IMF

Abuja, March 14, 2024: The selection process for a new Managing Director for the International Monetary Fund (IMF) has begun,  its Board Coordinators have said.

The Board Coordinators of the Executive Board of the IMF, Mr Afonso Bevilaqua and Mr Abdullah BinZarah, made the disclosure in a statement on Thursday in Abuja.

“We are very pleased to announce that the Executive Board has adopted an open, merit-based, and transparent process for the selection of the next Managing Director, similar to the one used in recent rounds.

“The executive board underscores the importance it places on the successful candidate having the requisite global standing to lead the fund, which stands at the centre of the global financial system.

“Individuals may be nominated by a fund Governor or Executive Director and as with past practice, we aim to reach a decision by consensus.

“The board intends to complete the process by the end of April 2024.”

The board coordinators said the board approved the decision as outlined below:

“The successful candidate for the position of managing director will have a distinguished record in economic policymaking at senior levels.

“He or she will have an outstanding professional background, will have demonstrated the managerial and diplomatic skills needed to lead a global institution, and will be a national of any of the fund’s members.

“As Chief of the fund’s staff and as Chair of the Executive Board, (s)he will be capable of providing strategic vision for the work of a high-quality, diverse, and dedicated staff.

“S(he) will be firmly committed to advancing the goals of the fund by building consensus on key policy and institutional issues, including through close collaboration with the executive board, under whose direction (s)he will fulfil his or her responsibilities.

“(S)he will have a proven understanding of the fund and the policy challenges facing the fund’s diverse global membership.”

According to the statement, S)he will have a firm commitment to, and an appreciation of, multilateral cooperation and will have a demonstrated capacity to be objective and impartial. (S)he will also be an effective communicator.

The statement said: “An individual may be nominated for the position of managing director by a fund governor or an executive director during a nomination period.

“This nomination period shall commence on March 14, 2024, at 12:01 a.m. Washington, D.C. time and will close on April 3, 2024, at 11:59 p.m. Washington, D.C. time.

“All nominations shall be communicated to the fund secretary, who shall obtain confirmation from each nominee of his or her willingness to be considered as a candidate.

“The fund secretary shall hold the names of the nominees in confidence until the end of the nomination period.”

It noted that:”At the end of the nomination period, the secretary shall disclose to the executive board the names of those nominees who have confirmed their desire to be candidates.

“If the number of candidates exceeds three, the executive board will keep the names of these nominees in confidence until it has drawn up a shortlist of three candidates, taking into account the above candidate profile without geographical preferences.

“The shortlisting process will be implemented through indications of which candidates receive the most support among directors, taking into account the fund’s weighted voting system.

“This is with the objective of completing the shortlisting process within seven days following the disclosure to the board of the candidates.

“Although the executive board may adopt a shortlist by a majority of the votes cast, the objective of the executive board is to adopt a shortlist by consensus. The shortlist shall be published by the fund.”

The statement adds: “The executive board will meet with the shortlisted candidates (or all of the candidates if there were fewer than four) in Washington, D.C.

“Thereafter, the executive board will meet to discuss the strengths of the candidates and make a selection.

“Although the executive board may select a managing director by a majority of the votes cast, the objective of the board is to select the managing director by consensus to complete the selection process by the end of April 2024 ,” it said.

The International Monetary Fund (IMF) has estimated the taxpayers exposure to the fuel import scheme at around $400 million, which means the government-to-government (G-to-G) deal is not risk-free as touted.

The IMF estimates the state’s contingent liabilities stemming from the letters of support issued to participants in the supply chain at 0.4 percent of GDP, said the IMF in the latest country report under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) Arrangements.

A contingent liability is a potential loss that may occur in the future depending on the outcome of a specific event.

In the case of the G2G mechanism launched in April 2023, the IMF says taxpayers are exposed to calls on the national budget in case prices at the pump are not adjusted to fully pass through any forex losses to the final consumers.

To hedge against foreign exchange losses, Kenya opened an interest-bearing escrow account into which the proceeds from the sale of fuel under this deal are packed. The interest on the funds is the 91-day Treasury Bill rate minus 200 basis points (two percentage points). The interest is paid to a government led stabilization account to mitigate forex losses.

The IMF staff and the Attorney-General of Kenya reviewed the legal arrangements of the fuel import scheme establishing that they do not give rise to government guarantees of private debt under domestic law as defined in the Technical Memorandum of Understanding under the IMF-supported EFF/ECF arrangements.

“The government is, nevertheless, exposed to calls on the national budget in case prices at the pump are not adjusted to fully pass through any FX valuation losses under the mechanism to final consumers,” said the IMF. “It may further have to raise U.S. dollar financing to cover any shortfalls of FX, needed to repay exporters, in the domestic market.”

The Kenyan government has indicated its intention to pull out of the scheme in December and leave it to the private players.

The scheme, which had an initial duration of nine months and extended for another 12 months to end-2024, includes the issuance of letters of support by the government to domestic oil marketing companies (OMCs) that also benefit the banks, financial institutions, credit insurance providers, lenders and any hedging counterparties providing financing, insurance, refinancing or hedging to the OMCs.

The fuel is imported on six-month credit, backed by commercial letters of credit issued by domestic banks and confirmed by international banks.

Banks have been cagey on continuing to issue letters of credit without the letters of support from the government.

Treasury Cabinet Secretary Njuguna Ndung’u in an earlier interview said that the government would step back to allow private sector players, including OMCs, banks, and credit insurance providers, to run the scheme.

Prof Ndung’u, however, insisted that the scheme was a trade finance arrangement which had no risks to the Kenyan government.

The scheme, which was midwifed on March 10, 2023, by the Kenyan government in partnership with governments of the United Arab Emirates and Saudi Arabia, was touted as a means of easing forex pressures by eliminating the buying of fuel, the country’s single-largest import commodity, in the spot market by postponing the demand for dollars estimated at $500 million monthly.

However, in a letter to the IMF, Professor Ndung’u and the Central Bank of Kenya (CBK) Governor Dr Kamau Thugge indicated that the deal has not achieved its objective.

Read more The EastAfrican

London/Accra, Jan. 16, 2024: The International Monetary Fund (IMF) executive board is due to meet on Friday to approve a 600-million-dollar rescue loan payout to Ghana.

Three sources told Reuters that this came after the country reached a deal to restructure 5.4 billion dollars of official creditor debt.

The board date is expected to be published in the IMF’s public calendar on Tuesday, one of the sources said. All the sources requested anonymity to speak on sensitive matters.

Ghana struck a deal with its bilateral lenders, including China and France, earlier a key step to unlocking the second tranche of IMF funding under a three billion dollar bailout.

Ghana’s finance ministry and the IMF did not immediately reply to a request for comment.

IMF Managing Director Kristalina Georgieva welcomed the debt deal agreement, saying it clears the path for the executive board’s first review of Ghana’s programme.

A sign-off by the board is usually seen as a formality once a date has been agreed.

The West African country defaulted on most external debt in December 2022 after servicing costs soared.

It also needs to reach a relief deal with private holders of about 13 billion dollars in international bonds.

The bonds rose almost 1 cent on the dollar on Monday, with the 2042 maturity up the most, climbing 0.82 cents to 43.09 cents, its highest level since early November.

“Recently, China encouraged all parties to overcome technical difficulties and narrow differences, and finally led all parties to reach a basic consensus on Ghana’s debt settlement plan on Jan. 8,’’ Chinese Foreign Ministry spokesperson Mao Ning said on Monday.

Some members of the Official Creditor Committee, which is co-chaired by China and France, are still “going through their internal procedures,” she told reporters at a regular news briefing.

Ghana is aiming to restructure 20 billion dollars of external debt, which totalled about 30 billion dollars at the end of 2022, under the Common Framework, a debt restructuring process set up by the G20 countries during the COVID-19 pandemic.

It has targeted cutting 10.5 billion dollars from payments due from 2023-2026.

The IMF second tranche payout, once signed off, should also trigger 550 million dollars in additional World Bank funding, Ghana’s finance ministry said.

Johannesburg, Jan. 9, 2024: The International Monetary Fund’s executive board has completed the third review of Mozambique’s three-year loan programme for an immediate disbursement of $60.7 million to Maputo.

The review brings total disbursements under the $456 million Extended Credit Facility programme approved in 2022 to about $273 million, IMF said.

“Programme performance has been satisfactory,” IMF said

It added that inflationary pressures had declined sharply and the economic recovery is accelerating.

The three-year arrangement is expected to support economic recovery and policies to reduce public debt and financing vulnerabilities.

It will also create space for public investments in human capital, climate adaptation and infrastructure.

Nairobi, Nov. 5, 2023: 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 READ MORE

The EastAfrican

Marrakech, Oct. 15, 2023: The International Monetary Fund (IMF) says it is playing an active role in mediating on the debt debacle facing some countries.

The Managing Director of IMF, Kristalina Georgieva, said this on Friday in Marrakech, during the 2023 Annual Meetings Plenary.

According to Georgieva, more than half of low-income countries remain in, or are at high risk debt distress.

She said that about a fifth of emerging economies faced “default-like spreads”.

“The common framework is starting to deliver on debt restructurings, albeit slowly.

“And the more recent Global Sovereign Debt Roundtable established by the Indian G20 presidency, the IMF and the World Bank, is bringing all relevant creditors and debtors together with promising signs, ” she said.

The IMF managing director said that the fund was also committed to finding a lifeline for many countries in their time of need, through a “global financial safety net”.

“Since the onset of the pandemic, we have provided about one trillion dollars in liquidity and financing.

“This came via 650 billion dollars Special Drawing Rights (SDRs) and 320 billion dollars in lending to 96 countries, including 56 low-income nations,” she said.

She said that the IMF activated a programme of direct debt relief to its poorest members and also mobilised emergency financing during the COVID-19 pandemic.

She added that the IMF also inaugurated its newest instrument, the Resilience and Sustainability Trust (RST).

“For the first time in history, the RST provides long-term affordable resources to vulnerable low, and middle-income countries.

“One year after it was operationalised, we have 11 countries benefitting from RST support to help them adapt and build resilience, especially to climate change,” Georgieva said.

Marrakech (Morocco), Oct. 13, 2023: The International Monetary Fund (IMF) says it is collaborating with the World Bank to increase capacity to support low-income countries.

IMF’s Managing Director, Kristalina Georgieva, said this on Thursday in Marrakech, at the ongoing 2023 World Bank/IMF Annual Meetings.

Georgieva said that the support was under the aegis of the Poverty Reduction and Growth Trust (PRGT), which provides zero-interest rate loans to low-income countries.

She said that 40 countries were helping the Bretton Woods institutions realise their target for the PRGT.

“I can tell you it warmed my heart when we met with contributors to see how much more expanded the family of PRGT contributors are.

“Big countries, small countries, rich countries, poorer countries coming together for the benefit of the most vulnerable in our global family,” she said.

The IMF managing director said that the fund would also secure the full amount of $40billion already pledged by donors to its new Resilience and Sustainability Trust (RST).

She said that the RST offered financing to help vulnerable low and middle-income countries cope with the existential threat of climate change.

“There are some encouraging signs that we will exceed $40billion,” she said.

She said that the world was presently experiencing severe shocks that were now becoming the new normal for “a world that is weakened by weak growth and economic fragmentation. ”

She, however, said that while countries like the USA had displayed the capacity to recover fast, some other countries still battled with economic challenges occasioned by COVID-19 and the Russian invasion of Ukraine.

“We expect growth to remain low over the medium term , and we are faced with divergence in economic fortunes.

“Successive shocks since 2020 have pushed global output down by 3.6 trillion dollars as of this year. This loss is unevenly distributed.

“The U.S. has already recovered to pre-pandemic levels, most of the rest of the world did not.

“Low-income countries have been hardest hit because they have had extremely limited buffers, so it was hardest for them to protect their economy; to protect their people,” she said.