Tuesday, September 26, 2023
  • Login
The Southern African Times
  • Home
  • Southern Africa
  • Business
    • African Start ups
    • African Continental Free Trade Area
  • Technology
    • Lifestyle
      • Health
      • Culture
      • Food and Drink
      • Entertainment
  • Opinion
  • Sports
  • SAT Jobs
    • Events
  • Shop
  • About Us
    • Advertise with Us
    • Contact Us
No Result
View All Result
  • Home
  • Southern Africa
  • Business
    • African Start ups
    • African Continental Free Trade Area
  • Technology
    • Lifestyle
      • Health
      • Culture
      • Food and Drink
      • Entertainment
  • Opinion
  • Sports
  • SAT Jobs
    • Events
  • Shop
  • About Us
    • Advertise with Us
    • Contact Us
No Result
View All Result
The Southern African Times
No Result
View All Result
Home Finance

Africa needs bilateral support to cope with major funding squeeze, IMF says

by SAT Reporter
April 17, 2023
in Finance
0
Africa needs bilateral support  to cope with major funding squeeze, IMF says
0
VIEWS

Africa is facing a severe financing squeeze that, on the back of a series of unprecedented shocks, is disrupting economic growth and endangering its long-term development, the International Monetary Fund’s (IMF) top official for the region said.

Sub-Saharan Africa was only beginning to recover from the COVID-19 pandemic’s economic fallout when Russia’s invasion of Ukraine roiled capital and commodity markets, drove up inflation and paved the way for higher interest rates around the world.

Abebe Selassie, director of the IMF’s African Department, said in an interview with Reuters that any one of those shocks would have been historic on their own.

“And they’ve been layered in a region, which has limited resilience … So, yeah, it is very problematic,” he said.

The Fund published its Regional Economic Outlook for Sub-Saharan Africa on Friday during the IMF and World Bank spring meetings in Washington.

In the report, it forecast that regional growth will slow for the second year in a row to 3.6% this year from 3.9% in 2022, before rebounding to 4.2% next year.

A tightening of global monetary policy to rein in inflation has led to higher interest rates, raising Africa’s borrowing costs on both domestic and international markets.

Sovereign debt spreads for the region have climbed to three times the emerging market average, leaving Africa’s frontier market countries cut off from international capital markets since early 2022.

Two countries – Zambia and Ghana – have already defaulted on their sovereign debt since the start of the pandemic. A Group of 20-backed initiative aimed at assisting with debt restructuring is plagued by delays and has so far failed to provide relief.

The U.S. dollar’s effective exchange rate, meanwhile, reached a 20-year high last year, driving up the cost of servicing existing dollar-denominated debt, the IMF report said.

This occurred amid a drop in Chinese bilateral funding – a key source of critical infrastructure financing – and a long-term decline in traditional development finance.

“All of the key sources of financing of deficits – both the current account and the fiscal deficit – really are now very curtailed,” Selassie said.

URGENT HELP NEEDED

Selassie said the IMF and World Bank would seek to step up to fill the gap, but they will need help.

“Honestly, this is also a time when other bilateral creditors need to come forward,” he said.

Failure to act could hamper African governments’ ability to address an ongoing cost-of-living crisis and potentially force them to reduce resources for health, education and infrastructure.

Longer term, Africa is faced with a gaping shortfall in funding for climate adaptation.

While wealthy countries are beginning to mobilise resources, Selassie said Africa, which has done little to cause climate change but is disproportionately impacted by it, must not be hobbled by more onerous debt.

“For the poorest countries, the most fragile countries, it is really, really important that we lower the weighted average cost of financing they face big time,” he said.

“What has transpired over the last 15 to 20 years clearly has not been ideal.”

Previous Post

World Bank Official Emphasises the Need to Balance Climate and Development Agendas in Africa

Next Post

East African Leaders Call for Immediate End to Sudan Conflict as Clashes Escalate

SAT Reporter

Related Posts

ECOWAS Officials Emphasise Collaborative Efforts to Launch Common Currency
Finance

ECOWAS Officials Emphasise Collaborative Efforts to Launch Common Currency

by SAT Reporter
September 12, 2023
Zimbabwe’s Finance Minister Mthuli Ncube Retained in New Cabinet
Finance

Zimbabwe’s Finance Minister Mthuli Ncube Retained in New Cabinet

by SAT Reporter
September 12, 2023
African Sovereigns Grapple with High Borrowing Costs Amid Attractive US Rates
Finance

African Sovereigns Grapple with High Borrowing Costs Amid Attractive US Rates

by SAT Reporter
September 10, 2023
Asian Infrastructure Investment Bank (AIIB) Set to Boost Egypt’s Infrastructure Investments
Finance

Asian Infrastructure Investment Bank (AIIB) Set to Boost Egypt’s Infrastructure Investments

by SAT Reporter
September 10, 2023
IFC Grants $107 Million Loan for Sunda Group’s African Expansion
Finance

IFC Grants $107 Million Loan for Sunda Group’s African Expansion

by SAT Reporter
September 8, 2023
Next Post
East African Leaders Call for Immediate End to Sudan Conflict as Clashes Escalate

East African Leaders Call for Immediate End to Sudan Conflict as Clashes Escalate

Browse by Category

  • African Continental Free Trade Area
  • African Debt
  • African Start ups
  • Algeria
  • All News
  • Analysis
  • Angola
  • Asia
  • Botswana
  • BOTSWANA
  • BRICS
  • Burkina Faso
  • Burundi
  • Business
  • Business
  • Cameroon
  • Central Africa
  • China
  • Climate Change
  • Climate Changev
  • Congo Republic
  • COVID 19
  • CRYPTOCURRENCY
  • Culture
  • Democratic Republic of Congo
  • Eastern Africa
  • Economy
  • Education
  • Egypt
  • Energy
  • Entertainment
  • Environment
  • Ethiopia
  • Europe
  • Fashion
  • Feature
  • Finance
  • Food
  • Food and Drink
  • Foods
  • GABON
  • Ghana
  • Global
  • Guinea
  • Health
  • Immigration
  • in Southern Africa
  • International news
  • Just In
  • Kenya
  • Lesotho
  • Libya
  • Life Style
  • Lifestyle
  • Malawi
  • Malawi
  • Mali
  • Markets
  • Middle East
  • Mozambique
  • Namibia
  • Niger
  • niger
  • Nigeria
  • North Africa
  • North-Eastern Africa
  • Opinion
  • Politics
  • Property
  • Racism
  • Rwanda
  • SAT Jobs
  • Senegal
  • Seychelles
  • South Africa
  • South Sudan
  • Sports
  • Startup Africa
  • STOCK EXCHANGE
  • Sudan
  • Sustainablity
  • Tanzania
  • Technology
  • Telecommunications
  • The Power Of She
  • Togo
  • Travel
  • Travel
  • Tunisia
  • Uganda
  • Uncategorized
  • West Africa
  • World
  • World
  • ZAMBIA
  • Zambia
  • ZIMBABWE
  • Zimbabwe

Browse by Tags

africa African business news Africa News african footballer African investments african markets African news African start-up Agriculture banking Business China Classic Climate change Content currency economy Explore Bali Finance football Investment Kenya Life Style Markets Market Stories Nigeria oil and gas Opinion Pandemic Politics Premium Russia South Africa Southern African News sports Stay Home technology Travel United Kingdom United Stated Vaccine Work From Home Wuhan Zambia Zimbabwe

WHO WE ARE

The Southern African Times is a regional bloc digital newspaper that covers Southern African and world news. The paper also gives a nuanced analysis on news and covers a wide range of reporting which include sports, entertainment, foreign affairs, arts and culture.
  • Home
  • Southern Africa
  • Business
    • African Start ups
    • African Continental Free Trade Area
  • Technology
    • Lifestyle
      • Health
      • Culture
      • Food and Drink
      • Entertainment
  • Opinion
  • Sports
  • SAT Jobs
    • Events
  • Shop
  • About Us
    • Advertise with Us
    • Contact Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist