Latest news with #G20CommonFramework
Arabian Post
10-06-2025
- Business
- Arabian Post
Ethiopia Targets 8.9 % Growth as Budget Widens
Ethiopia's finance minister has announced that the economy is projected to expand by 8.9 % in the fiscal year beginning 8 July 2025, alongside a modest increase in the budget deficit amid structural reforms. Finance Minister Ahmed Shide addressed parliament on Tuesday, outlining the forecast for the next fiscal year, citing an acceleration in real GDP growth from an estimated 8.4 % this year to 8.9 % next year. The state budget deficit is expected to rise slightly to 2.2 % of GDP, compared to 2.1 % in the current year. Total government expenditure is projected at 1.9 trillion birr, equivalent to around US $14 billion. This positive outlook is deeply anchored in ongoing reforms backed by an International Monetary Fund programme. These include the liberalisation of the exchange rate, debt restructuring negotiations, and the establishment of the Ethiopian Securities Exchange, which opened in January after a 50‑year absence. ADVERTISEMENT The cabinet's approval of the new budget earlier this month signalled a strategic reallocation of resources, with spending set to increase by 31 % compared to the previous year's 971 billion birr. A significant portion is earmarked for national security, productivity enhancement, and disaster relief, including continued subsidies for fuel, fertiliser, oil and medicines—a move aimed at dampening inflationary pressure on households. Reforms and their impacts The IMF programme that began in July 2024 has been a linchpin in the reform agenda. In April, State Finance Minister Eyob Tekalign reported that the third review of the four‑year US $3.4 billion loan arrangement had reached staff‑level agreement, with approval by the IMF executive board anticipated this month. Subsequent draws will hinge on continued reform progress, notably debt restructuring. Debt, inflation and exchange rate liberalisation remain pressing concerns. A draft budget revealed that 463 billion birr—nearly 39 % of recurrent expenditure—will go towards debt servicing, surpassing planned capital outlays. The government intends to restructure approximately US $3.5 billion in external liabilities through agreements in upcoming weeks. Bondholder writedowns are expected as part of a broader debt resolution strategy. Monetary reforms have lessened inflation, which reached 29.2 % in 2022/23, and narrowed the spread between official and parallel exchange rates. Foreign reserves have rebounded, tripling to US $3.6 billion, easing foreign exchange shortages. These financial indicators have been central in IMF assessments. Policy makers are awaiting formal debt restructuring talks this summer with official and private creditors alike, guided by the G20 Common Framework. Iran‑timed agreements with Chinese policy banks, the U.S. International Development Finance Corporation and other funders are being explored to support infrastructure and development needs. Regional comparisons and strategic outlook Ethiopia remains one of sub‑Saharan Africa's highest growth economies, although still below the pre‑covid annual average of around 10 %. The country's trajectory continues to be shaped by recovery from the Tigray war, covid‑19 disruptions, droughts and locust invasions, but ongoing reforms are expected to unlock further expansion. The imminent fiscal year budget, combining a steep rise in expenditure with a stabilising deficit, underscores a cautious but ambitious strategy: focusing on debt management, reform momentum and public service delivery, rather than unfettered spending. Key stakeholders, including opposition figures such as Desalegn Chane of the National Movement of Amhara, have voiced concern over rising tax burdens amid steady living costs and a depreciating birr. Criticism has targeted new levies on motor vehicles and excise taxes, with claims these conflict with subsidy policies. The finance minister, however, defended these as necessary for fiscal resilience and revenue expansion. Broader reform dynamics have been influenced by Prime Minister Abiy Ahmed's economic agenda, including the launch of Ethiopia's first stock market since the Haile Selassie era, currency liberalisation, and opening the banking sector to foreign investment. These steps have been deemed essential to securing up to US $27 billion in external funding from IMF, World Bank, UAE, China and others over the next four years. Looking ahead The projection of roughly 8.9 % GDP growth signals confidence that reforms are gaining traction, even as the government prepares to finance a wider budget and service rising debt. The success of the IMF programme's next review, debt restructuring outcomes, and reform implementation will determine whether Ethiopia can sustain its economic momentum and weather domestic and global headwinds.
The Star
07-05-2025
- Business
- The Star
Zambia signs agreement with Indian bank on debt restructuring
LUSAKA, May 7 (Xinhua) -- Zambia on Wednesday signed a bilateral agreement with the Export-Import Bank of India (Exim Bank) for the restructuring of its debt. The agreement covers about 320 million U.S. dollars of central government debt and an additional 15 million dollars owed by Zesco Limited, the state-owned power utility. Minister of Finance and National Planning Situmbeko Musokotwane said the signing marks a milestone in Zambia's ongoing debt restructuring efforts under the G20 Common Framework, which aims to restore debt sustainability and create fiscal space for national development. He said that the debt has been restructured on favorable terms, as outlined in the memorandum of understanding under the G20 Common Framework. "This agreement not only reaffirms our strong bilateral ties but also demonstrates our shared commitment to ensuring a sustainable financial future for Zambia," Musokotwane said during the signing ceremony. He commended the Exim Bank for its continued support throughout the process, saying that the agreement reflects Zambia's success in engaging its creditors in a transparent and collaborative manner. The signing is a vote of confidence in Zambia's economic reforms, Musokotwane said, adding that the agreed terms are designed to support the country's economic recovery, ease debt servicing pressures, and allow the government to redirect resources to priority sectors.
Business Times
24-04-2025
- Business
- Business Times
Global roundtable sees rising debt risks for low-income countries as uncertainty mounts
[WASHINGTON] More work is needed to improve the sovereign debt restructuring process and help countries facing mounting debt service challenges, the chairs of a global debt roundtable said on Wednesday (Apr 23), as they released a new playbook to aid those efforts. The Global Sovereign Debt Roundtable, formally launched in late 2022 to help accelerate progress on securing debt treatment for countries in default, met on Wednesday during the spring meetings of the International Monetary Fund (IMF) and the World Bank. Co-chaired by the IMF, the World Bank and South Africa, the current chair of the Group of 20 major economies, it includes creditors, borrowing countries, private sector executives, debt experts, and financial and legal advisers. Co-chairs on Wednesday cited some progress on aspects for the debt restructuring process, including the clarification that debtor countries undergoing a restructuring but not in arrears to official bilateral creditors can request a suspension of their debt service payments. Debtor countries had pressed for assurance that such debt relief could be made available. Ceyla Pazarbasioglu, the IMF's strategy chief, said debt stability risks in emerging markets and developing economies were broadly contained, but the uncertainty around that baseline had increased 'very substantially' given rising trade tensions. 'There are lots of headwinds, a lot of policy uncertainty,' she told reporters, citing challenges for countries with high exports and exposure to US tariffs, declining commodity prices, tightening financial conditions and declining growth. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Pazarbasioglu said there was an urgent need to address the high debt service burden facing many countries, a situation that she said was getting more acute in the current environment. The IMF on Wednesday announced that economic pressures from steep new US tariffs will push global public debt above pandemic-era levels to nearly 100 per cent of global GDP by the end of the decade as slower growth and trade strain government budgets. The IMF's latest Fiscal Monitor projected that global public debt will grow 2.8 percentage points to 95.1 per cent of global GDP in 2025, reaching 99.6 per cent of global GDP by 2030. More work needed to restructure debt Public debt levels in low-income countries and emerging markets were already high before the Covid-19 pandemic and then rose, but they have stabilised since and look set to decline slightly or remain stable over the medium term. A few countries remained particularly vulnerable and many countries face elevated debt service challenges, with high-interest costs and refinancing needs crowding out spending on education, health and infrastructure investment. Citing ongoing challenges, the co-chairs called for further work to improve restructuring processes, including the G20 Common Framework; efforts to help countries whose debt is sustainable but are faced with elevated debt service challenges; and work to prevent a future unsustainable build-up of debt. This would require 'advancing robust progress on debt transparency, debt management, and debtor/investor relations', the co-chairs wrote in their progress report. They said the new playbook released on Wednesday was a 'user-friendly document' that summarised the key steps, concepts and processes observed in recent sovereign debt restructurings. Pazarbasioglu said the playbook was intended to be 'a living document' that could be updated continually. It sets out a path that would see restructurings completed in a period of one year. The playbook is non-binding, and recognises that each case may have its own specificities and complexities, she added. Discussions among the global debt roundtable underlined the need for enhanced transparency and information sharing regarding restructuring agreements reached by official creditor committees. Participants also discussed the bottlenecks that can delay post-restructuring credit rating upgrades. Pazarbasioglu said the roundtable had made some progress on the issue of non-bonded commercial debt and would continue looking at that closely, along with efforts to accelerate timelines, improve transparency and data-sharing. REUTERS
Yahoo
23-04-2025
- Business
- Yahoo
Global roundtable sees rising debt risks for low-income countries as uncertainty mounts
By Andrea Shalal WASHINGTON (Reuters) -More work is needed to improve the sovereign debt restructuring process and help countries facing mounting debt service challenges, the chairs of a global debt roundtable said on Wednesday, as they released a new playbook to aid those efforts. The Global Sovereign Debt Roundtable, formally launched in late 2022 to help accelerate progress on securing debt treatment for countries in default, met Wednesday during the spring meetings of the International Monetary Fund and the World Bank. Co-chaired by the IMF, the World Bank and South Africa, current chair of the Group of 20 major economies, it includes creditors, borrowing countries, private sector executives, debt experts, and financial and legal advisers. Co-chairs on Wednesday cited some progress on aspects for the debt restructuring process, including the clarification that debtor countries undergoing a restructuring but not in arrears to official bilateral creditors can request a suspension of their debt service payments. Debtor countries had pressed for assurance that such debt relief could be made available. The IMF on Wednesday announced that economic pressures from steep new U.S. tariffs will push global public debt above pandemic-era levels to nearly 100% of global GDP by the end of the decade as slower growth and trade strain government budgets. The IMF's latest Fiscal Monitor projected that global public debt will grow 2.8 percentage points to 95.1% of global GDP in 2025, reaching 99.6% of global GDP by 2030. Public debt levels in low-income countries and emerging markets were already high before the COVID-19 pandemic and then rose, but have they stabilized since and look set to decline slightly or remain stable over the medium term. A few countries remained particularly vulnerable and many countries face elevated debt service challenges, with high interest costs and refinancing needs crowding out spending on education, health and infrastructure investment. Citing ongoing challenges, the co-chairs called for further work to improve restructuring processes, including the G20 Common Framework; efforts to help countries whose debt is sustainable but are faced with elevated debt service challenges; and work to prevent a future unsustainable build-up of debt. This would require "advancing robust progress on debt transparency, debt management, and debtor/investor relations," the co-chairs wrote in their progress report. They said the new playbook released Wednesday was a "user-friendly document" that summarized the key steps, concepts and processes observed in recent sovereign debt restructurings. It is a non-binding document that recognizes that each case may have its own specificities and complexities. Discussions among the global debt roundtable underlined the need for enhanced transparency and information sharing regarding restructuring agreements reached by official creditor committees. Participants also discussed the bottlenecks that can delay post-restructuring credit rating upgrades. Sign in to access your portfolio
Reuters
23-04-2025
- Business
- Reuters
Global roundtable sees rising debt risks for low-income countries as uncertainty mounts
WASHINGTON, April 23 (Reuters) - More work is needed to improve the sovereign debt restructuring process and help countries facing mounting debt service challenges, the chairs of a global debt roundtable said on Wednesday, as they released a new playbook to aid those efforts. The Global Sovereign Debt Roundtable, formally launched in late 2022 to help accelerate progress on securing debt treatment for countries in default, met Wednesday during the spring meetings of the International Monetary Fund and the World Bank. Co-chaired by the IMF, the World Bank and South Africa, current chair of the Group of 20 major economies, it includes creditors, borrowing countries, private sector executives, debt experts, and financial and legal advisers. Co-chairs on Wednesday cited some progress on aspects for the debt restructuring process, including the clarification that debtor countries undergoing a restructuring but not in arrears to official bilateral creditors can request a suspension of their debt service payments. Debtor countries had pressed for assurance that such debt relief could be made available. The IMF on Wednesday announced that economic pressures from steep new U.S. tariffs will push global public debt above pandemic-era levels to nearly 100% of global GDP by the end of the decade as slower growth and trade strain government budgets. The IMF's latest Fiscal Monitor projected that global public debt will grow 2.8 percentage points to 95.1% of global GDP in 2025, reaching 99.6% of global GDP by 2030. Public debt levels in low-income countries and emerging markets were already high before the COVID-19 pandemic and then rose, but have they stabilized since and look set to decline slightly or remain stable over the medium term. A few countries remained particularly vulnerable and many countries face elevated debt service challenges, with high interest costs and refinancing needs crowding out spending on education, health and infrastructure investment. Citing ongoing challenges, the co-chairs called for further work to improve restructuring processes, including the G20 Common Framework; efforts to help countries whose debt is sustainable but are faced with elevated debt service challenges; and work to prevent a future unsustainable build-up of debt. This would require "advancing robust progress on debt transparency, debt management, and debtor/investor relations," the co-chairs wrote in their progress report. They said the new playbook released Wednesday was a "user-friendly document" that summarized the key steps, concepts and processes observed in recent sovereign debt restructurings. It is a non-binding document that recognizes that each case may have its own specificities and complexities. Discussions among the global debt roundtable underlined the need for enhanced transparency and information sharing regarding restructuring agreements reached by official creditor committees. Participants also discussed the bottlenecks that can delay post-restructuring credit rating upgrades.
