year, a scenario that may not come to pass. For many, simply lifting stay-at-home measures does not return the economy to normal, as a lot of people will likely continue to stay home until they feel safe. For oil dependent economies like Nigeria, the challenge of containing community spread a...
IMF Urges African Countries to Remain Committed to AfCFTA

IMF Urges African Countries to Remain Committed to AfCFTA

Business
The Managing Director, International Monetary Fund (IMF) Mrs. Kristalina Georgieva has advised Africa not to deviate from its plans to enforce the African Continental Free Trade Agreement (AfCFTA). She described the initiative as a catalyst for enhanced growth. Georgieva said this recently at the just concluded Virtual Spring Meetings of the IMF/ World Bank in Washington. Responding to a question on how badly the pandemic has affected African economies, she said: “Sub-Saharan African had a lot of countries stepping up over the last years and it is so tragic to see that momentum being stopped and then a number of countries that have even before the coronavirus had been experiencing very dramatic difficulties, conflicts and natural disasters. “Sub Saharan Africa ought to be the ...
OPEC expects recovery in Q4, fall in demand to 19.73 mil b/d in Q2

OPEC expects recovery in Q4, fall in demand to 19.73 mil b/d in Q2

Oil & Gas
OPEC is banking on global oil demand recovering by more than 10 million b/d from the second quarter to the fourth quarter of 2020 as it embarks on a global supply pact along with allies and rivals to provide relief for a coronavirus-stricken oil market. OPEC’s analysis arm, like many other agencies, severely cut back its demand forecast for 2020 as the COVID-19 pandemic has spread fast globally, jolting an oil market with a historic shock described as “abrupt” and “extreme.” Meanwhile, the International Monetary Fund (IMF) has said the outlook is subject to exceptionally high uncertainty, reaffirming that extraordinary macroeconomic action, and working together, will contribute to a faster recovery. “Targeted and sizable fiscal support is critical to provide a safety net for the ...
‘Nigeria, others facing unprecedented threat to trade, development

‘Nigeria, others facing unprecedented threat to trade, development

Business
Nigeria and other sub-Saharan African (SSA) countries are facing an unprecedented health and economic crisis that threatens to throw the region off its stride, reversing the development progress of recent years and slow the region’s growth prospects in the years to come, the International Monetary Fund (IMF) has said. According to the IMF, the health crisis has precipitated an economic crisis reflecting three large shocks: disruption of production and a sharp reduction in demand; spillovers from a sharp deterioration in global growth and tighter financial conditions; and a severe decline in commodity prices.  On trade, the IMF said a sharp growth slowdown among key trading partners reduces external demand, while disruptions of supply chains lower the availability of imported go...