Zambian economy will suffer further setbacks

2020 ◽  
Keyword(s):  
Economic Crisis ◽  
Food Crisis ◽  
Fiscal Consolidation ◽  
Mining Sector ◽  
Content Type ◽  
The Imf

Subject Zambian economic crisis. Significance Despite evidence of a renewed commitment to fiscal consolidation and apparently improving relations with the IMF, a power and food crisis are set to slow faltering growth even further. Deteriorating relations with Western states and investors reflect the increasingly embattled status of President Edgar Lungu and his Patriotic Front (PF) government. Impacts China’s presence in Zambia’s mining sector will likely increase in lieu of debt repayments. Lungu’s unpopularity is bringing his candidacy for 2021 into question, but an anti-Lungu PF faction may struggle for traction. The enduring economic malaise continues to threaten PF support in its former strongholds.

Togo’s president will face mounting opposition

2018 ◽  
Keyword(s):  
Fiscal Consolidation ◽  
Political Climate ◽  
Term Limit ◽  
Content Type ◽  
Constitutional Reforms ◽  
The Imf

Subject Togolese constitutional crisis. Significance The main opposition coalition has rejected President Faure Gnassingbe's recent calls for dialogue to end a long-running political impasse over his continued tenure in office. Faure, in power since 2005 and currently in a controversial third term, has reluctantly agreed to constitutional reforms -- including the introduction of a two-round presidential vote and a two-term presidential limit. However, Faure wants the two-term limit to take effect in 2020, potentially giving him the chance to stay in power until 2030, while the opposition insists the limit must apply retrospectively. Impacts Military backing of the incumbent makes the prospect of a coup unlikely. The uncertain political climate and recurring protests could undermine a fiscal consolidation programme with the IMF. The Togolese diaspora will increase global attention on the crisis and pressure on international governments to intervene.

Angolan government will point to early reform progress

2019 ◽  
Keyword(s):  
Interest Rate ◽  
Agricultural Production ◽  
Value Added ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Fuel Distribution ◽  
Oil Sector ◽  
Near Term ◽  
State Relations ◽  
The Imf

Significance The underperformance of the oil sector, coupled with a recent fuel distribution crisis, have combined to dampen growth forecasts for 2019. While President Joao Lourenco’s government has earned praise for recent fiscal consolidation efforts, economic frailties linger. Impacts The Angolan authorities will accelerate efforts to repay arrears to Portuguese companies amid improving state relations. A potential inflationary spike once value added taxation (VAT) is introduced may lessen the chance of an interest rate cut in the near term. Improving agricultural production will be a major diversification priority and agricultural spending has quadrupled in the revised budget. The IMF will maintain pressure on Luanda to reduce subsidies in sectors such as agriculture and fisheries.

Near-term IMF funds are ample, but more may be needed

2020 ◽  
Keyword(s):  
Emerging Markets ◽  
Economic Crisis ◽  
Low Income ◽  
Low Income Countries ◽  
First Responder ◽  
Content Type ◽  
Near Term ◽  
Second Wave ◽  
The Imf

Subject IMF funding dynamics. Significance The disruption caused by the COVID-19 pandemic is putting emerging markets (EMs) and low-income Countries (LICs) under economic and financial stresses. The IMF has long served as the world’s first responder to crises, and some 90 countries have already turned to it, raising fears of whether it has adequate resources to play a systemic role in helping to support these countries. Impacts A second wave of COVID-19 infections and deaths would prolong the economic crisis and could sharply raise demands for IMF resources. The organisation needs a quota increase but the fastest way to raise more resources for EMs is by increasing bilateral borrowing. For low-income countries, additional IMF funding is being mobilised.

Ghana euro-bond setback may force more austerity

2015 ◽  
Keyword(s):  
Interest Rates ◽  
Economic Crisis ◽  
Management Plan ◽  
Debt Management ◽  
Medium Term ◽  
Content Type ◽  
The Government ◽  
Commercial Environment ◽  
The Imf

Subject Ghana's debt strategy. Significance The government on October 2 suspended its fourth euro-bond sale after low investor interest. The planned 1.5-billion-dollar issue was a key pillar in the medium-term debt management plan under the country's IMF programme. However, rising interest rates on dollar-denominated bonds and the lack of confidence in Ghana's economy has proved it to be a risky strategy. Impacts Preferences for political continuity may see the IMF offer the government more leniency on expenditure targets as 2016 elections approach. The opposition New Patriotic Party needs to do more to capitalise on the economic crisis if it hopes to unseat the government. Appetite for Ghana's recovery among donors could see more concessional borrowing if the commercial environment remains difficult.

Beirut will need IMF support, despite political costs

2020 ◽  
Keyword(s):  
Economic Crisis ◽  
Financial Support ◽  
Pragmatic Approach ◽  
Debt Restructuring ◽  
Content Type ◽  
Political Force ◽  
The Past ◽  
Political Costs ◽  
First Time ◽  
The Imf

Significance This followed the government’s decision to default, for the first time ever, on bonds maturing on March 9. There is a mounting controversy over whether to seek financial support from the IMF for a comprehensive debt restructuring programme, especially as COVID-19 further intensifies the economic crisis. Hezbollah, Lebanon’s dominant political force, initially vetoed any such recourse, but may be softening its stance. Impacts One possible source of support could be Qatar, which has shown a pragmatic approach to working alongside Hezbollah in the past. IMF-agreed reforms would likely impose further hardship on an already-suffering population. IMF and donor finance would at least put dollars back in the market, albeit at a higher price, and safeguard imports.

Argentina election win eases tensions not challenges

2019 ◽  
Keyword(s):  
Economic Crisis ◽  
Vice President ◽  
Content Type ◽  
President Elect ◽  
The Imf

Significance The first-round victory may help expedite measures to tackle the economic crisis and in particular to start debt renegotiations with creditors. Fernandez’s transition team of four, one of whom will likely be named economy minister, are closer to him than to his vice-president-elect, former President Cristina Fernandez de Kirchner (CFK). Impacts With its two most important figures defeated, Cambiemos may disintegrate. Fernandez’s stated commitment to reprogramming rather than writing down debt may prove unattainable. Talks with the IMF, and the Fund’s willingness to amend the terms of its stand-by agreement, will be key.

Egypt weathers COVID-19 blow but debt risks loom large

2021 ◽  
Keyword(s):  
Emerging Markets ◽  
Growth Potential ◽  
Structural Reforms ◽  
Fiscal Consolidation ◽  
Medium Term ◽  
Content Type ◽  
Bond Index ◽  
Tourism Sector ◽  
The Imf

Significance The IMF praised Egypt’s “resilience” to the COVID-19 shock and encouraged Cairo to maintain its focus on fiscal consolidation while broadening structural reforms -- mainly to ease investors’ access to key opportunities in the economy -- that will help “unleash Egypt’s enormous growth potential in the medium term”. Impacts Egypt will need to go to the market again in 2021/22 through both conventional bonds and sukuk. The return of Russian tourists could generate USD3.5bn in revenues and is seen as critical to a recovery in the battered tourism sector. Egypt's inclusion in the FTSE Russell frontier index and JP Morgan’s emerging markets bond index could trigger large currency inflows.

IMF deal offers mixed Ghana economic outlook

2015 ◽  
Keyword(s):  
Commodity Price ◽  
Fiscal Deficit ◽  
Structural Constraints ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Social Pressures ◽  
2016 Election ◽  
The Government ◽  
Economic Outlook ◽  
The Imf

Subject Ghana economic outlook. Significance The government has presented a revised 2015 budget that lowers the growth target from 3.9% to 3.5%. The fiscal deficit target has been widened from 6.5% of GDP to 7.3%. The downward revisions underline the economy's structural constraints, which the IMF financial bailout deal will not overcome. Despite a promising start on fiscal consolidation, the economy continues to be plagued by the effects of commodity price dependence. Impacts The recent reduction in fuel and utility subsidies has been made easier given lower oil and product prices. However, social pressures will build around the 2016 election, potentially spurring policy reversals. Negotiations moderating spending in next year's budget will be tougher, especially on wages.

Pandemic takes tough toll on informal women workers

2021 ◽  
Keyword(s):  
Women Workers ◽  
Economic Crisis ◽  
Gender Inequality ◽  
Public Spending ◽  
Fiscal Consolidation ◽  
Employment Opportunities ◽  
Content Type ◽  
Policy Measures ◽  
And Gender

Significance Policy measures taken in response to the economic crisis created by the pandemic have largely been gender-blind, exacerbating the long-standing economic precarity and gender inequality experienced by this group, among whom are many of the world’s poorest women. Impacts Post-pandemic permanent changes in sectors such as retail and hospitality will further narrow employment opportunities for women. The push for fiscal consolidation, by governments and multilateral funders, will hit public spending, on which the poorest are most reliant. Lack of gender-sensitive policymaking during post-pandemic recovery will widen economic and social gaps for informal women workers.

Zambia's new mining tax regime could backfire

2015 ◽  
Keyword(s):  
Underground Mines ◽  
Open Pit ◽  
Election Campaign ◽  
Fiscal Consolidation ◽  
Corporate Tax ◽  
Open Pit Mines ◽  
Content Type ◽  
The Government ◽  
The Imf

Significance The new rules remove corporate tax, but hike mining royalties to 20% for open pit mines (up from 6%), and 8% for underground mines (also up from 6%). Some flexibility in the payments schedule may be permitted. Impacts The collapse of the opposition MMD's support base means business lobby funding and support is likely to shift to Hakainde Hichilema's party. Following his declared support for the PF, Rupiah Banda's moderating influence on party policy may be limited by his outsider status. The IMF will be wary of confirming a fiscal consolidation programme, given the president's short tenure and his populist platform. Lower fiscal revenues from mining may push the government to borrow further to meet its election campaign promises.

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