Latest news with #CommonFramework
TimesLIVE
21 hours ago
- Business
- TimesLIVE
Ethiopia 'formalises debt rework' with official creditors
Ethiopia said on Wednesday it had agreed a memorandum of understanding with its official creditor committee (OCC) that formalises an initial debt restructuring deal reached earlier this year. The debt rework offers relief of more than $3.5bn (R61.29bn), the finance ministry said in a statement. The Horn of Africa nation opted to restructure its external debt under the G20's Common Framework in 2021, before it defaulted on its sole Eurobond in December 2023. It hopes the formal agreement with its official creditors will help it seal deals with other creditors, such as its bondholders, the finance ministry said. Ethiopia has been locked in a standoff with a group of investors in its $1bn (R17.51bn) Eurobond, which matured in 2024. "Ethiopia continues to engage in good faith with all its other participating external creditors and seeks to conclude restructuring agreements on terms compatible with the country's need for debt relief and the comparability of treatment principle," said state finance minister Eyob Tekalign Tolina.
Bloomberg
18-06-2025
- Business
- Bloomberg
Zimbabwe Asks South Africa to Back G-20 Debt Overhaul
Zimbabwe has asked South Africa to help garner support for its debt to be revamped under the Group of 20's Common Framework, a step that could restore its access to international capital markets for the first time in more than 25 years. 'South Africa has been approached by Zimbabwe to consider assisting the country in mobilizing international support for Zimbabwe's planned application for debt treatment under the Common Framework,' South Africa's National Treasury said in an emailed response to Bloomberg questions.
Mint
06-06-2025
- Business
- Mint
IMF warns 2030 sustainable development goals at risk as funding gaps widen
New Delhi: The International Monetary Fund has warned that the world is increasingly unlikely to meet the sustainable development goals (SDGs) by 2030 as financing needs far exceed what many countries can realistically manage—raising the risk of broader macroeconomic imbalances. The warning came after the IMF executive board reviewed a staff paper evaluating the fund's role in supporting international development financing. The review precedes the Fourth Financing for Development Conference (FfD4), scheduled to be held in Sevilla, Spain, from 30 June 30 to 3 July. The IMF paper flags a deteriorating development outlook, reassesses the feasibility of the SDGs, and outlines measures to accelerate progress amid mounting financial and economic pressures. 'A series of shocks since 2020 has compounded longstanding structural challenges, hitting low-income and fragile states the hardest,' the IMF said in a statement on Friday. 'Debt vulnerabilities deserve attention, particularly for low-income countries,' it added. While debt remains broadly sustainable, the IMF noted that many countries face steep interest costs and rising refinancing needs, constraining their ability to invest in critical development spending. 'Against this background, achieving the sustainable development goals by 2030 appears increasingly unlikely,' it said. Adopted in 2015, the SDGs comprise 17 goals and 169 targets designed to eliminate poverty, tackle climate change, reduce inequality, and promote prosperity. But with the deadline fast approaching, global progress is faltering amid growing financing gaps, economic headwinds and geopolitical uncertainty. 'Accelerating development progress will require a major collective effort,' the IMF said, 'including strong domestic reforms, adequate international support, and proactive debt management.' It also called for tailored approaches, warning that rising divergence among developing countries demands more nuanced reform agendas and support frameworks. Meanwhile, IMF directors have stressed the need for a 'major collective effort' combining ambitious domestic reforms with robust international support. This includes advancing sound macroeconomic policies, improving public spending efficiency, strengthening governance, mobilising domestic resources, and boosting private-sector-led growth and job creation. International backing—through well-coordinated capacity development and additional public and private finance—will be critical, the IMF said. The IMF directors have also endorsed efforts to improve debt restructuring mechanisms for countries with unsustainable debt, including deeper relief under the Common Framework and the Global Sovereign Debt Roundtable's new 'restructuring playbook'. They also supported a 'three-pillar approach' to help countries where debt is sustainable but constrains productive spending, the IMF added. The IMF's role, though not developmental by design, remains vital in preserving macroeconomic and financial stability—a prerequisite for sustainable development, it said.
Reuters
23-05-2025
- Business
- Reuters
IMF says board on track to weigh third review of Ethiopia deal in time
NAIROBI, May 23 (Reuters) - The International Monetary Fund expects its board to consider the third review of Ethiopia's $3.4 billion programme within the set out timeline, a spokesperson said, a key step for the country to advance its programme and receive cash from the fund. Staff from the IMF visited the country in mid-April for an assessment, and Ethiopia's government said it expected a staff-level agreement to be announced within days, but that announcement has not yet been issued. "We anticipate that the IMF Executive Board will consider the third review this summer, consistent with original review schedule," IMF Spokesperson Julie Kozack told Reuters. She did not comment on the status of the staff level agreement. The projected approval by the board in June will trigger the release of a 191.70 SDR loan tranche (about $265 million) to the government, to support the East African nation's sprawling macroeconomic reforms programme. The reforms were a prerequisite for the IMF programme, which was secured at the end of last July, allowing Ethiopia to proceed with its external debt restructuring under the G20'S Common Framework initiative. The government has since secured a preliminary agreement with its official creditors and formal talks with bondholders are expected to start in the coming weeks and months.
Business Insider
20-05-2025
- Business
- Business Insider
Ghana and Afreximbank in heated dispute over $768m debt
Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank). Ghana is in conflict with Afreximbank regarding the restructuring of a $768.4 million debt. The Finance Ministry of Ghana seeks equal treatment of Afreximbank's loan with other restructured debts. Afreximbank insists on preferred creditor status to avoid losses during restructuring. Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank), one of its largest commercial creditors, over a $768.4 million debt. The Ghanaian Finance Ministry wants Afreximbank's loan to be treated like other debts it has already restructured, such as bilateral loans from China and $13 billion worth of eurobonds, Bloomberg reported. In restructuring, lenders often agree to extend payment deadlines, reduce interest rates, or take partial losses (called 'haircuts') to help a struggling country recover. But Afreximbank says it should not have to take any losses. The Cairo-based bank says it holds 'preferred creditor status,' a designation usually given to institutions like the International Monetary Fund (IMF) or World Bank. This status means that their loans are repaid in full, ahead of other creditors, and are not subject to restructuring. According to the Minister of Finance, Cassiel Ato Forson, 'Ghana's government doesn't see Afreximbank as having preferred creditor status, we do not believe that their debt is senior to any other restructurable debt. The Afrexim debt is part of our restructurable envelope. ' A dispute with regional implications The disagreement could delay Ghana's debt resolution, which began after it defaulted in December 2022. More importantly, it could set the tone for how regional lenders like Afreximbank are treated in future debt talks, not just in Ghana but in other African countries facing financial distress, such as Zambia, Kenya, and Ethiopia. Zambia, for example, has faced multiple hurdles in trying to restructure its debt under the G20's Common Framework, a global plan launched during the COVID-19 pandemic to help poor countries renegotiate unaffordable debt. Despite its good intentions, the Framework has struggled with implementation and coordination among creditors. Afreximbank, which is owned by African governments and private investors, has also shown it's willing to enforce its claims through legal means. On May 8, it won a court case against South Sudan, forcing the country to repay $657 million in defaulted loans, plus 13.5% post-judgment interest. The move sent a strong message that the bank will pursue repayment, even from fellow African states.
